A rebound in infrastructure spending kept earnings declines in check at PPC, South Africa’s largest cement producer said on Tuesday, adding that sales growth in evidence since mid-2020 had accelerated in recent weeks.
It said six months to September headline earnings per share fell 40% to 19 cents, at the bottom of its forecast range – but investors welcomed the progressive upturn in its business since then, and PPC shares were up 15% by 1137 GMT, hitting a seven-month high.
Construction activity in South Africa was halted in April and May under lockdown curbs to contain the spread of Africa’s worst coronavirus epidemic.
PPC said cement sales fell more than 35% in its first quarter to June, before rising 20-25% in the second quarter after the restrictions were lifted.
“This sales momentum has continued into October and November with increased infrastructure spend beginning to come through,” said its Managing Director of PPC South Africa & Botswana, Njombo Lekula.
Six months revenues edged up to R5.01 billion ($333 million) from R4.95 billion a year earlier, PPC said, adding that South African cement industry sales volumes were likewise in line with the prior year despite the Covid-19 related restrictions.
CEO Roland van Wijnen said sales had recovered in all of PPC’s markets, and that retail sales were set to come back to normal levels and construction would start to pick up again and become a “relevant” business sector.
The company also said Chief Financial Officer Ronel van Dijk was stepping down, with insider Brenda Berlin taking over from mid-February.