PPC Ltd., South Africa’s largest cement maker, said first-half profit declined 38 percent as domestic prices for the building material fell.
Earnings per share before one-time items dropped to 0.60 rand ($0.05) in the six months through March from 0.96 rand a year earlier, the Johannesburg-based company said in a statement on Tuesday. Sales advanced 9.2 percent to 4.5 billion rand.
“Cement selling prices declined in South Africa and Botswana while limited growth was recorded in other territories,” the company said in the statement. “The delivery of the expansion projects remains a critical focus.”
Chief Executive Officer Darryll Castle, appointed in December, is working to reduce costs as the company expands in Africa to offset sluggish demand in its home market. PPC is building new plants in the Democratic Republic of Congo, Rwanda, Zimbabwe and Ethiopia, and has a target of 40 percent of sales from outside of South Africa by 2017.
PPC has begun a performance-improvement program aimed at increasing sales and reducing costs in order to boost profit by 400 million rand, it said. The first-half divided was reduced to 0.24 rand a share from 0.38 rand.
The past year for PPC has been turbulent, after its previous CEO resigned amid differences with other executives that turned into a protracted public dispute and resulted in a shake-up of the board. The company also held merger talks with fellow South African cement producer AfriSam Group (Pty) Ltd. before negotiations were called off in March.
The turmoil has been reflected in PPC’s shares. The company has dropped 36 percent in Johannesburg this year, the fourth-worst performer on the 170-member FTSE/JSE Africa All-Share Index.
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