Ppc Ltd

It is a pleasure to share PPC's progress at the halfway point of our FY26. Results to date reflect not only continued progress, but also building on the foundations cemented last year, driving sustainable growth and operational improvement. I want to extend a warm welcome to all of our investors. our board, employees, and members of the media, as well as other stakeholders who have joined us today. Your ongoing support and confidence in PPC remain critical as we advance our turnaround journey. Brenda Berlin, our CFO, and I We share the first half FY26 financial results, key highlights of the year, and progress on our strategy implementation. I will start with the business highlight, followed by Brenda's review of the financials. Then I will return for the business review and outlook. We will have time for your questions at the end of the presentation. Last year, we presented a new direction for PPC. A fundamental shift in the group's strategy, culture, and focus areas. Steady and consistently, we have been rebuilding PPC. FY25 marked the beginning of this pivotal chapter for PPC, in which we implemented structural improvements and delivered a strong recovery in our financial performance. This strong momentum has continued into FY26. Central to this transformation is our turnaround strategy, Awaken the Giant. It is ambitious by design and grounded in the confidence that our success would come from internal drivers, regardless of macroeconomic or competitive pressures. By unlocking internal value, and sharpening our competitiveness, we have laid the foundations for growth and sustainable value creation, which is reflected in the numbers over the last 18 months. I believe our message might have been difficult to grab at first. but we believe it has led to a better understanding of our industry and business drivers. Clarity matters to both understand what is driving our current results, but also the PPC potential. PPC was struggling for relevance and stuck in a negative and confusing narrative. This remained to some extent in the sector today. Our results are becoming a reference point in the sector as a consequence of our focus on profitability and value to shareholders. We got off to a strong start in FY25. And now in the first month, of FY26, we continue to deliver ahead of our FY25-FY30 strategic plan. This progress is evident in profitability, margin and cash flow generation. It is also clear in the significant increase in return on invested capital. reflecting a clear shift towards shareholder return and growth. Importantly, the quality of our earnings. This means that our performance is underpinned by solid fundamentals, sustainable margins, and prudent capital allocation. These guarantees that the growth is achieved responsibly and maintained over the long term. This is PPC today. Delivering ahead of plan with quality earnings and definitely more to come. Let me make a moment to highlight what truly sets PPC apart in our markets. Why is PPC delivering the best in sector results? From the beginning, we stated that our focus was on the quality of revenue, ensuring margins that they are both leading and sustainable. A purely revenue-driven approach might deliver short-term gains, but in a competitive context, it becomes a race to the bottom that erodes margins, value, and risks the sustainability of the sector. Instead, we leverage our competitive advantages to deliver value to customers through high-quality products rather than only competing on price. we can also leverage our unique footprint, capacity availability, and asset flexibility to allow access to key regions and markets. On top of this advantage, our focus has been on optimizing our production and distribution models. This enables us to plan and realize more effective contribution margins, ensuring that every sale brings the most value. Continued capital investment in our assets is another clear differentiator, one that sets us apart now and will have an even greater impact in the future. In a competitive market, we know that technology, asset age, and maintenance are critical for margin enhancement. We continue to invest in and maintain our assets to enhance capacity and efficiency. Well maintained assets and the newest technology position us strongly for growth and further competitive advantage. When it comes to product offering, I want to address an important aspect of our business related to our competitive position in our markets. Firstly, PPC operates in all cement segments across most regions. This allows us to stand out in the marketplace and attract a full range of customers. We are a premium brand because we are a premium quality. Our premium quality is matched by our ability to scale, guaranteeing supply and consistency. to meet the diverse needs of our customers across all segments. Finally, our management team brings over a hundred years of combined cement industry experience, both locally and internationally. This depth of expertise in our first and second line of management allow us to execute effectively on our strategy. Looking at the results for the sixth month ended in September 2025. You can clearly see the positive impact of the turnaround in all key metrics. When we launched the Awaken the Giant strategy, we set out clear metrics to define sustainable success and unlock future growth. Those were EBITDA, EBITDA margin, free cash flow, and ROIC. The combination of these indicators determines quality earnings and shareholders' returns. We keep progressing in all of them. EBITDA has grown 24% to 983 million runs. EBITDA margin expanded by 2.6 percentage point to 18.3%. Free cash flow from operations surged 32%. to 661 million rands. Record dividends declared for Zimbabwe, reaching 20 million US dollars, from 4 million US dollars last period. And lastly, ROIC improved significantly, to 13.4%, from 7.1%, last period. What is driving these results? It's the cumulative effect of multiple initiatives, building on the momentum established over the past 18 months. These continuous improvement efforts are already delivering and, importantly, are expected to have an even greater impact going forward. the growth in the first half result is especially not worthy, because it was largely driven by our South African cement business, which expanded EBITDA by over 30%, with an EBITDA margin of 17.5%. In Zimbabwe, a very high demand boosted volumes, revenues and EBITDA. However, the planned kiln maintenance shutdown in Q1 increased our reliance on imported clinker, which temporarily impacted our margins. Overall, the business generated record cash flows, driving higher dividends. In summary, We deliver quality earnings growth, strong cash generation, and improved returns. I will hand over to Brenda now to cover the financial review. After that, I will deal with the business review and outlook.

