PPC Ltd (PPC) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us, and welcome to PPC's annual results presentation for the 12 months ended March 31, 2021. My name is Kwame Antwi, and I'll be your MC for today's event. As usual, we are hosted by Roland Wijnen, who is the CEO of the group; and he is joined by his executive team. The format of the presentation is as follows. Roland and the team will unpack the results for about half an hour. Thereafter, we will open the floor for question and answers. [Operator Instructions] Without taking too much of your time, let me hand over to Roland. Roland, over to you.

Good morning, dear viewers. We do that what is necessary nowadays before you start to do anything anywhere. Pleasure to welcome you and take you through the results together with my colleagues. I've got Njombo, our MD for South Africa, Botswana; Mokate, our MD for International; and Brenda, our CFO. After I'll give you a short introduction, I will hand over to Brenda, who will unpack the results in more detail. After that, she will hand over back to me to give a short introduction on the operational side, which will then be dealt with in greater detail by Njombo, followed by Mokate. And after that, I have an opportunity to summarize and close out. Of course, before we talk about financials, we talk about our people because really, the results that we're seeing today is a testimony to how team PPC has come together during the 12 months of our financial year '21, which started off with the first signs of COVID-19. It's almost hard to say that here we are a year later and faced in South Africa with a very strong third wave. So I do want to spend a little bit of time on the statistics. What you see on the screen are the statistics as of the end of March 2021, where we had 2,936 tests done throughout the company. That translates to pretty much one per each of our employees. Obviously, some of our employees got tested multiple times compared to others, so it's not exactly like that, but it gives you an idea of the magnitude. Unfortunately, with the third wave, we have also seen these numbers rising. So the statistics that I got last week showed that we already had close to 3,800 tests conducted. But unfortunately, it also showed that we had a second fatality due to COVID-19 among our employees. And as we are here today, I do think a moment where we think about those that were affected seriously. Luckily, a lot of us come through COVID-19, including myself, with much milder symptoms. And here, you see that we had 412 people recovered from the disease by the end of March. That number has grown to over 480. Another positive news is that we have been able to start vaccination programs, mainly outside of South Africa. The number you see here, 169 vaccines administered refer mainly to Rwanda. As we stand today, we've got more than 300 of our employees vaccinated. As also in Zimbabwe, the majority of our employees had the opportunity to get a vaccine. Vaccination is key. And we were working closely together with the Minerals Council under the leadership of Roger Baxter as well as with various local regulators to make our sites available for large-scale vaccination programs, as needed. And hopefully, they will come as soon as possible. Broader than just COVID-19, we are, of course, interested in the well-being of our employees. And you see on the top end of this screen that our lost time injury frequency rate, which is an international measure of the amount of injuries for which people couldn't go back to work for 1 or more shifts, has been rising in the last financial year, and we are concerned about that. We do believe that there has been a component in there also related to the uncertainty caused by COVID-19 as people work under much different circumstances as they used to in the past. We also, since many years, had 1 fatality in Rwanda outside of our direct environment. In a water treatment plant, close to our plant, we had 1 contractor that unfortunately got executed whilst doing cleaning exercises. For us, making sure that people go home every day in the same health as what they came in the morning is imperative. And we have doubled down on our efforts to make sure that throughout the business, there is visible felt leadership when it comes to health and safety. Another topic that is of growing importance and has always been important to us at PPC is to look at our impact on climate change, mainly through the greenhouse gas emissions that come during the production of cement. The 2 main drivers of that are the type of fuel that we're using in our cement plants, where we're looking at replacing coal by alternative fuels such as waste streams, and the second one comes from the burning process of limestone into clinker. Whilst it is pleasing to see that we've seen an improvement in the amount of CO2 -- or a reduction there with an improvement in the amount of CO2 per tonne of cement, we are still not where we would like to be, and we have a number of projects on stream that I hope to announce to you in the next couple of months that will make leap steps into reducing the footprint that we have. And the last indicator that you see here that we monitor closely is water consumption. As we all know, with climate change come droughts, and there, with the water we consume in the production of our cement is a key indicator that we look at. We are working in line with the guidance given by the TCFD, which is the Task Force on Climate-Related Financial Disclosures, an internationally recognized method of looking at the impact of climate change on our business. And as we work through the results together with the Board, we expect that in the next -- the next time we speak, we'll have more details on what this means for PPC. Turning into the backdrop that we had in the financial year '21. Obviously, a challenging backdrop, especially in the first quarter of our financial year, where our sales was heavily impacted by the lockdowns that we saw across all the jurisdictions where we operate. But we also have seen a strong recovery. And as we unpack the numbers, you will see that across all our markets, we have been able to show a growth in the cement volumes. As we've always said, the initial growth in South Africa and the recovery was strongly retail-driven. And as Njombo unpacks more in South Africa, we have seen the expected normalization of the retail sales, and we are continuing to see a slow but steady growth of the infrastructure projects being rolled out by the government. Cement imports remains an issue for us. Not just in South Africa. We've also seen it in other markets. And we'll continue to work with governments across our portfolio to make sure that competition is done on equal footing. For South Africa that could, for example, mean a so-called border adjustment when it comes to CO2 taxation and other measures to make sure that the local industry is not put at a disadvantage to imports. Unstable electricity supply is not only an issue in South Africa. We face that in other jurisdictions as well. And we continue to work closely with all the providers, such as Eskom, to make sure that there is as much as possible planned shutdowns of certain parts of our plants and stable supply of electricity during the hours that we run. Both Njombo and Mokate will touch upon what we are doing around the topic of electricity supply. We're talking about solar projects in our facilities in Zimbabwe as well as in South Africa as well as a growing amount of land that we make available for wind farms. Lastly, the topic of logistics. For us, it is paramount that we have good rail connections in Southern Africa. Both Zimbabwe as well as South Africa is highly dependent on the movement of goods from our production plants to the consumption centers. Unfortunately, this year, we have seen that too many times, we had to rely on road transport because the rail transport was not available. And we are working closely with Transnet to make sure that, that moves in the right direction. And it is this collaboration that I would like to stress between players in the value chain, that is the government, that is Eskom, it is Transnet, and it is companies like ourselves. Because ultimately, only together, we can make sure that there is a strong local manufacturing base that ultimately provides the jobs and the tax generation that the country needs so desperately. Our focus areas obviously have been to protect our employees and all the stakeholders around ourselves from COVID-19 and reducing the risk that virus will spread. We have been able to maintain our production, and I give again a great compliment to all the people that are working on a much more difficult circumstances nowadays than they had seen in the past. We have also seen in our financial results the impact of the many actions that we have taken over the last years. The reorganizations, particularly in South Africa, but also in our international operations have started to bear fruit. These actions were not just implemented last year. These were a series of actions coming in South Africa from the mega plant strategy that we always said will deliver results. And I'm pleased that in this year, you have seen those results coming through in the P&L strongly. That goes hand-in-hand with our cash generation, which has been a focus point for us to make sure that we reduce debt and are maintaining at the same time our assets, so that we can supply the market as needed. A lot has been said already about the capital restructure projects. I would like to highlight 2 points. When I started at PPC in October 2019, in my first interactions, I have made 2 commitments. One of them was to work hard to make the South African balance sheet independent from the balance sheet of the international operations. And with the agreements that we signed at the end of March 2021 that we are currently implementing, we will be able to tell you that we have achieved that once that is all implemented. The second question that I was asked early upon my arrival back in October 2019 is whether PPC requires an additional capital injection from its shareholders. And my answer to that question was, I don't know, but we'll do anything we can to avoid a so-called rights issue to restructure our balance sheet. Where we stand today is that we have been able to convince the South African banks that we don't need this rights issue right now, that the actions that we have agreed, which will lead to deconsolidation of the DRC, which will lead to a cash in from the divestment of noncore businesses, namely PPC Lime and Botswana Aggregates, and a continuous focus on our core business and its cash generation should be sufficient in order to restore our balance sheet. More on that topic you will hear from Brenda as she unpacks the financials. And the reduction of the environmental impact that I addressed slightly earlier will remain a topic for us. How do we position PPC as a low-carbon building material supplier to the customers that we serve across sub-Saharan Africa. I would like to say that the outcomes of financial year 2021 were positive. With the conclusion of the agreements in DRC, we were able to remove a significant debt from our balance sheet. In today's -- or end of March 2021, terminology, ZAR 2.5 billion of debt could be removed. Also, we were able to remove roughly ZAR 300 million out of our cost base on a recurring, sustainable basis. Demonstrated by our CFO, these are not just words from a businessman who normally forgets about the fact that there are headwinds as well that there is inflation as well. This is ZAR 300 million visible and captured in the P&L. In terms of what this means for numbers, which we will unpack after I hand over to Brenda, our group revenue of the continuing operations, which includes South Africa, Botswana, Zimbabwe and Rwanda, has grown by 3% to ZAR 8.9 billion. This growth would be higher if it wasn't for the strong devaluation of the Zimbabwe currency, which you will see later in the presentation of Brenda. Our EBITDA moved up to ZAR 1.6 billion, a significant jump, and you will see country by country what contributed to this increase. I will leave the earnings per share and the headline earnings per share to the specialists on this as this number is highly clouded by a number of accounting topics for which my education is insufficient. An important element in the conversations with our investors has always been Zimbabwe. You've got a strong position in Zimbabwe, but you are unable to extract anything out of Zimbabwe. It is pleasing to know that thanks to the efforts of our Zimbabwean team, there was a remittance of $4.4 million on the bank accounts in South Africa as we are a shareholder in PPC Zimbabwe. And post March 2021, the Board of PPC Zimbabwe has approved an additional dividend of which ZAR 2.6 million has been transferred and has arrived on our bank accounts in South Africa. Our cash flow has recovered tremendously. You will see in the presentation of Brenda that our cash flow is roughly ZAR 1 billion higher than last year. And I think that for us is one of the key measures. EBITDA margin improvements, cash flow improvements and making sure that we have that return on invested capital. Our South African gross debt stands at ZAR 1.9 billion at the end of March 2021. That's a slight improvement from the year before and includes a material payment that we made to settle the DRC, a total of $16.5 million, which is included in the ZAR 1.9 billion. The international gross debt, which is the debt related to Zimbabwe and Rwanda stands at ZAR 0.7 billion, has come down from ZAR 1.1 billion, thanks to the fact that in Zimbabwe we continue -- or the reserve bank continues to honor its commitments to pay down the dollar debt that we have in country. And we have no reason to believe that, that will change in the future. On the capital restructure, we have said a lot a couple of months ago, so I'm not going to repeat that, other than to say thank you to Anthony Ball, who has been material in making this happen, and other to say that we are very pleased that the progress for the implementation is on plan. With that, ladies and gentlemen, I will hand over to Brenda, who will unpack the financials in a bit more detail. Brenda, over to you, please.

