Dual-listed cement producer PPC Limited has reported a resilient performance for the five months ended 31 August 2026, with group EBITDA rising 40% despite subdued demand in South Africa.
In an operating update issued on 28 September 2026, the group, which comprises the South Africa and Botswana business and its Zimbabwe cement operation, said group revenue increased by 1% compared to the same period last year. Growth was driven by a 5% revenue increase in Zimbabwe, which offset a 2% decline in South Africa and Botswana cement revenue.
The group’s EBITDA margin strengthened significantly by 6.2 percentage points to 22.1% from 15.9% in the comparable period, underscoring the impact of its ongoing Awaken the Giant turnaround strategy.
PPC said the 2027 financial year is a consolidation year, focused on embedding the substantial gains achieved in FY25 and FY26 while completing construction of its new integrated cement plant in the Western Cape, RK3. The group is positioning for a meaningful acceleration in growth, profitability and value creation from FY28 onwards once RK3 is commissioned.
In South Africa and Botswana, cement sales volumes declined 8% year-on-year, reflecting weak market conditions and aggressive competitor discounting. However, revenue declined by only 2% due to improved price, product mix and the impact of a diesel cost surcharge.
Despite the volume pressure, EBITDA, including group services, grew by 3.3% and the EBITDA margin expanded by 0.8 percentage points to 16.7%. PPC said the performance demonstrates its ability to drive earnings and margin improvement even in an inflationary, low-demand environment.
The group noted that Statistics South Africa reported a 0.2% quarter-on-quarter contraction in real GDP in the second quarter of 2026, while gross fixed capital formation declined by a further 0.2% after contracting 1.0% in the previous quarter.
Against this weak backdrop, PPC said certain producers pursued volume growth through aggressive price discounting, a move it said does not create additional demand but destroys value and undermines profitability.
“PPC continues choosing to protect value and preserve sustainability, maintaining the commercial discipline established under Awaken the Giant, prioritising value accretive sales and margin growth,” the company said, adding that its superior asset base, footprint and strong balance sheet leave it best positioned to respond on price if required.
The South Africa and Botswana business recorded a net cash outflow before financing activities of R1.137 billion in the period, compared to R221 million last year, reflecting substantial capital investment in RK3. Construction remains on track for completion in the final quarter of FY27 and within the board-approved budget of R3.1 billion.
PPC Zimbabwe continued its strong momentum, with cement sales volumes growing 3% supported by robust demand across industrial and retail sectors.
The plant performance improvement plan continues to deliver results, with higher own-clinker production driving profitability. The Collen Bawn kiln achieved world-class operating performance during the first quarter of FY27.
EBITDA margin expanded sharply to 34.2% from 19.1% in the comparable period. While the prior year was affected by an extended planned maintenance shutdown at Collen Bawn, the company said the current results also reflect structural benefits from improved plant reliability, higher clinker self-sufficiency and disciplined execution.
Cash generation remained strong, supporting increased shareholder returns. PPC Zimbabwe declared dividends of US$15 million during the period compared to US$12 million last year, with a further US$10 million declared after the end of August. The Zimbabwe unit remains debt-free.
PPC said the planned maintenance shutdown currently underway at Colleen Bawn will moderate margins reported for the first half of FY27, but profitability is expected to remain ahead of the prior year.
The group said it does not anticipate a near-term improvement in South African cement trading conditions, with discounting persisting while elevated diesel prices continue to pressure distribution and production costs. It will remain focused on quality, service reliability and operational performance.
PPC also said progress has been made on its anti-dumping application before the International Trade Administration Commission relating to cement imports from Mozambique and Vietnam, noting that a favourable outcome would be an important step towards restoring fair competition and supporting local investment and jobs.
In Zimbabwe, the second-half performance is expected to benefit from the compounding effect of improved margins and volume growth. Progress continues on the proposed new integrated plant in Zimbabwe, including engagement with Sinoma on the EPC contract, mine prospecting and assessment of financing options.
The group said its expectations for FY27 remain unchanged, with FY27 being a year of consolidation and the next meaningful step-change in performance anticipated in FY28 following commissioning of RK3.
