PPC Zimbabwe stands out with strong performance across the group

SAMANTHA MADE

Cement maker, Pretoria Portland Cement (PPC) Zimbabwe has stood out as the group’s strongest performer, delivering a 22% surge in sales volumes for the four months to July 2025, underpinned by strong consumer demand and a protective tariff on imports.

The company’s local operations also drove robust cash generation and record dividend payouts, cementing Zimbabwe’s place at the centre of the company’s regional turnaround.

“The positive impact of improved operational efficiency and the right commercial focus, in line with the ‘Awaken the Giant’ strategy, will enable PPC to continue competing effectively in the market while delivering returns to shareholders. Efforts will remain concentrated on leveraging PPC’s quality assets and footprint, as well as continuing to increase margins,” the group announced.

The sales momentum was largely fuelled by heightened consumer demand and the Government’s introduction of a 30% tariff on imported cement in May 2025. This policy shift gave PPC a firmer footing against cheaper imports while stimulating local production.

“During the first two months of the current period PPC Zimbabwe implemented an extended shutdown in its Colleen Bawn plant,” the company said. The closure, part of a three-year performance improvement plan (PPIP), was aimed at boosting clinker output and positioning the Zimbabwean subsidiary to supply rising market demand.

Although the extended shutdown temporarily hit margins — with EBITDA slipping to 15.3% from 29.0% in the comparable period due to higher consumption of imported clinker — profitability quickly rebounded once the plant came back online. “Following the extended shutdown, monthly EBITDA margins returned to the levels achieved in the comparable period,” the group noted.

Despite this temporary dip, PPC Zimbabwe’s cash generation stood out as a mark of resilience. “Cash generation remained strong, notwithstanding the temporarily lower EBITDA margins. Dividends of US$6 million were declared in the current period (comparable period: Nil). Dividends totalling US$14 million have also been declared subsequent to the current period resulting in total dividends declared for H1FY26 of US$20 million (comparable period: US$4 million),” the company added.

The dividend flow underscores Zimbabwe’s growing strategic weight within the group. Of the US$20 million declared, US$12 million has already been remitted, with the balance due in October. By contrast, the prior year’s first-half payout stood at just US$4 million, highlighting a five-fold increase driven largely by Zimbabwe’s standout performance.

PPC also confirmed that the sale of its Arlington property for US$30 million, announced in August, remains on track, though it had not yet been booked in the July accounts.

At a consolidated level, the cement producer continued to benefit from its “Awaken the Giant” turnaround plan. Group revenue rose 4% compared to the same four months in 2024, supported by Zimbabwe’s strong rebound and steady demand in South Africa and Botswana. Group EBITDA advanced more than 20% year-on-year, with margins improving to 15.9% from 13.7%.

Management expressed confidence that the positive momentum will carry into the second half of the year. Zimbabwe’s contribution is expected to rise further, while South African margins may ease slightly in August and September. Operational cash generation in the South Africa and Botswana unit is also forecast to remain positive, even before financing costs and capital expenditure on the flagship RK3 integrated cement plant in the Western Cape.

With Zimbabwe driving volumes, cashflows, and dividends, PPC said its regional footprint is well aligned with its strategic vision. “The positive impact of improved operational efficiency and the right commercial focus, in line with the ‘Awaken the Giant’ strategy, will enable PPC to continue competing effectively in the market while delivering returns to shareholders,” the group reiterated.

For PPC, Zimbabwe has not only stood out as its most resilient market but also as a decisive contributor to its recovery story.