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PPC ponders reinstatement of dividends – Moneyweb

JSE-listed cement and building materials company PPC has delivered another solid financial performance, enabling it to further degear its balance sheet, and has indicated that it is getting to a point where it can consider again paying shareholders a dividend.

PPC last paid a dividend six years ago in November 2015.

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Group CEO Roland van Wijnen confirmed on Tuesday that once the group has degeared its balance sheet to an appropriate level, it will lead to a situation where it can consider resuming dividend payments.

“I think it is important for our shareholders to get a return on their investment. They have been waiting for a long time,” he said.

Resilience

Van Wijnen said PPC produced a resilient financial performance in the six months to end-September 2021, with its gross South African debt reduced to R1.7 billion.

However, Van Wijnen said this does not yet include the about R500 million proceeds from the divestment of PPC and Botswana Aggregates, which will be used to further reduce the group’s South African debt.

Read: PPC secures R2.1bn in new facilities from its SA lenders

“With this, we will have put PPC back on a solid footing when it comes to our balance sheet,” he said.

Van Wijnen added there is a further about R600 million in its Zimbabwe and Rwanda operations that will also be used to reduce debt.

Van Wijnen said PPC’s capital restructuring is finished apart from some outstanding administrative and paperwork and it should all be completed by the end of this year.

“We have a clear undertaking that a capital raise is no longer needed and there is no longer any recourse from PPC DRC back to South Africa so for me it [the capital restructure] is done,” he said.

Group revenue rose by 20% to R5.1 billion and benefitted from a 12% increase in cement sales volumes and the positive impact of hyperinflation accounting on PPC Zimbabwe’s financials.

Read: Capital raise by PPC appears increasingly unlikely

Van Wijnen said the group’s South African cement volumes were 5% higher than they were pre-Covid-19, which is in line with their expectations.

Capacity

PPC Cement South Africa and Botswana MD Njombo Lekula said at this stage the group has in excess of two million tons of capacity it can bring back in the event of further increased demand.

Van Wijnen said the average producer price index for PPC South Africa Cement is at 9.2% and its price increases are on average between 4% and 8%.

“The only reason that we have been able to increase our margin from 14.4% to 18.7% is on the back of the hard work done by the people in team PPC,” he said.

Van Wijnen said the largest cost increases were electricity and distribution, with electricity costs increasing by 16%, distribution costs overall by 12% and “fuel higher than that”.

PPC group earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 13% higher to R945 million and group operating profit increased by 10% to R633 million.

Cash generation was strong and PPC settled a further R309 million in debt in the period.

Basic headline earnings per share rose by 83% to 55 cents.

Lekula said the recent designation of locally produced cement for all government-funded projects will have a positive impact on the industry once the infrastructure rollout gathers momentum.

But Lekula said they had not yet seen any improvement in demand for cement because of the designation of cement.

Read: Treasury bans use of imported cement on all government-funded projects

“We are obviously hoping that the infrastructure rollout from the government will kick off. We have seen some green shoots in road projects that have started already. What we are hoping that designation will do is again conscientise people in terms of that spend from the government.

“But that is just a very small portion of what we are able to get into the market at this stage. Retail is where you and me have to decide what is the right thing to do,” he said.

The South African cement industry has also applied to the International Trade Administration Commission (Itac) for tariff protection against imported cement.

But Van Wijnen said cement imports continue to surge on the back of some Asian countries dumping their materials below full cost price in the market.

“For every bag of cement that is not produced locally, a local producer is unable to contribute to the communities in which they operate … unable to pay taxes that help to drive society. For every bag that is imported, a company in, for example Vietnam, is able to pay taxes and help their communities,” he pointed out.

“As a global citizen, I shouldn’t mind where the development takes place and whether we lift poverty in Vietnam or in South Africa. But as a temporary resident of South Africa it pains me to see that we are not doing the maximum to bring South Africa up to the next level that it so much needs,” he said.

Read: Cement imports rocket by 51% in the first eight months of 2021

Looking ahead, Van Wijnen said PPC’s focus is on optimising operational efficiencies to mitigate increasing input cost pressures and reduce its environmental footprint while further enhancing its financial resilience.

