PPC First-Half Profits Fall on Tax, Zimbabwe Costs

PPC Ltd., South Africa’s biggest cement maker, said first-half profit fell 20% as a result of tax charges and costs associated with complying with Zimbabwe’s ownership laws.

Net income for the six months through March declined to 295 million rand ($31.9 million) compared with 369 million rand a year earlier, the Johannesburg-based company said in a statement today. Revenue increased 8 percent to 3.81 billion rand from

3.53 million rand. The company will pay an interim dividend of 38 cents for the six months, unchanged from a year ago.

PPC, which has annual production capacity of eight million tons, is expanding in Africa through acquisitions to offset tougher competition in its domestic market. It sold 650 million rand worth of three-year bonds in March to help fund the plan.

Cement sales in Zimbabwe and South Africa increased in the review period, PPC Chief Executive Officer Ketso Gordhan said in the statement. “This encouraging trend was, however, tempered by weakness in cement sales in Botswana as well as lower demand in the lime and aggregate divisions.”

The stock declined 0.1 percent to close close at 34.74 rand in Johannesburg yesterday, giving the company a market value of 21 billion rand. PPC shares have gained 1.6 percent this year, compared with a 4.5 percent rise in the FTSE/JSE Africa All-Share Index.

(Corrects company name in first paragraph of story published May 16.)
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