Thank you, Mateusz, and good morning, ladies and gentlemen. Mateus has already touched on some of the key metrics, but as usual, I will start with re-emphasizing some of the key features of the consolidated group, followed by some more detail on the SA and Botswana group, and then Zimbabwe. I will then close on capital allocation, capital expenditure, and returns to shareholders. Moving to the consolidated group key features. Group revenue increased by 6.2% to R5.4 billion. I will go into a little bit more detailed data as to the split of this increase across the SM Botswana Cement, Materials and Zimbabwe. The increase in revenue combined with continued cost control resulted in the expansion of the EBITDA margin by 2.6 percentage points to 18.3%. The increase in EBITDA by 23.5% to $983 million is also reflected in the 32% increase in adjusted headline earnings per share. The pro-forma adjustment relates to adding back the unrealised foreign exchange losses on hedging instruments taken out to de-risk PPC's balance sheet from RAND weakness when constructing RK3. The group continued investing in this equipment and spent 225 million on capex during the six months, almost all of which was maintenance expenditure. No expenditure was capitalised for RK3, but there were advance payments totaling 317 million rand in the period which are reflected in working capital. Adding back the R317 million paid for RK3, net cash inflows from operations increased significantly from R500 million in the comparable period to R661 million in the current period, an increase of some 32%. The heroic of the group expanded by 6.3 percentage points to 13.4%, which is well ahead of the plan. Before going into the income statements of the respective businesses, this slide just sets out some key points to contextualise the results. The SA operations had a strong performance, with EBITDA increasing by 36%. The Zimbabwean operations had an extended planned shutdown of a kiln in Q1 of the current period. Mateusz will go into more detail on these two points in the business review. Notwithstanding the Q1 shutdown, PPC's Zimbabwe generated strong cash flows and declared $20 million in dividends during the six months. This compares to $4 million in the prior period. As mentioned already, we paid $317 million in advance payments for RK3. The unrealised foreign exchange losses that are adjusted for in the pro forma HEPs and EPS amounts to $54 million after tax. The SA and Botswana group ended the period at a gearing ratio of net debt to EBITDA of 0.1 times, well below the target range of 1.3 to 1.5 times. This slide sets out the key line items on the consolidated group income statement. Before going through the numbers, an overall point is that it is worth noting how clear and simple the income statement is now. it is significantly less confusing to go from EBITDA to profit after tax. A few years ago, there were no less than nine line items below trading profit compared to the current four. It is much easier to manage and understand a clean income statement. As mentioned, I'll cover both the SM Botswana Group and Zimbabwe in a bit at the EBITDA level. The absolute increase in EBITDA of $187 million is reflected in the increase in trading profit as depreciation was almost flat over the two periods. Moving on to some relevant items below the trading profit line. The fair value in foreign exchange losses in the current period include 74 billion pre-tax unrealised foreign exchange losses that I've already talked about regarding the pro forma HEPSA debt adjustments, 34 billion rand in realised FX losses on the advance payments made for RK3, and 15 million loss on translation of foreign currency denominated monetary items for PPC Zimbabwe and PPC Botswana. Net finance costs reduced by 15 million Rand. Finance costs themselves reduced as we had both lower borrowings and lower interest rates compared to the prior period. Investment income or interest received also reduced due to lower average cash balances. The cash proceeds received on the sale of the Rwandan operation were held for almost the entire period before a special dividend was paid out in September 2024. Closing this slide with the effective cash tax rate of 33%. This is in line with the prior period and previous guidance. The single biggest item in the current period that increased the effective rate from the statutory rate of 27% is withholding taxes paid on dividends declared by PPC Zimbabwe. This is the final slide of the consolidated group. As usual, it depicts the contribution to both revenue and EBITDA by the SA and Botswana group and PPC Zimbabwe, respectively. The numbers inside the wheel depict the current half-year percentages with the prior period shown on the outside. As can be seen, the relative contribution from the SA and Bots group at the revenue level declined by 5% from 70% to 65% and increased by 6% at the EBITDA level. I will now move on to give an overview of the SA and Botswana Group, followed by Zimbabwe. The SA and Botswana Group is an aggregation of three