Analyst comment

Rowan Goeller, an analyst at Chronux Research, said the cement market has normalised, adding the last five years have been tough for PPC with new competitors and suppliers entering the market, including importers and blenders, and weak demand.

Goeller said the cement market is cyclical but it is relatively settled currently and “PPC balance sheet wise has emerged from a very tough time”.

“You have now got steady straight cement operations, which you have not seen for a long time, and the share price I think is kind of reflecting that now,” he said.

Goeller pointed out that it will be challenging for PPC to achieve real price increases given the high cost inflation.

However, he said a ruling by Itac on tariffs on imported cement will immediately give local producers back significant market share, about 10% of the current demand, and also increase plant utilisation rates.

Goeller said this will be beneficial to the cost per ton and getting the Ebitda margin above 20%, the level at which the industry is comfortable to reinvest in cement capacity.

He said it will be difficult to get margins above 20% at the moment purely on pricing and this probably needs to be achieved through volume growth “if imports are cut out of the market through tariffs” and plants running at higher utilisation rates, which will help to reduce unit costs.

Shares in PPC dropped 3.4% on Tuesday to close at R5.12 per share.

Listen to Van Wijnen’s interview with Fifi Peters on the group’s latest results (or read the transcipt here): 

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Court Orders Ex-CZI Boss Zizhou To Pay US$180 000 For Sexual Harassment – New Zimbabwe.com

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By Mary Taruvinga


FORMER Confederation of Zimbabwe Industries (CZI) chief executive Farai Zizhou has been ordered by the High Court to pay his ex-personal assistant Rita Marque Mbatha US$180 000 damages for sexual harassment.

This follows a spirited fight by Mbatha over the past two decades after she was sexually harassed by Zizhou during her time of employment with the CZI.

Mbatha had claimed US$500 000 from both Zizhou and CZI. However the law suit against the CZI is yet to be finalised.

She worked at the CZI between 2002 and 2003 and Zizhou made sexual advances to her.

In delivering his judgment, High Court judge, Justice Martin Mafusire said he was impressed by how Mbatha pressed on against all odds.

She said  Mbatha, now an International Alliance representative, and human rights advocate was a strong woman who had fought for justice.

“The matter has had a long and turbulent history. Mbatha says the wheels of justice have turned ever so slowly for her. There can be no denying that. She has been to this court. She has been to arbitration,” the judge said.

“She has been to the Supreme Court. She is back to this court. She strives for closure. Any lesser mortal would probably have given up. Plainly, the Mbatha is no lesser mortal. Her tenacity and fighting spirit have moved mountains. She is still fighting. This judgment only settles her case. The other half still continues.”

Mbatha alleged sexual harassment of female employees at CZI was rampant, and said Zizhou was the sole culprit.

“The sexual harassment was over some nine months. It started when she was still on probation. She got employed by the second defendant in September 2002.

“She got fired in July 2003. It was an unfair dismissal. The first defendant (Zizhou) engineered it all. He schemed it. She had reported him for sexual harassment. He took revenge.

“The charges were inappropriate touching, unwelcome offensive jokes, invitation by innuendo to an inappropriate sexual relationship, receiving offensive telephone messages, receiving pornography on the computer, an attempt to kiss by force, causing an injury on the thigh in the process of resisting,” reads the judgement.

According to electronic messages submitted during the application, Zizhou pestered Mbatha to give in to an affair despite the fact that they were both married.

“Rita, I have used the above caption just in case. Please delete completely immediately after reading. Look at the time I am sending this note-just to show you I could not sleep before writing this note to you Rita.

“I love you very much and wish you could be mine. When I am taking a bath with Clara I always pretend it’s you. The torture is unbearable. It hurts me that when I touch your lovely hand you cringe and ask me to stop. Do I repulse you? I desperately need to kiss you,” Zizhou wrote in an email to Mbatha.

“Shamwari if I do get dismissed, it will be because I would like to do whatever I can for the person I care for most, you. Right now I am under pressure to balance the budget of CZI.