Good morning, everybody. And welcome to the financial section of the presentation. I'm going to try and help you go through the income statement and focus a bit on cash and debt, and I'll wrap up with progress on the capital restructuring project. To set the scene for revenue variances, this slide shows a trend of volume movement over the year. As can be seen, the first quarter was significantly impacted by COVID with a hard lockdown in April and continuing impact in May. The second quarter shows the extent of the recovery as the economy opened up and PPC was effectively able to supply the pent-up demand. The second half shows good continued growth over all regions. In particular, the South African inland region performed very well with increases of between 20% and 25% up for the year, which was -- this was offset by coastal and Botswana region to give a net year-on-year growth of 6%. Zimbabwe also demonstrated good growth for the year at 10%. Moving on to revenues. Southern African cement revenue was up 7% year-on-year, slightly ahead of the increase in volumes. Rwanda's revenue increased by 21%, well ahead of its volume increase of 8% due to increases in selling prices, which were effective from July 2020. Excluding Zimbabwe, the continued -- continuing operations of the group increased revenue by 7% overall. The results from Zimbabwe are distorted by both hyperinflation and the 75% weakening in its functional currency against the rand. Underlying revenues in Zimbabwe did increase substantially given the local inflation. However, when translated into rand at a materially weaker exchange rate, it depicts a 13% reduction. After taking Zimbabwe into account, group revenues increased by near 3%. Moving on to EBITDA. EBITDA significantly affected by noncash items, which I'll deal with on the next slide, as well as restructuring and refinancing costs of some ZAR 80 million in the current year. As can be seen, the core cement division delivered strong growth of 41%, mainly due to increased volumes, prices and cost control. Similarly, Rwanda delivered good growth in EBITDA off the back of an 8% increase in volumes and a 6% increase in price. EBITDA for the continuing operations, excluding Zim, increased by 66%. Zimbabwe numbers are again distorted by the exchange rates, but it is worth noting that some 57% of its revenues in hard currency being U.S. dollars. This is important as generation of hard currencies enables the payments of dividends that Roland referred to. After the Zimbabwe impact, EBITDA nonetheless, increased by 16% year-on-year. Right. Moving on to the noncash items. As you can see on this slide, there's a number of them. I'll start with the foreign exchange movements. This relates to in-country foreign exchange gains or losses due to the remeasurement of foreign-denominated balances. Most of this is related to the dollar-denominated debt in both Rwanda and Zimbabwe. Both these entities are able to service their debt from their own cash generation, and there's no recourse to South Africa. Moving down to the put option. You may recall last year, the IFC put option was valued at 0. At that stage, there was a liability of ZAR 251 million, which was then taken through the income statement. In the current year, we remain of the view that the put option is also with the money, and there's no change, therefore, in the liability required. On the financial assets, this relates to the original funds transferred to the RBZ, which are fixed at 1:1 USD, ZWL rate. The net fair value gain on the Zimbabwe financial asset of ZAR 256 million comprises an increase of the intrinsic value of ZAR 152 million and a credit risk fair value gain of ZAR 104 million. In the prior year, it was the first time that this asset was measured, resulting in a much larger credit risk loss, offset by an exchange gain. The blocked funds related to $22 million transferred to the RBZ in the past. PPC treats this as a financial asset. In the first instance, the dollars are converted to rand. And in the current year, we realized a foreign exchange loss of some ZAR 68 million. This was offset by fair value reversal of some ZAR 51 million to give a net loss of ZAR 17 million. Again, in the prior year, the blocked funds were valued for the first time, giving the large loss of ZAR 258 million net of an exchange gain in that year. The nonmonetary loss or hyper, obviously, all relates to Zimbabwe. Last year, PPC applied hyperinflation for the first time, and this had a big impact, specifically due to PPE being inflated over such a long period of time. In the current year, the impact is much more muted, but hyperinflation on retained earnings and current year profit resulted in sort of a net credit on the balance sheet which is courtesy of hyper, and hence, the loss of ZAR 200 million nonmonetary loss that you can see on your slide. Last but not least, in the impairments, in the prior year, there was significant impairments taken, specifically at inland and coastal cement, totaling some ZAR 1.6 billion pretax. The uncertainty around COVID and the inability to take cost-cutting measures into account, courtesy of the -- sort of accounting standards was a significant factor. In the current year, due to the performance of the businesses and implementation of the cost-cutting initiatives, we had material headroom over the impaired carrying value of the assets and this enabled a full reversal of impairments taken last year net of depreciation. It should be noted that the DRC was impaired last year at an amount of ZAR 1.1 billion or $69 million. In the current year, upon classification of PPC Barnet as an asset held for sale at group level, the carrying amount was in excess of the fair value less cost to sell and an additional impairment of ZAR 761 million was taken on PPC Barnet at group. This affects the loss for the year from discontinued operations line in your income statement. Moving on to tax. Set out on this slide is a different way of analyzing the effective tax rate. What it shows us is that the actual monetary rate is actually 26.2% after a multitude of sundry little nondeductible and nontaxable items. What happens then are 2 big noncash unusual deferred tax adjustments, which result in the effective rate ballooning to some 42%. I'll briefly deal with them. They are a deferred tax charge at PPC Limited accounts due to the gain on the deficiency loan to the DRC. This is not eliminated on consolidation, and that makes up 2.5% of that 9.1%. Most of the balance is due to losses in PPC Limited, PPC group Services and 3Q Mahuma, where deferred tax assets can't be raised on the balance sheet. Then there's a further deferred tax impact due to hyperinflation of 8.6%. There are essentially 2 parts to this, one being the nonmonetary loss that I referred to earlier of ZAR 200 million. And then there's deferred tax raised on the actual hyper numbers in Zimbabwe, given that it pays actual tax on nonhyper numbers. Right. Here is just showing you the impact on HEPS of all those unusual noncash items that I referred to earlier. So we're trying to show you what the core HEPS would be before -- if we eliminate those. So there, we add those back. Those are the detail you saw in the earlier slide. As you can see, the HEPS then swing significantly from 1 year from a negative ZAR 15 million in 2020 to a positive ZAR 414 million in the current year, which, in our view is more representative of the underlying performance of the continuing operations. I'll deal briefly with CapEx before moving through to cash. This slide really just depicts the trend of the CapEx over the years. We did underspend in 2021, and most of it was on maintenance. In 2022, we expect to be back to normal levels of some ZAR 550 million per annum. Right. And here is the cash flow. The waterfall shows the movement from operating cash flows before working capital to the net movement in cash and cash equivalents. Movement in working capital is essentially a combination of an increase in South African cement payables of some ZAR 244 million due to increased production activity and accruals for employee incentives, which were 0 last year. This is then offset by increases in Zimbabwe's inventories and trade and other receivables, which are both affected by hyperinflation. What is good to note is that the group generated free cash flow after CapEx of ZAR 649 million versus an outflow from continuing operations in the previous period of ZAR 289 million. That shows a year-on-year improvement of ZAR 938 million, almost ZAR 1 billion Roland alluded to. There was a debt reduction across the group. SA reduced by ZAR 60 million. Remember, again, that's after the payment of the $16.5 million to -- for the settlement of the DRC obligations. CIMERWA reduced this debt by ZAR 60 million, and the big reduction came from Zimbabwe of about ZAR 170 million. All up, cash increased by ZAR 317 million for the year. This slide shows how we move from opening cash to closing cash. First, we take out the ZAR 110 million opening cash that relates to the discontinued operations. We then add the net movement in cash dealt with on the previous slide of ZAR 317. We then adjust for foreign exchange -- foreign currency balances to get ZAR 457 million closing cash. What is also important to note is that 65% of our cash is held in South African rand and U.S. dollars as opposed to the Zim dollar, for example. Moving on to gross debt. Here we show the movement in gross debt over the year. What is important to note is the elimination, as we've spoken about, of the DRC debt recourse to South Africa, which amounted to ZAR 2.5 billion at year-end. Net debt at the end of the year, after deducting cash, amounted to some ZAR 2.2 billion. Both -- we both repaid debt and increased our cash balances during the course of the year. On the next slide, I will show you the gearing metrics in relation to the SA debt. Our credit metrics have shown significant improvement over the year, and we are well within our actual banking covenants. The SA Obligor group, being South African operations in Botswana, the interest cover in relation to EBITDA has more than doubled, from 2.2 to 5x. Similarly, the gross debt over EBITDA has declined by more than half from 4.6 to 2.2. The receipt of the ZAR 0.5 billion from the sale of PPC Lime and Botswana Aggregates will further improve the ratios. Right. Last slide before I wrap up is a little slide on the group restructuring. There's 3 main initiatives that we focused on during the year and we'll continue to focus on. In the first, we reached the milestone on the DRC when we signed the agreement on the 31st of March. What remains to be done now, however, is actually implementing that restructuring term sheet. So we first need to recapitalize it through the conversion of loans into both ordinary and preference shares, and we need to execute long-form agreements before the 30th of September, which we're well on track to do. Regarding the sale of the noncore assets, we just need the standard conditions precedent to be met. We do not expect any issues in this regard, and envisage they'll be met by the date set out on the slide, 30 September 2021, for Lime and 31 July 2021, for Botswana Aggregates. Finally, we envisage engaging with our primary lenders next month to agree on restructuring our facilities and to finalize the size, if any, of a capital raise. Our target is to complete these engagements no later than 30 September 2021. To summarize for you, during the year, we've had improved financial performance, we've maintained cost discipline and we have de-geared the group. It is worth mentioning that various projects to improve financial controls over reporting progressed well, and we'll continue to do so in FY 2022. Before I hand back to Roland, I would like to thank Ronel van Dijk, who resigned as CFO effective 31 March, but who stayed on to assist for the year-end. We are here presenting today due to her commitment, support and tireless work. I'm sure you're listening, Ronel. Many thanks. Your efforts are hugely appreciated by all. Thank you.

