Cement producer expects earnings slump

PPC on Monday said it expected to see its earnings for the first half of 2015 to decline due to a weak trading environment.

Cement producer PPC announced in a trading statement on Monday that it expected to see its earnings for the first half of 2015 to decline due to a weak trading environment.

"The operating environment in SA remains tough on the back of weak economic growth, which has been exacerbated by power shortages, and increased competitor activity.

"Domestic sales volume growth in Zimbabwe and Botswana has shown an upward trend. However, in all territories muted selling price growth has been achieved," said the company.

PPC said headline earnings per share would fall between 25% and 45% to between 53c and 73c compared with the year-earlier period.

The company said its board was considering the merits of the merger proposal received from AfriSam late last year and further announcements would be made.

PPC shareholders would pick six new board members from a reduced list of 10 nominees at its annual general meeting on Monday‚ the first step to resolving a four-month period of uncertainty at one of SA’s oldest listed companies.

Looking ahead, PPC said it had plans in place to mitigate the effects of the weak trading environment.

"While the South African trading environment will remain tough and highly competitive, we believe that our various response strategies have positioned PPC well to limit the impact on the group. The release of major infrastructural projects in SA, Botswana and Zimbabwe would provide a key driver for the demand of cement products," it said.

PPC expects to release its interim results on May 19.

At 1.08pm the share was down 5.02% to R22.50, valuing the company at about R13.7bn.