Rwandan cement maker Cimerwa Ltd aided in cushioning Pretoria Portland Cement revenue in the six months ending March 31. The Johannesburg Stock Exchange-listed company has a 51 per cent stake in Cimerwa Ltd.
Pretoria Portland Cement revenue
Pretoria Portland Cement’s financial results indicates its bases in Zimbabwe, Botswana and South Africa were depressed. This was as a result of narrowing market and declining cement prices in Southern Africa.
“The recently commissioned plant in Rwanda added almost R200 million ($13.4 million) to Pretoria Portland Cement revenue. This reflects the importance of an increasingly diverse operating base,” a statement from Pretoria Portland Cement said.
Although group finances declined by one per cent to US$304.3 million, the financial results released on June 14 indicate that Cimerwa Ltd contributed remarkably to the top line.
The group’s revenue before tax, interest, depreciation and amortization rose by two per cent to $72 million. Net profit mainly attributable to shareholders increased by 35 per cent to $24 million from $18 million, boosted by the sale of non-core assets.
The firm’s South African operation’s revenues before taxes, interest, depreciation and amortisation dropped by nine per cent to $41 million.
Smuggling accusations
The operations in Rwandan are however embroiled in smuggling accusations, which could drastically lower the company’s earnings.
Though the particular value and volume of cement smuggled is unknown, the racket has gone on unchecked. This has exposed exports to pressure and lowering the rate of growth in the cement sector. Rwanda spent around $82 million on importation of cement in 2015.
Uganda-based Tororo Cement and Hima Cement and Tanzania’s Kilimanjaro Cement are among regional companies hopping to reap from Rwanda’s growing cement demand.
Pretoria Portland Cement invested a total of $165 million to boost Cimerwa’s capacity from 100,000 tonnes to 600,000 tonnes per year. But industry players approximate that the plant is operating at only 60 per cent capacity.
The plan is to support the plant to reach 80% utilisation of capacity. Which means production should attain 600,00 tonnes per year of the 720,000 tonnes per year installed capacity.