Thank you very much, Brenda, for unpacking that. Before we go into the markets itself, I would like to give a very brief overview of the EBITDA performance in the markets that then will be given further color by Njombo and Mokate. I would like to focus on the right hand of this slide, where you see the EBITDA margins for the underlying businesses. Starting with South Africa and Botswana cement, which has seen an EBITDA margin improvement from 12.7% to 16.7%, which is a remarkable recovery, especially taking into account that we had no sales in April and very limited sales in May for this year. I would not give you a guidance or a target, but EBITDA margins in the cement business that do not start with the 2 are to be challenged, and Njombo is well aware of the challenge that he has in front of him. The material business is still not contributing on an EBITDA level. And you might ask yourself the question, so what is the plan of PPC with this particular business? And if you look into the business of materials, you need to split it immediately in 3. One of them is the readymix concrete business, a business that is of vital importance to stay close to our customers and provide a pull-through for the cement that we produce in inland. The profitability of that business is important to us, but maximizing that profitability will not go at the expense of the supplying businesses, be it cement or aggregates. Aggregates is this next supplementary business to readymix and concrete as well as to road infrastructure projects. We consider the aggregates business and the positions we have in inland part of our core portfolio with the comment that they shall improve their profitability. Otherwise, we will consider other alternatives. The third element is the fly ash business that we have that supplies into our cement as well as immediately to our customers. This is an important business for us to reduce our environmental footprint, and we would be looking at ways how we can grow these type of businesses. Overall, the SA operations have improved their EBITDA margin from 7.8% to 12.5%, and we're looking forward to see the sustainable EBITDA coming through when we have no impact of lockdowns. Rwanda had a remarkable year, pushing that EBITDA margin above 30%, driven by various actions that Mokate will unpack, but also on the back of a very strong demand, thanks to various projects that the government rolled out during the difficult months of COVID. Zimbabwe has normalized its EBITDA back to roughly 30%, which is more or less the target that we have, 30%, 33%. They're slightly below. Remember, last year, they had a remarkably high EBITDA margin on the back of the fact that they managed their pricing very well and their costs in the translation to the Zimbabwe dollars was artificially low, which cost us at the time a very high EBITDA margin. Overall, our EBITDA margin now stands close to 18%, and we look forward to pushing that up during the financial year 2022. A few words on our discontinued operations as well. Again, focusing on the EBITDA margin. You see that our business in the DRC has improved their EBITDA margins. I would like to congratulate the team in DRC. I think they're doing a fantastic job in the difficult market environment that they have. We are still only running the plant intermittently because there is simply not enough demand in the market to run the plant all the time. And a plant that is not running all the time and still a business that generates 18.5% EBITDA margin is not a bad business on itself. The problem in the DRC is the amount of debt in the balance sheet that will make it a business that will not generate something back to the owners, which is the reason that we discontinued it and found an agreement with the lenders. PPC Lime had a disappointing year on the back of a very disappointing year in the steel industry. Underlying business, in my view, is strong. However, it will need dedicated attention, which is something that the new buyer -- or the buyer will be able to provide. Whereas within PPC, it always remained a side business, a bit of an orphan almost in our portfolio, and it requires the attention that it deserves to flourish. The Botswana Aggregates business also needed more attention, which is something that we couldn't provide. It's a relatively small business. You see that its EBITDA margins have slightly declined. And we also think that here, it will flourish under new ownership. With that, I'll hand over to Njombo to take us through your business in South Africa.