“You have just completed your probation and according to CZI rules, you are not eligible for the general increase for permanent staff, but the small adjustment that is in your appointment letter, I am bending the rule for you.

“Please hold on tight to me – if we crash – we crash together. I am awarding you the same percentage increase as everybody else. I am defending it against the treasurer this morning. Doing so will cost CZI an extra $3 million in employment and other costs for the three people involved.

“The others are lucky to be associated with you. This will wipe out the surplus we were going to make after selling the Land Rover. The treasurer had made his recommendations following the rule and I have asked Venek to make the changes before he comes for the final meeting this morning.”

Zizhou added: “I feel guilty as it is not right to expropriate you from your husband but unfortunately… Please God help me on this one as it has been giving me sleepless nights. You are the love of my love. I will do anything for you.”

The arbitral tribunal in March 2014 found Mbatha was unfairly dismissed and sexually harassed by Zizhou. Psychiatric reports obtained from Mbatha’s doctors noted that she was severely traumatised by the experience.

Justice Mafusire ruled Mbatha suffered severe posttraumatic stress disorder as a result.

“This condition manifested almost immediately after the abuse. She experienced recurrent involuntary and intrusive memories of the traumatic event. Her pain was acute, with chances of recovery rated as being very poor. Treatment would be extensive and indefinite.”

“She suffered physical and emotional pain, which scarcely suppressed anger. During the counselling sessions, she would lose track of her answers midway through and would ask that questions be repeated,” reads the judgment.

“Before the incident, she was engaging, outgoing, and loved reading. She had a good sense of humour. All that is gone. She experiences recurrent nightmares. Her sleep is broken most nights. She has lost all confidence in herself. There was another kind of collateral damage. She says her marriage broke up, largely because of the change in her personality.

“She says the situation was further compounded by the defendants’ conduct after her unfair dismissal. She could not secure alternative employment thanks to the defendants’ negative testimonials to her potential prospective employers. The plaintiff’s case seems such a textbook case. Manifestly, no amount of money seems adequate enough to compensate for her loss,” the judge said.

“The sexual harassment was persistent. There has never been an apology.

“Taking all factors into account, it is considered that the proper level of damages for the sexual harassment perpetrated by the first defendant upon the plaintiff during the period of the plaintiff’s employment with the second defendant from September 2002 to June 2003 is US$180 000, or the equivalent thereof in local currency, convertible at the inter-market bank rate at the time of payment.

“The first defendant shall pay the plaintiff the amount aforesaid together with interest at the prescribed rate from the date of this judgment to the date of payment. The first defendant shall pay the plaintiff’s costs of suit.”

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Civil servants get forex bonuses, decry high bank charges – The Herald

The Herald

Africa Moyo-Deputy News Editor

Civil servants’ representatives are generally excited that their members have started withdrawing their US dollar bonuses, but are upset that some banks are deducting significant bank charges despite the instruction that such accrued charges should not be deducted from bonuses.

These are bank charges of anything between US$100 and US$200 on accounts that were opened last year when Government was paying its workers a cushioning allowance in foreign currency. 

The account holders then retained the accounts although there was no money in them and the banks continued to levy charges, only collecting these when the bonus money arrived.

The levying of accrued bank charges is despite communication from the Ministry of Finance to the Reserve Bank of Zimbabwe last week that there should be no backdating of bank charges. 

In an interview yesterday, Zimbabwe Teachers’ Association (Zimta) chief executive officer Dr Sifiso Ndlovu said while their members were getting their US dollar bonuses, the charges needed to be removed altogether since the forex bonus is a once-off cushion from President Mnangagwa.

“What I have gathered is that a number of banks have released the US dollars and people are getting it,” he said.

“But I heard that some of the money has been chewed by bank charges, which I think should not be an issue since this was a once-off payment. The bank charges are the downside to the excitement we have over the US dollar bonuses.

“The Finance and Economic Development Minister (Professor Mthuli Ncube) said he would look into the issue of bank charges and we duly call upon him to do so, so that civil servants take home all their money.” 

