CEMENT manufacturer, PPC Zimbabwe Limited’s (PPCZL) cement sales volumes increased by 22% in the four months ended July 31, 2025, benefiting from stronger consumer demand and tariffs on imported cement imposed in May this year.
In May 2025, the Zimbabwean government introduced a 30% surtax on imported cement, as outlined in Statutory Instrument 50A of 2025, following intense lobbying from local manufacturers of the building material.
The measure faced pushback from importers, some of whom challenged its legality in the High Court, arguing that it violated Common Market for Eastern and Southern Africa regulations and was disrupting business operations.
However, in a trading update for the four months ended July 31, 2025, PPCZL’s South African parent firm, PPC Limited (PPC), revealed its local unit was already seeing some gains from the legislation.
“Cement sales volumes in Zimbabwe increased by 22% in the current period compared to the comparable period, largely as a result of a combination of strong consumer demand and the positive impact of the introduction of a 30% tariff on imported cement in May 2025,” PPC said.
“During the first two months of the current period PPC Zimbabwe implemented an extended shutdown in its Colleen Bawn plant.
“This was planned, as part of the three-year plant performance improvement plan, aimed at better positioning PPC Zimbabwe to produce higher volumes of own-clinker for the production of cement to supply the growing demand in the market.”
PPC said the costs of the extended shutdown, combined with the higher consumption of imported clinker, impacted earnings before interest, taxes, depreciation, and amortisation (EBITDA) and the EBITDA margin in the first three months of the current period.
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“PPC Zimbabwe’s EBITDA margin reduced to 15,3% from 29% in the comparable period. After the extended shutdown, the monthly EBITDA margin returned to the level achieved in the comparable period,” PPC said.
The group, however, noted that cash generation remained strong, notwithstanding the lower EBITDA margins.
“Dividends of US$6 million were declared in the current period (comparable period: Nil),” PPC said.
“Dividends totalling US$14 million have also been declared subsequent to the current period resulting in total dividends declared for H1FY26 of US$20 million (comparable period: US$4 million).”
In an update on the sale of the Arlington property for US$30 million last month, PPC revealed the deal remains on track, but has not been accounted for in the current period.
PPCZL’s balance sheet will see an immediate uplift from the sale, with proceeds set to unlock significant value for PPC.
“Group revenue for the current period increased by 4%, driven by growth in both SA and Botswana cement and Zimbabwe,” PPC said.
“Group EBITDA continued to increase over the comparable period, and the EBITDA margin reached 15,9% in the current period, which is a growth in excess of 2PP in comparison with the 13,7% of the comparable period.
“As margins increase considerably in Zimbabwe and reduce marginally in South Africa over August and September, group EBITDA margins are expected to continue to increase from the current period level.”