Thank you, Roland. Good morning to everyone. Let's do the -- okay, starting with South Africa. In terms of the industry, I think it's worth saying that it has been a strong recovery, obviously, starting the new year. It was a very difficult period towards COVID with the stoppage, with a hard lockdown in South Africa. However, returning back from the lockdown, we saw very improved retail sales, and we believe that was influenced by the cutting of the interest rate, the social relief grants. And the other factor that worked in our favor is the exchange of the share of the wallet with alcohol. And unfortunately, we also saw that the retrenchment packages that have been paid during that loss of jobs has actually mostly gone into refurbishment of houses, especially in the rural areas, which have obviously positively influenced the retail sales in the rural areas. In terms of the coastal region, coastal is traditionally quite focused on construction and also on the civils. And mostly, this comes from all the infrastructure work that happens in the coastal as well as the wind farms that have been at least carrying the coastal construction business. And that has taken a little bit of time to come back into operation, and therefore, that has lagged behind the improvement that we've seen mostly in the inland area. In terms of the imports, we're still seeing a lot of imports coming into South Africa. By the time we finished the year, we could see that imports are still increasing, especially in the KZN area. A little bit of a slowdown in the coastal area during the COVID period, but they are bouncing back again. We are continuing with the engagement with the government in terms of putting the import barriers. We've got the designation already declared in terms of designating the locally produced cement, but that is also sitting somewhere in the DTI on somebody's desk. With regards to the imports, we are making some significant progress through the TCI, and we're putting pressure on the government. As Roland mentioned earlier, in line with our 3 mega plant strategy, we have been focusing on optimizing the existing assets, and looking at the footprint and making sure that it delivers on its value. And our rationalization progress -- process has actually paid off. We're currently running 2 integrated plants in the inland region and 1 integrated plant in the coastal. And we spoke about that soft mothball, and that has actually paid off because when the demand increased just after the lockdown, we were able to very quickly return some of our units back into operation. We're also further entrenching our route-to-market strategies with a very, very specific focus on good quality margin areas, and that's where we are moving into by force. We looked at the quality of our product range. We maintained the product range. However, we've rationalized the product range, especially in our coastal business because of the market conditions that prevailed. And then this has resulted in a lot of operational efficiencies that we were focusing on with regards to the 3 mega plant strategy and a very strong margin management. We focused on our supply into areas that have given our sustainable margin, and those regions are actually where we're doing very well in terms of our products and product dispersions. We have looked into various areas based on our fixed cost and variable cost, mostly on our logistics. We've managed to improve cost on that side. And obviously, on the maximum demand on electricity, that was one area that has contributed significantly in terms of our cost management. The additional benefit that we had was when we had a pickup on the retail, PPC was basically very well positioned, especially on the inland for us to take advantage of the situation, whereby we were able to bring 1 unit back into operation within a period of 2 weeks. And as the demand progressed to increase, we were able in 2 months to actually bring another unit back into operation and take advantage of the situation. From a financial point of view, volumes increased by 6%. This is at the back of 1.5 months of not producing. And if you really look into the numbers, this is a national number of 6%. If you look at the inland side, including Botswana, we are about 11%. And if you exclude Botswana, we are about 17% up. Botswana has been impacted by, obviously, the border crossing and all the logistics going into Botswana. So we have very pleasing improvement in the volumes. The revenue also showed a very good increase. And as Roland was mentioning, in terms of the margins, I'm quite pleased that it's a 31% increase on last year's margin. However, we feel the price is still coming from a low base, and we still have to do a little bit more in terms of improving pricing in the market as well as ensuring that we sustain most of what we've gained in terms of the cost reduction. In terms of the materials business, materials is operating mostly on the construction side of the -- it's operating mostly on hard construction and on civils. Therefore, the recovery of the readymix has been very, very slow, especially with the aggregates as well on the inland side. And that is because actually effectively construction came back into -- after the lockdown somewhere around Level 3 and Level 2. And therefore, there has been a delay in bouncing back. However, the fly ash business has benefited from the lack of slag in the market, and also the increase in retail has meant that extended products were basically improving in the market. In terms of our readymix, we can see that in the Gauteng area, they've -- readymix followed the bounce back of the Gauteng market. However, on the rural areas, which is mainly driven by mining activities -- and the mining slowdown has had a negative impact in terms of the readymix business. With regards to the aggregates business, there has been a slight improvement as construction came back into operation. In terms of our focus areas, the one big focus was obviously on the costs. And mainly on our aggregates business, there has been a very strong focus on reducing the costs. And we focused our markets into what is so-called informal markets, which has actually significantly grown in the last year and that has got very good margins, which has benefited our materials business. We also focused on expansion of group synergies. From a point of view of looking at materials as a vertical integration and we started looking at getting and drawing more benefits out of that vertical integration. And this has resulted in a situation where we have restructured our operations, especially on the readymix, and restructuring includes the closure and relocation of some of the operations into areas where they are significantly utilized. And with regards to the route to market, we've looked at what we internally call Project 70, which basically focuses on the delivery radius of both our aggregates and the readymix business, especially in the Gauteng region, which it has actually paid up in terms of improvement on that. And then the product basket offering, again, it's mostly taking advantage of the vertical integration and the synergies that takes place between our fly ash, aggregates, readymix and cement business, which is starting to pay some results. Unfortunately, with the difficult period that the business has gone in, the revenue is reduced by 4%. But if we consider that there has been organizational restructuring expenses, especially on the readymix and aggregates business, it's still a good performance in terms of the materials business. I'll hand over to Mokate.

