PPC flags 40 percent jump in H1 profit

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South African cement maker PPC Ltd flagged an increase of as much as 40 percent in half-year profit on Tuesday, citing robust performance in Zimbabwe and Rwanda and lower finance costs.

PPC, the subject of tie-up approaches from local rival Afrisam and Switzerland’s LafargeHolcim, said headline earnings per share likely rose by between 30 and 40 percent in the six months ended September.

Headline EPS, a widely-used performance measure in South Africa, strips out certain one-off items.

The profit guidance could give PPC shareholders a reason to hold out for a higher bid from South Africa’s No.2 cement maker Afrisam, whose all-share merger proposal that values its larger rival at about $700 million, and does not have the backing of the board and the company’s 14 percent shareholder Prudential.

Shares in PPC have climbed by nearly one-third so far this year to 7.12 rand, well above the 5.75 rand per share offered by Afrisam.

Investors are also waiting to see the terms of LafargeHolcim’s non-binding proposal to combine its African assets with those of PPC. LafargeHolcim has said it would make a firm offer this month. – Reuters