components, with the main driver being SA and Botswana Cement. The materials businesses comprise ReadyMix, Ash and Aggregates, with PPC Limited and other being essentially a listed company overhead. Materials will go deeper in the business review, so I will just touch on a few key features on this slide. Regarding South African Botswana cement, strong growth in Q2 followed a weather-disrupted Q1. The focus remained on contribution margin and cost efficiencies, resulting in a very sound 31% EBITDA growth. The materials segment shows a significant but not material decline in EBITDA. The EBITDA for the aggregates and ready mix businesses were more or less flat compared to the prior period, with the ash business responsible for the overall decline. Volumes in the ash business declined by 42% compared to the prior period. Dealing with PPC Limited and other, in the prior period, all of the centralised group services costs were in the segment. As of 1 October 2024, all group services staff were transferred to SA Cement, being the main reason for the improvement in cost in the segment. On the next slide, I will deal with the cash flow bridge for the ESSA and BOTS group, but the gearing being net debt to EBITDA remains very low at 0.1 times. To remind you, it is expected to peak for one year in FY27 when the construction of RK3 is largely completed. In this peak funding year, we expect to be below two times when the required net debt to EBITDA covenant is 2.5 times. Dealing now with the SA and Botswana Group cash flow, what is shown on the slide is the waterfall for the current period up to, in the first instance, net cash generated by the core business of R256 million. Dealing with this section first, what you can see is strong operating cash flow before working capital changes of R584 billion. A small working capital release of R11 million, bearing in mind the R410 million reduction in working capital for the year ended 31 March 2025. Taxes, capex and other core operational business activities are then depicted to arrive at the net cash generated. What is shown after net cash generated are non-operational items, with the material items being essentially the investment in RK3 is shown at $351 million, being both the advance payments and realized forex losses. Dividends received from PPC Zimbabwe of $211 million, versus PPC share of the US dollars $12 million paid in the current period, with a further $8 million being declared but only paid subsequent to 30 September. Distributions to shareholders in the current period of $274 million, being the $0.176 per share declared in June 2025. Overall, net cash decreased by R193 million in the current period, leaving gross cash at R543 million at 30 September 2035. Drawn long-term facilities remain at R500 million plus R2 million in accrued interest, which leaves net cash at R41 million at half-year end. The reason for the small gearing ratio on the previous slide is that capitalised leases have to be deducted as debt for the gearing covenant. Set out on this slide are the key metrics for Zimbabwe. We keep this slide in US dollars so that you can see the numbers in PPC Zimbabwe's functional currency. There was a strong increase in sales revenue of some 25%, which is in line with volume increases as demand remained high. Q1 margins were affected by Benito in particular during the planned shutdown, but exceeded the prior period margin in Q2. CapEx increased by $2.3 million due to the extended Q1 shutdown, compared to a much shorter stock in the comparable period. Record dividends declared of $20 million. As I mentioned on the previous slide, $12 million was actually paid in the current period, with PPC share of the remaining eight received in November 2025. Repatriation of dividends remains consistent. Cash balances at the end of the period were strong at $14.4 million, 96% of which is in hard currencies. We are progressing steadily on the conditions precedent to the sale of the Arlington property transaction. Moving on to the last slide on capital allocation now. On the left-hand side of the slide, you can see the actual capex spend for the group over the last two years. The forecast spend for FY26 is also shown. The budgeted £450 million for the group in FY26 includes some catch-up on value-accretive and reprioritised projects deferred from FY25. This increase on the actual FY25 spend is almost all attributable to the SA and Bolts group. The spend on RK3 has commenced. The previous forecast spend for this FY26 was £1.18 billion, and as you can see, this has reduced to £920 million due to timing adjustments. Return on investor capital, or ROIC, remains a key focus, and all expansion capital has to meet stringent criteria. The ROIC for H1FY26 is set out on the top right and has consistently improved since 30 September 2024, when it was 7.1% and 10.6% at 31 March 2025. We expect ROIC to weaken in the short term, being H2 FY26 and FY27, as capital is spent on RK3 with no associated return. Thank you. I will now hand you back to Mateusz for the business review.