Thank you, Njombo. Let me -- and good morning, everyone. We'll just do the protocol. I will take off my mask. I'll start first by taking you through our performance in Zimbabwe. As both Brenda and Roland mentioned earlier, our performance in Zimbabwe was really impacted significantly by the hyperinflation environment as well as the currency devaluation in Zimbabwe. And what you've seen in Zimbabwe in terms of the impact of COVID is not different to what you've seen in inland, where quarter 1, we've seen very -- a significant impact on volumes by COVID. And with a very strong recovery in quarter 2 and quarter 3, overall volumes increased by roughly 8%. But as well, we've seen in the Zimbabwean market, a strong presence of inputs coming from the neighboring countries, particularly in the Northern part of Zimbabwe. And as a business, we focused on a few initiatives. And one of them, as both Brenda and Roland said, was to really focus on maintaining our market share. And if you look at our year-on-year market share in Zimbabwe, we remain fairly flat. Basically, we grew our volumes in line with the domestic increase in volumes. We also optimized our foreign currency revenue. And you've seen -- and this is what is called in Zimbabwe free funds, and this is what has enabled us to really pay dividends to PPC Limited. We also started -- we worked on a few initiatives to optimize our industrial performance with the objective of saving costs in the long run and also minimizing the impact of inflationary cost increases on our overall performance. And we looked at how to domesticate some of our input costs. There's a lot of initiatives that we've put in place to localize part of our input costs in Zimbabwe. And through our engagements with the authorities in Zimbabwe, we effectively lobbied for import ban. And in April, the Government of Zimbabwe, in fact, approved the ban of imports. It's still early days. We'll still see how that translates in volume increase in this current financial year. The outcomes, we've seen our volumes, in foreign currency terms, increasing roughly by 55%. It's actually -- the actual number is 57% compared to last year where we actually had only 12% of our volumes in foreign currency. And we've also approved some investments to optimize our operations, and some of them will come towards the end of this financial year and mainly targeting our environmental compliance and energy-saving initiatives. We expect commissioning to start at the beginning of the next financial year. We've also improved our bulk capacity. If you look at our volume growth, our bulk sector increased from 14% to 20%, targeting infrastructure projects. And most of -- some of these infrastructure projects were FDI funded, meaning we increased our foreign currency revenue line. And you'll see the financial impact, I think Brenda has really taken you through our performance -- our financial performance. And I think what Roland also mentioned, if you look at our EBITDA margin, it's -- in the previous year, it was really impacted definitely by the fact that when the government introduced the ZWL currency, some of our input costs did not follow the exchange rate. They lagged behind the exchange rate, and that created an artificially high EBITDA margin. Rwanda, first country to actually go through the lockdown last year. Although we were able to supply some of the volumes that were targeting government-funded projects, the volumes were quite low in the first quarter, and we've seen strong recovery in quarter 2 and quarter 3. And the bulk of these volumes actually were targeting the Ministry of Education project, which is about 150,000 tonnes, of which we benefited to supply just slightly more than 50% of those volumes. And the reason why we could not supply the entire volumes is because the volumes were packed into a 5-month period, where we needed to supply these huge volumes in a very short space of time. And we had to maintain our presence in retail and other segments in the market. And we also saw a new entrant coming into the market, a new -- brand-new station that was commissioned in September. The fortunate thing is it came at a time when there was huge demand of product in the market that allowed them to smoothly enter the market. And what we've also done that benefited our revenue line is the fact that we increased the cement price in U.S. dollar terms by roughly 6% in the year. And last year, when we presented the results, I mentioned that we actually spent additional $2 million to debottleneck the plant. And I think what you see here today in terms of the performance of the past year is the benefit of the investment that we've made last year. And we're seeing great improvements on energy consumption, both on the thermal energy consumption. We've seen improvement on coal substitution rate that was slightly above 10%. And what you also see here is consistent drive to reduce our carbon footprint in Rwanda. Our clinker factor is reduced by roughly 10%, which equates to roughly $1 million of savings just by driving the cement extension in Rwanda. And the net result is clearly increase in our volumes. And our revenue line has grown by 21% due to pricing and increase in volumes, and our EBITDA has increased quite significantly. And it's also contributed by the fact that we implemented very significant cost reduction initiatives. Thank you.

