SEPCEM REVENUE DOWN

SEPHAKU Cement (SepCem) and its concrete mixer subsidiary Metier in 2018 saw a between 5 and 10 percent decline in sales following a depressed macro-economic environment and intense competition between the cement manufacturers, blenders and importers. SepCem’s revenue decreased by

3.1 percent to R2.29 billion compared with R2.37bn in 2017 due to the volume decline. The earnings before interest, tax, depreciation and ammortisation margin was 20.1 percent at R461 million compared to 21.3 percent, or R504m, for the previous period. “The profit margins were further impacted by above inflation cost increases in inputs such as coal, electricity and fuel. Furthermore, due to the low quality of coal available to the local market, the associate had a higher than planned maintenance cost, which contributed to the lower than targeted margins,” the group said. Sephaku, which got a R87m tax credit award for energy efficiency savings in the 2017 tax period, and Métier’s additional plants support sales volume boosted net profit to R128.7m. The group said lack of clarity on key policies, decreasing consumer discretionary income and demand for houses seem to have postponed private investment in infrastructure. “In addition, the May national elections will potentially limit any momentum on current and planned infrastructure spend. Therefore, the outlook for the construction industry is negative with stagnant growth in the private sector and limited public building contracts,” it said. |