Thank you, Brenda. Before we dive into the business review of the period, I want to take a moment to reflect on what has enabled us to deliver these results. From the very beginning, our top priority was to build a strong foundation for PPC. This meant a fundamental change to the core of the organization. I was very frank about the scale and gaps we found. From the organizational culture to governance, controls, management information, people skills, and importantly, leadership. From the top to the various levels in the company. Difficult decisions were necessary and were indeed taken. It was the only way to turn around PPC. In my view of leadership, bridging the gap between words and actions is essential. Authenticity and accountability are not buzzwords. They underpin trust. PPC's leadership team is committed to transparency and delivery. In this context, we act quickly and decisively. We address long-standing issues, brought in critical expertise, strengthened processes and controls, and realign priorities to ensure a focus where it matters most. These actions had an immediate impact in all areas of the organization and meaningfully improved the financials. While this process is far from being completed, we have made good progress. This year, we conducted a pulse survey on employee engagement. The survey was designed to capture the voice of employees, providing a clear understanding on how the turnaround is being experienced across the organization. In a context of change, it was vital to understand the general sentiment. Participation was very high, at 93%, and feedback was extremely positive regarding the need for the turnaround, belief in the strategy, and confidence in leadership. This alignment between management and our teams ensures the sustainability of the turnaround process. On the back of the positive trajectory established in the last financial year, in FY26, we needed to deliver consistent and sustainable progress across the business. I am pleased to report that our group results reflect this. As I mentioned before, the key highlights of the current results is the sustained growth trajectory with expansion across all the key financial indicators. In the first half of FY26, the main driver was the solid performance of our South African cement business. The second leg of our performance was in Zimbabwe, with EBITDA increasing and EBITDA margin recovering strongly in Q2. As we presented before, the Awaken the Giant turnaround is anchored by four key pillars and eight supporting commandments. We track performance of these initiatives, both at operational level and at ESCO level, to embed these priorities into our company D&I. While we have made progress across all four areas there is still room for improvement. Two areas have developed faster and continue to gain traction. Regarding the less is more pillar, simplification and standardization are delivering value. And a new wave of initiatives will bring additional gains as we further optimize our production and sales mix. The cost mindset pillar has had a radical impact from the beginning, with strict control over non-core expenses, overheads reduction, and supply contracts renegotiation. Importantly, this cost discipline is expanding and will have a compound effect in the periods ahead. The operational turnaround even with a well-maintained asset base, takes more time. We are progressing and taking firm steps. We are now in the first year of our three years planned performance improvement plan, which has established benchmark metrics, clear targets, and robust actions plans. The supply chain area is more advanced and continues to drive results. The in-source new logistics area continues to deliver material savings. The centralization of procurement last year, coupled with streamlined processes, is transforming procurement from a reactive function to a proactive driver of cost saving and working capital efficiency. On the commercial pillar, as I mentioned before, the progress will go hand in hand with our competitiveness evolution. As our competitiveness improves, we are increasingly able to roll out our commercial strategy. We have started to combine higher revenue with growing margins. Market share at all costs has never and will never be our strategy. The giant is moving, powered by productivity and efficiency gains, disciplined product mix, with savings being realized throughout our cost base. Let me take you through the results per segment and introduce the operational metrics driving our business performance. Turning now to the South African cement business that delivered remarkable positive numbers. In the context of a low-growth market and intense competition, our performance marks a material improvement driven by consistent execution and clear focus. Evita growth of 31% period-on-period and evident margin expansion to 17.5% are particularly not worthy. When it comes to revenue, we must clearly separate the two quarters of the period. In Q1, the abnormal and persistent rainfall