Thank you, Mokate. Thank you, Njombo. That, ladies and gentlemen, takes me to a very brief summary, and then we're going to open up for the questions that you may have posted already. In short, I do think that the results that we shared with you this morning are a testament of the resilience of team PPC performing well under difficult circumstances throughout the year. No demand to very high demand, to stabilizing demand and that all with the virus around us. The efforts to reposition the business has yielded results. And as we are now implementing them, we will finalize the capital restructure project in the course of this financial year. We remain positive about cement demand in our core markets. As we go now through the first quarter of financial year 2022, obviously, making a comparison to last year gives ridiculously high growth numbers, so probably our volume in this first quarter in South African cement will be more than 60% above last year. So it's more important for us to look back to 2019. And the volumes that we see in the current quarter in South Africa are more or less at par with what we've seen in 2019. That, coupled with a much stronger cost base, better pricing is giving us the optimism to look at further de-gearing of our balance sheet. Brenda highlighted that we are working as per plan on the milestones around the divestment. And I would like to close out with the fact that, as mentioned by Njombo, the moment demand, especially in South Africa, will accelerate, PPC is there to serve its customers, and therewith, serve the benefits of its communities, its employees and its shareholders. Thank you very much. Kwame, over to you for the Q&A, please.

Let's start off with the conference call. Are there any questions on the conference call?

There are no questions in the queue at the moment, sir.

Okay. We've got a few questions from the webcast. So let's start. One is from Mergermarket. And the question is, what are PPC's gearing metrics likely to be following the receipt of the proceeds from the sale of PPC Lime and Botswana Aggregates? So I think they're pointing to the fact that will things improve post the receipt of the proceeds?

Go for it, Brenda.

ZAR 500 million or ZAR 0.5 billion we refer to will go directly to reducing debt. So the impact will be -- full impact of that ZAR 500 million.

So if you look at that, just to add to that, right? So you see here on the slide, the ZAR 2.2 billion gross debt, which is actually a bit less in terms of net debt, deduct from that ZAR 500-odd million, so you come to ZAR 1.5 billion. Compare that to an EBITDA, just our cement EBITDA last year was ZAR 866 million. That will go up a little bit if you have a full year. So you'll very quickly come to ZAR 1.5 billion or less.

Next question is from Zaid Paruk from Aeon Investments. And he says, the auditors have disclosed that there are still gaps present in more routine monitoring and review controls at group level and in the components financial reporting and closing processes. Please, could you provide more color on why this is taking so long to fix, and what are the key issues here?

I can certainly try and help you there. I think anyone to expect the problems to have been fixed in such a short space of time since October last year is it would be a hard ask. There have been improvements. I think the failures you referred to there are very much at-the-site level. A lot of it relates to systems. We -- one of our key projects is to simplify and automate, take out the manual transactions that are still causing these issues. What we have done, however, is -- one of the projects I'll refer to is to significantly strengthen group reporting controls at group as a sort of compensating control, and that has gone very well, with significant -- obviously, our results are today much, much sooner than they were last year. But we're not going to stop. I mean, it's a bit of a journey. And the next step is to embed the controls that we've identified and the gap -- all the gaps. And that will commence now in 2022.

All right. The next question is from Fraser, Peregrine Capital. Please give us indications of post-period trading, so trading performance after results. And also, what are your pricing plans/expectations for cement pricing in FY '22 in your 3 main markets?

Yes. I touched a little bit upon the first quarter, but let me just pass it on to Njombo to speak South Africa and Mokate for Zim and Rwanda, please.

Okay. In terms of trading, post the results, we've actually seen very good performance on the inland side. As we said, coastal started off very slow, but it's starting to recover for now. And Botswana, there is still problems. Botswana has experienced what we think is their third wave, and therefore, there was a bit of a slowdown but it's also starting to pick up now. So the trading environment is still great. However, you can see that there is less money in people's pockets or retail is starting to slow down. There is some green shoots coming through from the government infrastructure projects, but it should happen quicker. And then from a pricing point of view, it's still a very challenging environment. We are still looking at improving on the pricing, but mostly in terms of the margin expectation, we expect to have a significant improvement based on us focusing on our cost.

Thanks, Kwame. I'll start first with Zimbabwe. In terms of volumes that you see in Zimbabwe, it's certainly in par with what we anticipated. With regards to pricing, we've [ reflected ] 3% U.S. dollar pricing beginning of the financial year. However, the biggest challenge for us in Zimbabwe has been really our ability to execute a maintenance shutdown. If you may recall, quarter 2 and quarter 3, we saw a very strong demand. With a single-line -- being a single-line business, it becomes quite difficult to do a maintenance shutdown. Hence, we had to import some of the clinker from South Africa over a period. And I can report now that we've successfully concluded that shutdown and we are able to -- we are planned -- scheduled to meet the upcoming demand in the market. In Rwanda, the impact of COVID, you're seeing the impact of COVID on the overall economy. We've seen a very fairly softer market in the first 2 months. We're seeing now this month fairly strong recovery, back to where we expected. Pricing, we expect pricing to be under pressure concerning the fact that we've implemented a double-digit price increase in Rwanda [indiscernible] last year. And also with the new entrant coming into the market, we don't expect significant increase on the pricing. Thank you.

