Regional cement maker Pretoria Portland Cement (PPC) says it anticipates half year earnings to come in between 30 and 40 percent higher than last year, following the disposal of certain non-core assets which realised profit before tax of R100 million, about $630 000.
In a trading statement to shareholders, PPC, which is listed on both the Johannesburg Stock Exchange (JSE) and Zimbabwe Stock Exchange (ZSE), said the expected earnings before interest, taxation, depreciation and amortization (EBITDA) for the six month period to 31 March 2016 will show an improvement on the previous year due mainly to improved efficiencies and cost savings.
“PPC’s Board of Directors (“Board”) advises that basic earnings per share for the six month period to 31 March 2016 are expected to be between 30 percent and 40 percent higher (between 68 cents and 73 cents) than basic earnings per share of 52 cents, reported for the previous corresponding period to 31 March 2015,” the statement reads.
The company however warned that basic headline earnings per share for the six month period to 31 March 2016 is expected to be between 10 percent and 20 percent lower than basic headline earnings per share of 60 cents in the previous year.
It also indicated that it will undertake a rights issue in order to raise up to R4 billion ($253 million) to pay off debts and to fund current investment projects.
PPC’s debt levels, including non-recourse debt, are anticipated to peak at between R10 billion ($630 million) and R12 billion ($760 million) in 2017. PPC’s South African debt is R5.8 billion ($360 million) while the ring-fenced project finance debt relating to the rest of its Africa expansion projects is R3.8 billion ($240 million).
“PPC is in discussions with various parties with respect to the potential underwriting of the proposed rights issue. The Company will also consider such other forms of equity capital raising as may be appropriate in light of its position, market conditions and other factors,” the company said.
On Tuesday PPC said it was sweating on a possible credit downgrade from a credit rating agency this year. – The Source
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