affected both sales and production in our Slurry and Duelbond plants. In the second quarter, we saw a strong rebound of our sales across key regions, such as Pumalanga, Limpopo and the Worcester Cape. Overall, cement sales grew by 2% due to a strong 10% increase in the second quarter. This growth not only reflects pockets of higher demand, but also demonstrates our improved competitive position and ability to recover market share profitably. Our operational discipline is evident in the 5% reduction in cash costs per ton. To secure contribution margin per ton and gross margin growth, the cost management in place was critical and marked by tight control of variable and fixed costs, outperforming inflation, significant logistics savings after insourcing the function, and continued overhead savings. Following the quick wins achieved in outbound logistics with a run per ton per kilometer cost reduction of 14% in FY25, In H1-FY26, we delivered a further reduction of 13% comparing to the previous period. It is not worthy that we have more logistic initiatives planned to benefit FY27. On the operational front, we have seen real progress, driving both lower variable costs and carbon emissions, including Higher production levels of clinker and cement in our integrated plants. Lower clinker incorporation. And a three percentage point improvement in the KIEMS OEE. In short, a very positive performance and trajectory in South Africa. Turning to our South African material business. Overall revenue declined by 7% to 494 million rands. EBITDA was 14 million rands down for 28 million rands in the same period last year. The reduction in EBITDA was driven by the ash segment. The ash segment with volumes down by 42% period on period continues being impacted by some of our customers moving to low-quality, unclassified ash. In ready mix, period on period, volumes fell by 8%, mainly due to adverse weather conditions in Q1. We are seeing projects ramping up towards the end of the second quarter. Aggregates, on the other hand, delivered positively, with volumes up 11% period on period. However, the cost improvements were offset by an increase in a non-cash rehabilitation provision, leaving EBITDA flat compared to the prior period. Turning to Zimbabwe. In the first half of the year, we continued to deliver EBITDA growth and record level of cash generation. underscoring the strength of our business and the potential of the market. Revenue for the first half surged by 25% to 106 million US dollars, reflecting a robust market demand. The demand for cement is high, and PPC is uniquely positioned to supply into this growing market. With our premium brand, national footprint, and the full range of products, we are able to deliver consistently to our growing customer base. EBITDA grew by 13.6% to US$25 million, with an EBITDA margin of 23.6%. EBITDA, an EBITDA margin, strengthened considerably in Q2 and has remained strong. The previous year assessment of root causes of the operational inefficiency and unplanned stoppages led to a target three-year plan to improve equipment reliability at our Colimbon plant. These root causes do not need to be addressed only with CAPEX, but with planned maintenance and the right expertise. To this point, PPC Zimbabwe has entered into a technical agreement with Xenoma overseas to strengthen our local capabilities. The Q1 Colimboan plan stoppage was the commencement of this three years plan. This stoppage, in a context of a very high demand, lead to a higher consumption of imported clinker and consequently higher cash cost per ton of cement. Since then, operations have normalized and we are operating at our expected margins. The recent introduction of slag-based product is also already having a positive impact. The reduction of clinker content by 5% to 10%, depending on the product, supports cost efficiency, brings additional cement production capacity, and reduces CO2 emissions. In summary, Zimbabwe remains a strong contributor to the group, and we are well positioned to continue benefiting from a high-demand context. Again, I will share my confidence in our turnaround process. This early delivery in FY25 combined with compound momentum in H1 FY26 has only strengthened that confidence. As we look ahead of FY26, our message remains unchanged. We started this year with a strong foundation, and we are determined to build on that success. The Awaken the Giant strategy remains solid. In South Africa, relative to the prior period, we expect EBITDA to maintain a growth trajectory in the second half of FY26. This is particularly significant, given that we will compare against an outstanding H2 in FY25, in which we saw over 80% growth period on period. Our commitment to cost discipline and quality revenue growth will sustain this positive trend. In Zimbabwe, we anticipate another record year. with EBITDA expected to surpass last year's high, and additional dividends are projected in the second half of FY26. As I mentioned, the market is very active and we are focused