Okay. The next question is from Chris Reddy from All Weather Capital. He says, on Point 35 in the notes -- I'm assuming actually Note 35. For the potential capital raise, the underwrite of ZAR 333 million from VCP, is that a fixed underwrite or a percentage of the total requirements? So for example, should you only need to raise ZAR 400 million, what will VCP still underwrite? Will it still be the ZAR 333 million?

It is a hard underwrite of ZAR 333 million. So I don't think that if we reduced the equity raise to ZAR 400 million, I think they would just like to stand in their corner. But for now, we've got a hard underwrite of ZAR 333 million.

And if I just may add to that, Brenda. Obviously, we're very appreciative of that underwrite. It was very important, especially last year. As and where we stand currently, we hope it won't be needed to use any of that.

Next question is from [indiscernible] from [ UNKI ]. When is the dividend forecasted for PPC?

I think the first question here is, the close out with the South African banks. You can make your own model calculations. We have done ours. I will not give you an exact time frame. But if you see the cash generation, you come to debt-to-EBITDA metrics below 1.5 and you continue to generate good cash. We have a few plans on smaller projects that we would like to execute, but there should certainly be something left. In my opinion, PPC should become again a dividend generator in the near future.

Okay. The next question is from Rajaratnam from MIBFA. He says, thanks for the presentation. In Zimbabwe, how does the mechanism of using free funds actually work?

Mokate, you know how it all works.

Thanks, Kwame. So the cash -- ForEx that you generate through your domestic sales is what is called free funds. And to externalize that cash, you don't have to go through the approvals with the -- to go through the reserve bank. So you are able to repatriate that cash because it's classified as free funds. That's basically what it means.

Let's just check on the conference call again, if we've got any questions.

We still have no questions.

Okay. Thank you. There's another question from Rowan Goeller. Please, can you comment on capacity utilization in SA cement plants? And has there been any change since post-March this year?

Njombo?

Yes. There has been a slight change. Obviously, the capacity utilization, we were able to see figures of around 75%. And hence, we actually had to kick in the third kiln into operation. So towards the end of the financial year, starting the new financial year, we were running about 5 kilns in South Africa. We were reaching utilizations of about 80%. And we actually were selling clinker to some of our partners, including Zimbabwe. We are expecting that to slow down. We have already stopped one of the units in Dwaalboom. But -- yes, we've reached levels which we've never had in the last 3 to 4 years.

If I may just add to that, because, Rowan, I think it's an important question. As I said, we are counting on 2019 volumes. So you should also look at 2019's operating kilns, which for us means 1 kiln operating well in Slurry, 1 kiln operating well in Dwaalboom, and the kilns operating in the Western Cape. The main risk that we see for this industry is that if the industry will start to chase volumes that do not exist because we are painfully building up margins through better price management and certain stability. And it is very important that as an industry, we make sure that we bring capacity online if and when needed only. Last year was a very strange year in terms of the supply-demand pattern. This year, we expect a much more stable situation like we saw in 2019.

Another question from [indiscernible], [ UNKI ]. What is the forecasted comfortable debt level for PPC?

I think it depends a little bit. It's not just us who determines that. I mean, I once said that I think 2x EBITDA is a comfortable debt level, and the banks obviously think differently. The environment is volatile, so this is something that I'd rather not speculate about it. I'd rather give you the number once we have concluded the negotiations with the South African banks.

Then there's another question from Lazarus from Ninety One. It's pretty similar to what you've asked -- has been asked before. He says, congratulations on the results. Could you please give us a current run rate across your businesses post-March and your price inflation expectations?

Yes. So it's -- in terms of run rate, I wouldn't disclose, of course, any monthly EBITDA numbers. I've never done that. Doesn't make a lot of sense. I've given indications on the quarterly volumes. You've got to bear in mind one element that Njombo didn't mention in his reply. The price increases that came in last year came in, in October and came in around February. So towards the second half of the year. Obviously, during the lockdowns, we didn't do price increases, also not only just came out. So you will see actually an overall better pricing, which drives these margins that Njombo pointed at.

And there's one from Adrian Saville, GIBS Centre for African Management and Markets. He says, what are the prospects for private/public project collaboration in your large markets to drive domestic project demand spend?

Yes. I once referred to private/public partnerships, PPP as PowerPoint presentations. Sometimes it stays at that level. For us, as a direct participants in private/public partnership, we do not see it as an investor role because normally those are very long-term investors. But we are partners behind it. So we're almost like the fourth P as a partner in the public/private partnerships, partnering as a stable supplier of the product needed for these projects. Think about -- especially about road projects, but think also about larger infrastructure, be it wind energy, solar energy, water treatment centers. So we follow it closely. Njombo, maybe you want to allude a little bit on the investment drive of the Office of the Presidency as well?

Yes. I think we're engaging with presidency, especially Dr. Ramokgopa that's in charge of the infrastructure projects from the government's point of view. There's quite a significant interest in engaging ourselves as well as the industry. We currently through the industry and with the presidency talking about a construction recovery plan, which involves a whole lot of projects that are taking place. And yes, as Roland mentioned, we can only assist in that process, but there's quite a lot of significant movement towards utilizing these PPPs, which then ensures the speedy implementation of projects.

I think another place where we play a role, just to add to that is maybe not direct, but -- for example, PPC launched a bricklaying workshop for smaller companies. Just to make sure that we build also the skills that South Africa needs in order to drive on this infrastructure housing and what we need. So it's much broader than that.

Can we check again on the conference call? Are there any questions?

There are no questions in the queue, sir.

Okay. There are more from the webcast. From Ambekar, Excelsia Capital. How do you plan to get SA Cement margins over 20%? Please talk through price, volume and cost levers to get there.

I'm curious on the answer as well.

I think Roland stated, one of the possible things that we should not forget is that at some point, the reason why we went for 3 mega plant strategy and rationalized our capacity is to ensure that the behavior in the market in terms of pricing is actually such that it will drive the right direction in terms of margins. We've taken out a lot of costs in our business, which is giving us a positive impact with regards to the margins. And I think mostly the biggest thing is focusing on the logistics costs, focusing on the operational costs. The price improvement is not going to be very easy, especially with the post-COVID situation, whereby we can see that the economic recovery in South Africa is obviously going to be slow. We're looking into our products in terms of having the right product for the right application. And you will see that we've actually looked at increasing more of the lower-end products and which are specifically required for the retail sector. As the construction sector starts to pick up and we get a lot more of the civil, then the pricing as well and the margin expectation should improve because of these high-margin, high-value products coming back into play. So at this point in time, the game is to manage a volume in the market and not go chasing volume, but actually focusing on high-margin markets or areas where we can generate good margins.

