The change in functional currency in Zimbabwe affected PPC's performance in Zimbabwe, resulting in reduced revenue and earnings, CEO Johan Claassen.

PPC, SA’s largest cement maker, on Wednesday postponed the release of annual results to allow auditors to consider fair value adjustments of Zimbabwean assets.

This came after the Zimbabwean government's decision on Monday to ban the day-to-day use of foreign currencies such as the rand, British pound and the US dollar in an effort to force the take-up of the temporary domestic currency, called RTGS dollar, which was introduced in February.

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PPC said Zimbabwe revenue declined by 20% to R1.4bn “against the backdrop of a weaker cement market, clinker shortages and depreciation in the functional currency in the second half of the financial year”.

Earnings before interest, tax, depreciation and amortisation (ebita) in Zimbabwe were also down by 20% to R461m.

But Claassen said the Zimbabwe business was self-sufficient “and continues to drive local procurement and exports to reduce forex requirements”.

“Debt obligations continue to be serviced using in-country cash resources, while management has implemented contingency measures to mitigate the impact of the liquidity challenges,” he said.

PPC owns 70% of PPC Zimbabwe. As at March 31 2018, PPC Zimbabwe comprised a clinker manufacturing operation at Colleen Bawn and two milling plants in Bulawayo and Harare.

PPC’s group revenue for the year ended March increased by 1% to R10.4bn, while headline earnings per share were up 33% to 20c.

The group said overall cement volumes also increased by 1% to 5.9-million tonnes. The company did not declare a dividend.

PPC said the southern Africa cement division took strain from a combination of poor market conditions and a surge in imported cement products during the year, which led to a drop in cement volumes in SA.

Cement imports to SA increased by 84% to 1-million tonnes in 2018, PPC said. Imports received via Durban increased by 89% to more than 600,000 tonnes, while imports received in the Cape soared by 48% to 209,000 tonnes.

A 30% increase in fuel prices during the course of the year pushed up the division’s per tone distribution costs by 10%.

Cement southern Africa’s revenue declined by 1% to R5.4bn.

“Pleasingly, the Democratic Republic of Congo  business achieved positive ebita in a challenging market. In Rwanda, the business achieved increased output benefiting from ‘de-bottlenecking’ in the first half of the financial year,” Claassen said.