Sephaku posts net profit growth, but says cement market remains constrained
Building materials company Sephaku Holdings has posted a net profit after tax of R26.7-million for the six months ended September 30, building on the net profit after tax of R17.8-million it posted in the prior comparable six months.
The group, comprising of Métier Mixed Concrete and Dangote Cement, or SepCem, says basic earnings a share increased to 10.51c, compared with a basic profit a share of 6.98c in the six months ended September 30, 2021.
CEO Neil Crafford-Lazarus says Métier performed exceptionally well, despite the economic headwinds of increasing input costs and weak demand, growing its earnings before interest, taxes, depreciation and amortisation by 33% and net profit by 47%.
However, SepCem has been suffering from decreased demand for building materials for close to a year. The company’s market consists mostly of retail customers who buy bagged cement from merchants.
The subsidiary’s sales revenue declined to R1.16-billion, compared with R1.19-billion in the prior comparable period.
The group considers the decrease as a normalisation of demand following a spike experienced at the height of Covid-19.
The interest rate increase cycle from the second half of the 2021 calendar year to date and price increases in essential goods have significantly contributed to the decrease in retail demand.
SepCem remains focused on increasing volumes and pricing in all its markets, Crafford-Lazarus affirms.
SepHold has been focused on strengthening its balance sheet and enhancing profitability by pursuing innovative sales strategies and improving cost efficiencies.
The group remains confident in its ability to survive the current constrained trading environment.
SepHold will publish its full results on November 16.
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