Permanent Secretary for Finance and Economic Development Mr Mr Guvamatanga last night said the ministry sent communication to the Reserve Bank last week directing that banks should not backdate bank charges.

Mr Guvamatanga

“Some of the foreign currency accounts were opened last year when Government was paying some US dollar incentives to civil servants.

“The accounts remained open and since then, they have been accruing bank charges. Now, some greedy banks want to backdate the charges to last year, but we have directed them not to backdate the charges,” said Mr Guvamatanga.

He added that some banks were lying to their clients that they had not yet received foreign currency from the Reserve Bank, for as yet unknown reasons.

A comprehensive statement on the payment of US dollar bonuses is expected from the Ministry of Finance today. 

Public Service, Labour and Social Welfare Minister Professor Paul Mavima told The Herald last night that the payment of US dollar bonuses was on-going although some employees have challenges with their foreign currency accounts.

Prof Mavima

“By and large, the withdrawal of US dollar bonuses is going on smoothly,” said Prof Mavima.

“But I have to say that the demand for cash is quite high and you see long queues for cash at banks. However, this is a good challenge.

“We urge banks to avail as much cash as possible to civil servants at one go, so that they minimise the number of times that people go to the bank to save transport costs.” 

President Mnangagwa decided on a once-off payment of US dollar bonuses for civil servants and Government pensioners to cushion them from the fluctuating exchange rates, which eroded the value of their earnings.

Government says paying bonuses in US dollars was ideal to ensure that they don’t take their earnings to the parallel market to buy forex, a move that would erode their earnings.

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RTG subsidiary creates revenue streams for social influencers – NewsDay

BY WINSTONE ANTONIO
GATEWAY Stream, a subsidiary of the Rainbow Tourism Group (RTG), yesterday launched a platform that will enable social influencers to monetise their brand equity on the Gateway Stream platform.

The Gateway Stream is Zimbabwe’s one-stop online marketplace with nine sub-applications across a diverse range of products, services and experience.

Through the Gateway Stream Social Influencer, artists will be issued with an account and a promo-code and they will be able to sell all products found on the Gateway Stream platform and earn a commission from the sales.

In his address at the launch, RTG group chief executive Tendai Madziwanyika said they aimed to help social influencers exploit the valuable asset they had, that is, access to markets, in a way that ensures that they monetise their brand equity.

“Social influencers have what corporates want, a defined market and reach, which they access in an effective, cost-effective way,” he said.

“Through the Gateway Stream Social Influencer, artists will be able to sell a diverse product range found on the Gateway Stream platform from groceries, hardware, clothing, hotel accommodation, adventure activities, food and drink, and short-term insurance and earn a commission from the sales.”

Madziwanyika said it was time for social influencers to make money from their brands using music and entertainment as a hook.

“The sky is the limit for opportunities which our local social influencers can explore on Gateway Stream.

“Imagine just converting 1% of their following. They will be well on their way to becoming millionaires.”

Gateway Stream general manager Taremeredzwa Chipepera said so far they had registered over 30 social influencers, ranging from musicians to comedians.

“Instead of being just brand ambassadors for different companies, they can earn passive and perpetual income directly from their networks,” he said.

“This initiative is a mutually beneficial partnership that will drive traffic and sales volumes on the platform.

“We are driven by the desire to help social influencers gain greater value from their social networks.”

He said a follower of the social network would quote the promo-code when processing a booking or making a purchase on Gateway Stream.

“Once a member completes a purchase by way of payment, the agreed commission level for the specific product category will be credited to the social influencer’s account.

“The more sales the social influencer makes, the more money they stand to earn,” he said.

Chipepera said Gateway Stream was working on the development of a portal which would enable social influencers to have backend access where they can load their products, view transactions under their promo-code, track their commission and request pay-outs from their account.

“Besides the products on the platform, social influencers can also have an opportunity to brand and sell their own memorabilia such as clothing lines, perfumes, et cetera on the Gateway Stream platform,” he said.

  • Follow Winstone on Twitter @widzoanto

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