on capturing this demand. Importantly, certain key projects will also go live in FY26. and further progress will be made on our strategic initiatives. These investments are designed to unlock new value, drive efficiency, and position us for both short-term gains and sustainable growth well into the future. As Brenda highlighted, the discipline in capital allocation will remain, ensuring a solid balance sheet and financial resilience. In summary, both group EBITDA and EBITDA margins are expected to increase in FY26 from FY25 levels. The giant is not just awake. It's moving with a clear direction. As I mentioned, we are also getting real traction on strategic projects. These are no longer just plans for the future. They are becoming the reality of a more efficient, environmental-friendly and sustainable PPC. Alongside our turnaround initiatives, we have been diligently implementing structural projects that are reshaping PPC. Let me start with our new solar project, which perfectly aligns returns and environmental sustainability. In South Africa, we have rolled out the installation of solar facilities at our two main plants, Dwalbon and Slurry. Each site has a peak capacity of 10 megawatts. Both plants are already generating electricity, and once fully operational, This solar installation will supply approximately 30% of each plant's annual electricity needs. The financial impact in FY27 will be substantial. In Zimbabwe, the solar project is advancing with our partners to install a 20 MW solar plant with battery backup at our Colimbon plant. Since, currently after logistics, electricity is our main cost there, the impact is expected to be significant. This project is planned to go live in FY28, as defined in our strategic plan and will be a step change for PPC. This investment will not only improve our cost base, and strengthen our energy security, but also demonstrate our commitment to environmentally sustainable operations. In the middle section, we have the new West Arcade Plant. I am pleased to report an update on the Arcade 3 project, a game changer for PPC and the South African cement industry. The project remains on schedule and within the approved budget. We have made progress in several fronts. Engineering and design are nearly complete. Manufacturing of equipment has started with the first delivery already on site and civil works are advancing as planned. Importantly, our project governance Cost control and reporting structures remain robust and effective. Overall, the RK3 project is progressing and we remain confident in our ability to deliver this critical investment on time and within budget. Turning to the last image, the cancer and clay testing. We are proud to have conducted industrial trials of CalSanClean in the Western Cape. CalSanClean, a new extender, could be a true innovation in the cement space in Southern Africa. As we align our carbon emission targets with our business performance targets, this innovative technology is a sustainable cementitious product alternative. potentially at a considerably lower cement production cost. We are in early stages of the trial, but we are excited about its potential. This slide has not changed since we presented it in our last Capital Market Day. The plan and goals for FY30 remain in place. This image tells a simple, but powerful story. We set out a clear and ambitious plan, and we are already ahead. We started by rebuilding PPC's foundations and driving significant improvement, step by step. The Awaken the Giant strategy is our guide, and the results are visible. Stronger EBITDA and EBITDA margin. Rising ROIC. And consistent growth in cash generation. We are delivering. And as we look ahead, our plan remains unchanged. We will consolidate the gains in FY26 and FY27. to set the stage for the next step change in FY28 with the RK3 plant fully operational. Our targets are ambitious and achievable. Sustainable evident margins above 21% and ROIC well ahead of our cost of capital by FY28. This is not about short-term wins or changing direction with every headwind. It's about building for the long term, staying the course, and proving that we do what we say. The foundations are now strong, the momentum is real, and we have a track record of deliveries. The present and future of PPC are exciting, not just because of the results we have delivered these past 18 months, but because we have proven what is possible when an aligned and experienced team execute the right strategy with discipline and a clear understanding of our business. Our strategy remains to continue making PPC a stronger and more competitive business. On that, consistently delivering improved financial performance and generating real cash back profits. This journey has already begun and the results are concrete and tangible. Yet, as proud as I am of these achievements, the future holds even more exciting chapters for PPC. Thank you for your support and for being part of this Awaken the Giant journey. Now we will have time for some Q&A.

