Sephaku Cement reports strong results in 2015

Bywanglee

Updated Tue, 30 Jun 2015 16:50:46 GMT

South Africa: According to Business Day, Sephaku Cement is ramping up production towards a steady state at both its Delmas and Aganang plants.

In the first three months of 2015 to 31 March 2015, Sephaku Cement's revenue increased by 36%, while its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 39% to US$11.3m. Its operating profit grew by 44% to US$8.87m and its profit after tax grew by 57% to US$3.83m. Sales revenues came mainly from the Delmas plant, which reached steady state production in November 2014. Clinker and cement production at Aganang started in August 2014 and October 2014, respectively.

"We are pleased to have commenced clinker production at Aganang because it has improved our cost efficiencies and enabled Sephaku to remain highly competitive," said CEO Lelau Mohuba.

Sephaku Cement's market penetration continued, as reflected by 29% higher quarterly sales of about US$42.4m. "Our main focus going forward is to sweat the assets and increase free cash flows in preparation for the distribution of dividends," added Mohuba. Sephaku said that the operating environment remained highly competitive, as overall cement demand remained flat and the number of producers had increased. Subdued demand from South Africa's construction industry also resulted in prices remaining flat on a year-on-year basis.