Cement producer Sephaku’s share price was unchanged on Thursday morning, after the company reported that headline earnings per share (HEPS) for the six months to end-September declined 42.5% to 7.06c, a result in the middle of its recent guidance.
Sephaku, which owns 36% of the South African operations of Nigerian cement maker Dangote Southern Africa, and 100% of concrete supplier Metier, said in a statement that group net profit decreased 40.9% to R14.8m, partly due to heavy rains that affected production.
Metier’s net profit decreased to R31.69m to R37.55m, mainly due to lower volumes and increase in overhead expenses from a new plant.
Dangote had a weak performance, recording a net loss of R16.09m in the first six months of the calendar year, that divisions’s half-year, due to rainfall, and competitors delaying increases in prices.
However, Sephaku CEO Lelau Mohuba said Dangote had recovered sales volume during its third quarter, and increased prices.
“This, coupled with improved cost control, saw [Dangote] achieving a profit of R32m for the third quarter, of which SepHold’s equity earnings were approximately R12m,” he said.
Dangote had announced in October that it was dropping out of the bidding war for PPC, which is considering a merger to improve its competitiveness.
Sephaku’s share price gained 7.69% on the news it was pulling out, but has since given up these gains. At 9.50am the company was trading at an unchanged R2.45, but had lost 12.19% so far in November, and 10.91% so far this year.