PPC H1 HEPS down 41%

South Africa's leading cement producer, PPC, recently disclosed a 41% decrease in headline earnings per share for the first half of 2021. Despite facing financial challenges, the company remains cautiously optimistic about its future prospects. In a recent interview with CNBC Africa, PPC CEO, Roland van Wijnen, shared insights on the company's performance and future outlook. Van Wijnen acknowledged the impact of the initial COVID-19 lockdown but expressed confidence in the company's ability to navigate the current environment. With a focus on stringent health protocols and regular testing for employees, PPC has successfully contained active cases among its workforce. The CEO emphasized the importance of ongoing precautions to prevent any future outbreaks. One positive development for PPC has been the uptick in cement sales and improved financial indicators. Van Wijnen highlighted the rise in cement volumes, increased cash flow, and higher operating profits as signs of recovery. While acknowledging the challenges posed by the pandemic, he remained hopeful about the company's resilience. Infrastructure spending has emerged as a key area of growth for PPC. Van Wijnen noted a surge in roadworks and housing projects across regions like Halteng, North West, and Limpopo. As tenders are awarded and projects materialize, PPC stands to benefit from the demand for construction materials like cement and aggregates. Despite the positive outlook, PPC continues to grapple with high debt levels, which currently exceed double the market capitalization. Van Wijnen outlined the company's debt reduction strategy, emphasizing the importance of an improved trading environment and the ongoing sale of a non-core division to alleviate financial pressure. In terms of market performance, PPC remains optimistic about its operations in Zimbabwe, the DRC, Rwanda, and South Africa. Van Wijnen cited Zimbabwe as an exciting market with significant activity and growth potential. While acknowledging economic challenges in certain regions, he expressed confidence in PPC's position to capitalize on emerging opportunities. The interview also touched on PPC's relationship with the Public Investment Corporation (PIC), Africa's largest fund manager. Van Wijnen addressed the PIC's decision to reduce its shareholding in PPC, attributing it to a strategic reassessment of the cement industry's relevance in their portfolio. While acknowledging the decline in share price and the PIC's actions, he maintained a positive outlook on PPC's partnership with institutional investors. Overall, PPC's performance in the first half of 2021 reflects a mix of challenges and opportunities. As the company navigates the ongoing impacts of the pandemic and pursues debt reduction strategies, its focus on infrastructure growth and market diversification remains at the forefront of its strategic vision.