Good morning. We have a number of questions here and I'll just take them in order as they've come in. Okay, that's good. The first three questions are all from a titanium capital, Charles Bowles. On slide five, you talk about the importance of a strong asset base. Is there an issue in Zimbabwe with the age slash efficiency of the plant? Is PPC at risk if Dangote proceeds to build capacity in Zim, as speculated in the press?

Okay, first of all, good morning, Charles. Thank you very much for your question. I don't know exactly when you made that question, but probably... Let's address the main things about your question about Zimbabwe. Yes, of course, we are updating the technology in Zimbabwe and we are improving our maintenance there. That is why we commented today that we have put in place a three-year plan that started this year with the first shutdown in Q1 of FY26 in our Colimbon plant. The second thing that we are doing in Zimbabwe, as you have seen in the presentation, is we are starting our solar project, which is going to bring a significant savings and also is going to improve significantly our C2 emissions. The first thing that we commented today is that we have signed an agreement with Sinoma Overseas recently to be able to have the support of the biggest and most important engineering cement company in the world to upskill our talent in Zimbabwe to make all this process faster and more sustainable. On the other hand, please remember that we have the newest plant in Zimbabwe in Harare. And overall, we have good assets there. But yes, it's very important to update and to well maintain our assets to run there. In the case of Dangote, allow me to say this respectfully. I think it's very important to differentiate between announcement and reality. We all read that announcement when Aliko Dangote visited the president in Zimbabwe last week. We don't have any indication that that project is going to materialize anytime soon. We monitor all those news, so we don't see that something that is at least for the moment real. I think I would take advantage of this question also to comment something, also in the direction of trying to differentiate between announcement and reality. It's probably that in the following weeks we are going to see an important announcement in the South African cement industry with probably the arrival or the change in some shareholders of one of the cement companies. I'm sure that that situation when it's going to be announced is going to come with a lot of announcement of big investment, et cetera. I think it's very important for investors nowadays to be able to clearly differentiate between what people say and what people really do. This will help, I think, investors to take the right investment decisions.

