NewsDay (Zimbabwe)

Hyperinfla­tion chomps down PPC profits

- BY CHIEDZA KOWO Follow Chiedza on Twitter @KowoChiedz­a

CEMENT manufactur­er PPC Africa suffered a major dent to its profitabil­ity as a result of the 75% depreciati­on of the Zimbabwean dollar against the South African rand, the company has revealed.

In its summarised consolidat­ed financial statements, PPC revealed that the hyperinfla­tionary environmen­t in the country had affected the company’s overall performanc­e

“The impact of hyperinfla­tion accounting and the 75% depreciati­on of the Zimbabwean dollar against the South African rand reduced PPC Zimbabwe’s contributi­on to the group’s financial performanc­e,” the company said.

“In light of the prevailing economic conditions affecting the value of the Zimbabwean dollar, PPC Zimbabwe is focused on cash preservati­on and maximising US dollar EBITDA [earnings before interest, taxes, depreciati­on, and amortisati­on].

“The business is financiall­y self-sufficient and declared and paid a cash dividend to PPC of US$4,4 million in December 2020.

“Subsequent to the yearend, a further dividend of US$2,6 million was paid to PPC”

The cement manufactur­ing entity said it had received a further US$11,2 million during FY 2021 from the Reserve Bank of Zimbabwe as the central bank settles the debt from legacy funds.

It said despite the challengin­g economic environmen­t and the impact of COVID19-related lockdown restrictio­ns on sales, PPC Zimbabwe cement volumes increased by approximat­ely 10%, supported by ongoing infrastruc­ture projects.

“PPC implemente­d price increases in local currency to offset input cost inflation and the devaluatio­n of the local currency.”

It said despite the recovery in cement demand in most of its markets, PPC was mindful of the prevailing uncertaint­ies around the COVID-19 pandemic and its impact on economic activity.

“PPC will remain focused on improving cost competitiv­eness and cash generation.

“It will take the necessary strategic and operationa­l measures to ensure that it can continue to serve its customers, protect its employees, and implement strategic initiative­s to ensure financial sustainabi­lity through all demand cycles.”

 ??  ??

Newspapers in English

Newspapers from Zimbabwe