South Africa’s biggest cement maker PPC finds accounting errors
PPC Ltd., South Africa’s largest cement maker, plunged deeper into crisis after reporting accounting errors and delaying the release of full-year earnings for a second time.
Mistakes were made in valuing operations in Ethiopia and Zimbabwe in the year through March 2019, the Johannesburg-based company said in a statement on Tuesday, while it also miscalculated the accounting of a foreign-exchange transaction in the Democratic Republic of Congo. These errors have now been corrected, PPC said.
The emergence of financial discrepancies comes at a crucial time for PPC, which has plunged more than 80 percent in value over the past 12 months as South Africa’s weak economy and the global COVID-19 crisis hammered demand for building materials. The 128-year-old business said this month it needs to negotiate with South African lenders to defer repayments and obtain access to further borrowings, while a rights issue is also being considered to strengthen the company’s finances.
PPC still hasn’t published annual results for the year through March, at first taking advantage of a regulator-approved extension due to challenges caused by the coronavirus lockdowns. Ongoing discussions about a potential capital restructuring have led to the need for a further delay, PPC said in its latest release, with publication pushed back to the end of September from Aug. 31.
The company on Tuesday said basic earnings per share are expected to reflect a loss of between 110 and 130 cents per share compared with the restated 9 cents per share achieved for the prior comparable period ended March 31, 2019.
PPC said it experienced double-digit growth in volumes in June and July after pandemic lockdown restrictions were lifted, but warned this may be temporary.
The shares rose 7.7 percent to 0.84 rand as of 11:05 a.m. in Johannesburg.