Regional cement producer PPC Limited says volumes at its Zimbabwe unit went down by 30 percent to 35 percent for the six months to September 30, 2019 compared to same period last year as inflationary pressures persisted.
The decline was in line with the overall market whilst cement pricing was adjusted on a weekly basis to contend with the rapid increase in inflation and the devaluation in currency.
The inflationary pressures exacerbated by high exchange rate and foreign currency shortages resulted in erosion of consumer spend.
Revenue for the period also went down 54 percent against the backdrop of a hyper-inflationary environment, severe weakening of the local currency, erratic power supplies as well as a weaker cement market.
Earnings before interest, tax, depreciation and amortization (EBITDA) eased 43 percent to R201 million with EBITDA margins showing a marked improvement to 40 percent versus 32 percent in the prior year comparative period.
Despite the economic headwinds, the Zimbabwe unit has remained self-sufficient and is preserving cash by investing in inventory and accelerating capital expenditure.
“Our focus in Zimbabwe remains to deliver our customers premium products and solutions at stable or improved EBITDA margins, as well as to ensure financial self-sufficiency of the business against the backdrop of a challenging macroeconomic environment.
“The PPC Zimbabwe team has delivered on both these strategic imperatives,” said PPC group chief executive Roland Van Wijnen.