PPC’s share price flew up 11.4% on the JSE Monday after the aggregates, cement and ready-mix concrete producer said the positive results from a turnaround plan had continued into the second half of its financial year.

In an operational update for the 10 months to January 31, the group said benefits from the turnaround plan, which was started after the appointment a year ago of Matias Cardarelli as CEO and other changes to the executive team, were growing as the plan gained momentum.

"In the key areas of commercial, operations, and supply chain, the initiatives are already showing results, namely plant sourcing optimisation, sales product mix enhancement, improved thermal energy costs and logistics management," PPC said.

These results had increased the EBITDA margin and cash flow generation, Cardarelli said in the update.

The "Awaken the Giant" turnaround plan’s first key steps included key personnel changes, simplification of the organisational structure and realignment of the organisation culture to ensure the appropriate results-oriented focus, cost discipline and a sense of urgency.

Revenue fell 3%, while earnings before interest tax, depreciation and amortisation (EBITDA) was up 20%. The EBITDA margin increased by 3.2 percentage points.

The decrease in revenue was mainly due to a decline in the revenue in PPC's Zimbabwe operations, while the South Africa and Botswana operation delivered a flat performance.

The increase in EBITDA and EBITDA margins was due to all business units improving their results, mainly as a consequence of the turnaround plan, PPC directors said in a statement.

Capital expenditure was expected to be slightly below the guidance of R400 million to R450m for the full year. Some optimisation of capital expenditure was being re-assessed, while maintenance expenditure was as planned.

“As the stringent focus on costs and working capital take effect, the South Africa & Botswana operation's free cash flow - net cash inflow before financing activities excluding dividends from Zimbabwe - increased by a substantial 90% to R692m.”

As at January 31, 2025, the SA and Botswana group was in a net cash position of R106m. PPC Zimbabwe continues to remain debt-free and held $13m in unencumbered cash at January 31.

PPC Zimbabwe also increased its free cash flow generation leading to an increase in dividends declared and paid of $13m compared to the $11m paid in the comparable period.

Overall sales volumes in the South Africa and Botswana group fell 1%. The decline was from lower Botswana sales volumes, since sales volumes in South Africa were flat. Price increases were implemented in July and offset the decline in volumes with revenue increasing by 2%.

South Africa and Botswana group EBITDA increased 32%, resulting in margin expansion to 14.8% from 11.4%. This was also an increase from the margin of 13.7% at the half year.

“While most of the operational improvements are yet to materialise, the margin increase reflects the early delivery of a reduction in general and administrative expenses, and a contribution margin increase.”

The materials business, comprising three businesses: ready mix concrete, aggregates and fly ash, saw EBITDA improve significantly.

In Zimbabwe, volumes fell 9%, consistent with the half-year. This trend started improving in January. Revenue fell 12% in rand terms, due to the rand strengthening in the current period compared to the comparable period.

The integrated cement plant in the Western Cape that was planned to secure PPC's cost competitiveness and low carbon cement leadership, was in the final stage ahead of seeking board approval.

“The improvement of the results in the current period already reflects early delivery of the turnaround plan, ahead of the previously advised timeline,” the board said, adding it would consider a dividend for the year.

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