Thank you.

The second one.

Thank you. The second question, also from Charles. We understand there is a dispute with CashBuild. Could you give us some understanding what this dispute relates to?

Well, just I'm not aware of any dispute with cash bills. Honestly, cash bill is an important customer for us. We have a productive working relationship with them. Yes, what is true is that cash bill approach, generally speaking, is mostly about price. They are looking for the lowest price, cement price that they can get. And for us, as is very clear, our driver is contribution margin. We are not in the game of dropping prices to protect volumes or to gain market share like many other cement producers do. in South Africa, so we don't have any dispute as far as I know with Cashville. We have good working relationship with them and Cashville and any other customer have the right to decide if they would like to buy our product or they prefer to buy product for another cement company. We believe that PPC put in place the best value proposition, which is not only price but also quality and services. So this is our proposal. No, I'm not aware of any dispute with cash that we have.

Thanks, Matthias. Last question from Charles. Acrimat has increased output from the Lafarge facilities. There is also more capacity coming online in Mozambique, plus growing imports. Do you expect this will put cement pricing under pressure going forward?

Well, it's a strange question because... that AFRIMAT is bringing more capacity to the market. That is the question.

From the Lafarge facilities.

Because this is the public information, no? AFRIMAT had two major breakdowns the past six months in both skins. Particularly one of them, a very serious one, that prevented them for supplying cement to the market. Actually there was a kind of shortage of cement at the moment and some AfriMat customers were looking for other supply sources. And AfriMat also needed to go to buy clinker that was also not easy for them because there is not a lot of extra capacity clinker in the market. So I'm not sure what do you mean by AfriMat increasing output. What we have read and listened from AfriMat is that AfriMat is saying that it's going to increase their presence in the 32.5 market in the inland region, meaning Autén, Pumalanga, and Limpopo, which is important to clarify that that is a market that is the Red Ocean of the Red Ocean in the country. It is the low-strength market where operates all the blenders, all the importers, all the integrated plants. That announcement from AFRIMAT probably indicates that, yeah, there is going to be an increased price pressure on that particular segment, which is a segment that for us is not very relevant. We don't, that is just a small percentage of our sales. It's not a market that for us is relevant. So probably if AFRISAM tried to get some market share in that Red Ocean market, we might see some price pressure, but in that particular market, the low strength 32.5 market in the inland region.

Thank you. Moving on to Marco Russ from ORG Invest. Given the material USD exposure from RK3 and your current FEC position, what is management's outlook for the ZAR USD over the next 12 to 24 months, and how do you plan to manage or hedge your ongoing dollar exposure going forward? And, Brenda, before you answer that question, there is a second question which is related from Clifford Farai, which is also asking what are the expected future exchange losses if the RAND to the USD remains as is, and what was the hedge price on the USD, and what considerations were taken to come up with the hedge option? So perhaps you can answer all of those, I think, at the same time. Thanks.

Of course. So just to break it up into maybe bite-sized chunks, so first of all, we took a decision – to hedge the full U.S. dollar exposure for RK3. We averaged at a rate at 1850. It was the rate when the board contemplated the business case. It was based on that exchange rate for the CapEx. So the full U.S. dollar exposure is hedged. On the unrealized losses, it's a question of timing. So we've got unrealized losses now as we mark to market of the hedges. Had we raised the creditor, there would have been matching gains. So what's going to happen in our income statement over the next 18 months is there will be a match. There will just be timing differences. So overall, gains on the creditors will offset losses on the hedge. In terms of hedging instruments, I think that was the last one. We looked at a range, a big range, and ultimately decided on sort of quite clean, simple forward exchange contracts taken out of the period in which we expect to spend the capex.

Thank you. I have a few questions here from Warren Riley of Battelier Capital. I'm going to take them one at a time, just I think it's easier to ask. Can you talk to Outlook for fixed capital investment in South Africa? Have you begun to see any larger projects coming to tender, and is this majority private sector investment?

Paulo can take this one.

Hello, good morning, and thank you for the question. Well, At the moment, we are still seeing fixed gross capital formation at the depressed level, but on a more positive note, we see some movement on those tenders process. We know that those tenders process are long, given that they are public entities. In terms of the dynamics and the movement, it's positive. In terms of works on the ground, no, we haven't still started seeing all of those projects coming to a start.

Thanks, Paolo. The second question from Warren is, what are the SA Botswana cement volumes growing at in Q3 to date?

Sorry, we don't share that information. Yes.

Sorry, Warren. Well, can't give you an update on that. The third question is, can you provide the exit run rate for Zimbabwe EBITDA margin in Q2? And can this be sustained into the second half of FY26? And then I think combined, because I also talked to Zimbabwe, what impact is the 30% import surcharge having on demand and domestic pricing?

The run rate for EBITDA margins in the second half of FY26, that is the question. Is it?

Yes, basically.

We spent a range between 25% to 30% EBITDA margin there, and definitely could be sustained. I mean, this year probably has been, not probably, as we share, has been impacted because when we were in the long shutdown of our Kin and Colin Bond, was when the demand started to surge. So we needed to import more clinker, and that is why that EBITDA growth, cash flow growth, dividend growth, but EBITDA margin was temporarily impacted. So the run rate for the second half would be an EBITDA margin between 25% to 30% unsustainable.

Thank you. The other question, is that what the impact of the 30% import surcharge?

So that's irrespective of... Yeah, I mean, it has been important, but I mean, not because we have particularly gained a lot of market share, because our position there is very solid, and actually we sell everything we produce. So I think it's important in terms of giving the industry the opportunity the the support you expect from government to make big big investment as you all know we are an capital intensive industry which requires big investment and this kind of of of decision from government in zimbabwe gives the industry the encouragement to invest in the long term that is important thanks matthias and actually there are no further questions okay thank you very much have a nice day