Building and construction materials company Sephaku Cement (SepCem) achieved an after-tax profit of R42.6-million for the financial year ended December 31, 2024, compared with R41.9-million in 2023.

Sales volumes decreased by 4% year-on-year for the 12 months, resulting in a 1.4% decline in revenue to R2.79-billion from R2.82-billion in the prior financial year.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the year dropped by 11.2% to R320.7-million.

SepCem experienced strong Ebitda growth in the first half of 2024, with an increase to R146.7-million from R106.9-million in the year to end December 2023.

However, as highlighted in SepCem's interim results for the nine months ended September 30, 2024, the improved performance in the first half was subsequently negatively impacted on by the impact of unplanned kiln stoppages for repairs, which led to overheads being absorbed by lower production levels.

These disruptions carried over into the fourth quarter, resulting in an overall decrease in Ebitda, SepCem said in a trading statement on March 31.

“SepCem continues to implement various cost-saving initiatives, measured by the Dangote Group, to mitigate the negative impact of low demand in the market. Further, an easing of finance cost and a lower depreciation charge contributed to maintaining a flat profit after-tax number,” it said.

Meanwhile, in terms of debt management, the bank loan capital balance at the year-end was R135-million following the repayment of R183-million, which included the repayment of accrued interest of R27 million.

“SepCem repayments are current, and the associate is in full compliance with the loan covenants,” it added.

As a subsidiary of Africa cement producer Dangote Cement and following Dangote Cement 2024 financial results announcement for the period holding company, SepHold can report on Dangote Cement South Africa's, namely SepCem's, performance.

Of after-tax profit, R15.3-million will be included in SepHold’s results for the period ending March 31, 2025. This is up from R15.1-million included in its results at the end of December 2023.

MÉTIER UPDATE
Concrete supplier Métier, meanwhile, was impacted by deteriorating economic conditions and ongoing challenges in the construction sector, resulting in lower sales volumes for the 11 months ended February 28, in comparison to the prior financial year.

However, it still managed to achieve an increase in Ebitda based on management’s unaudited accounts. This performance improvement was primarily driven by cost-saving measures and higher selling prices, which outpaced inflation.

In terms of its debt management, Métier uses various vehicle and property finance facilities to fund its fleet and expansion projects. The current use stands at R125-million, from R200-million that is available, in addition to an overdraft facility of R40-million.

The company's net debt position at the end of February 2025 was R75-million, SepCem said.

As a leading indicator for construction activity, data on building plans passed continues to indicate constrained demand for building materials.

The start of certain government infrastructure projects has been observed, and these are expected to contribute to the growth of the construction sector.

“Given the current economic conditions, a defensive approach is necessary, with the flexibility to respond to short-term opportunities as they arise,” SepCem said.