PPC projects 126% earnings rise

SOUTH African headquartered cement maker PPC says its earnings per share (EPS) for the six months ended September 30, 2021 is expected to be between US$0,63 cents and US$0,68 cents, an increase of between 110% and 126% on a comparable period.

EPS indicates how much money a company makes for each share of its stock and is a widely used metric for estimating corporate value.

The firm controls the Zimbabwe Stock Exchange listed PPC, which operates a clinker plant at Colleen Bawn in Gwanda in the southern part of the country, as well as cement-milling plants outside Bulawayo and Harare.

It is Zimbabwe's biggest cement producer, with a significant contribution to group revenues.

Apart from South Africa and Zimbabwe, PPC also has units in Botswana, Ethiopia, the Democratic Republic of Congo (DRC) and Rwanda.

In a trading statement released before the announcement of the group's unaudited interim financial statements for the period ended September 30, 2021 next week, PPC said it was satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon will differ by at least 20% from that of the previous corresponding period.

"Earnings per share for the period for continuing operations is expected to be between 63 cents and 68 cents per share, an increase of between 110% and 126% from the 30 cents per share for the prior period," the statement reads in part.

"Headline earnings per share for the period for continuing operations is expected to be between 52 and 57 cents per share, an increase of between 72% and 89% compared to the 30 cents per share for the prior period."

PPC said headline earnings for the group excluded the positive impact of both a reversal of R100 million (about US$6,4 million) of the impairments of property, plant and equipment raised at 31 March 2021 relating to the PPC Barnet DRC business and the profit on the sale of the PPC Lime and Botswana Aggregates businesses of R189 million (about US$12 million).

The company said earnings for both the current and prior periods are impacted by hyperinflation accounting in terms of IAS 29-Financial accounting in hyperinflationary economies, resulting in a net monetary gain of R440 million (about US$28 million) in the current period compared to R326 million (about US$20,9 million) in the prior period.