Sorry, I just want to add to that. And also, just bear in mind, if you look at the turnover that we report in South Africa and Botswana Cement, right, of roughly ZAR 5.2 billion. If you take 20% of that, you come to ZAR 1 billion and a little bit. We were this year at ZAR 866 million EBITDA. So you need to close that gap of ZAR 150 million, right? And taking into account that we couldn't run this year fully, taking into account that Njombo hasn't seen the full impact of all the cost actions that we already have, even if on the price, you manage to follow inflation, you benefit from the full year of the costs, that 20% is not as far away as we might think.

Okay. So then there's another question from Chris Reddy, All Weather Capital. Have you been impacted with the recent load shedding?

Njombo? I guess, it's South African load shedding, so typical South African...

Yes. Load shedding has had an impact. And in fact, this time around, despite the agreements that we've got with the government and Eskom, we do get expected to load shed some of our operations. It is generally something that we are engaging with the government with as an industry. And specifically, a whole element of the ability of government to supply electricity, the Transnet in terms of logistics moving our products, it's something that we are engaging at a very high level to try and get an improvement on.

You might want to speak a little bit about the solar projects and the size of those.

We have embarked on solar project initiative at the mega plants. It's not going to replace Eskom. However, we are able to then try and focus. Our focus is to ensure that we generate enough capacity for us to be able to run major units during the time of the slowdown. And we've made some significant progress with the solar project, which we are hoping that by the end of the year, we will start seeing some of them going closer to implementation and commissioning.

What's the typical size of such a plant -- solar plant?

About 10, 15 megawatts plants.

Per site?

Per site.

There's another question from David Fraser. Is it reasonable to assume higher dividends out of Zim post the payment of your U.S. dollar debt, i.e., once you've cleared off your U.S. dollar debt, can the market expect more dividends and higher dividends coming out of Zimbabwe?

I'll answer it by saying it depends on if there's any legislative change in Zimbabwe. But as long as the situation stays the same, we envisage that we'll continue paying money to the mother company.

Okay. So then there's one from Andrew Snowdowne from Sanlam. He says, it is encouraging that you have an increased cost focus. By way of guidance, can you quantify the full expected impact on cost reduction for the next 2 years? Also, how much of this is fixed versus variable? And what is sustainable over the longer term?

So as I indicated, what we have mentioned in the slide is the ZAR 300 million, which is a combination of fixed and variables. I will not mention another number. I'm always careful with numbers. It depends on inflation headwind. And I don't want to be one of those CEOs that starts to say, these are the savings that we promised, and then scratch to demonstrate that they're there, and then the CFO doesn't see them in the P&L and stuff like that. Our cash focus, our cost focus will remain, and we will give guidance to the market. We're planning to give more guidance to the market on EBITDA generation after we close out on the projects that we have for the capital restructuring.

Yes. I think it also would be dangerous to speculate. I think there are 2 things that I said we focus on in terms of electricity, in terms of the Transnet providing logistics. Logistics costs on the variable side can run away with us. The more Transnet is not able to deliver and you switch from rail to road, your costs just escalate. And obviously, the fuel and the escalation of electricity in South Africa, it's very, very unpredictable. So that has an impact in terms of the variable cost. I think we will start to see a lot more benefit out of our fixed costs in terms of all the efforts that we have put in because most of those -- the controls is within ourselves.

Next question from Ambekar, Excelsia Capital. Please talk us through electricity self-generation plans with the new limits. How do you expect this to affect your cost base?

Start, and then Zim.

Start with Zim.

The legislation is not for Zimbabwe, it's South African. But I'll perhaps talk more about our solar project in Zimbabwe. I mean, we have 2 projects. One is a 20-megawatt project at our clinker facility with backup batteries for about 4 hours. And the reason for that is to also allow our [indiscernible] or our kiln lines to run even in the absence of complete power for at least 4 hours. In terms of the pricing, the current proposal, it's just below 70% of what we pay to the utility service provider with escalation linked to the dollar inflation. So it's actually much cheaper compared to what you pay for the grid.

Yes. In terms of South Africa, more so the solar power is aimed at the reliability and continued operation rather than in terms of the cost. The cost of solar continues to, obviously, be much more favorable than it was in the past. Therefore, there is an increase that is expected. One of the biggest benefits that we would expect is mostly on the fact that you will be able to continue running. There's a proposal at the moment from the government side in terms of the wheeling program. That is a bigger benefit because basically you continue to generate the power. And when you are not using that power, you can actually sell it back into the grid, which has got its own benefit.

And the third benefit that I would like to mention is that it will reduce our CO2 footprint because we're moving to more environmentally friendly electricity generation.

So there are last 2 questions. One is from [ Vajei ] (sic) [ Vayej ], Afena Capital. He says, in the trading statement, you made reference to one-off costs related to restructuring. Can you quantify the one-off costs related to the restructuring, excluding the DRC debt restructuring?

So the one-off costs that are referred to are ZAR 81 million in total, but that does include costs for the DRC, and I will have to get back to you on this [indiscernible]. I just can't remember how much of that was related to the DRC. A material portion, suffice to say.

And the last one is from Mergermarket. It goes back to the power again. He says, how many of these 10- to 15-megawatt solar project is PPC developing? And how will these be funded?

Okay. We currently have about 3 projects that we are looking, and it's in line with our 3 mega plant strategy. So we're focusing on the 3 mega plants. We do have smaller ones in other operations, which are called rooftop, and that is taking advantage of the footprint of the rooftops in our operations, but those are the smaller ones. In terms of the funding of this project, it's again a project which self-funds. And basically, the agreements that we go into is that we pay that reduced amount in terms of the power that we use and the capital is provided by the model in terms of the PPP that we've got.

Let's just check on the conference call again, if there are any questions?

No questions on the conference call.

So one last question has come through, and then we can take it and wrap up. It's again from [ Vajei ] (sic) [ Vayej ] from Afena Capital. He says, you mentioned that you have repatriated dividends from Zimbabwe during FY '21 and post year-end. What rate is your cash building up in Zimbabwe in local currency, assuming that you aren't able to freely repatriate cash?

Cash in local currency?

Yes.

As you may have seen -- thanks, Kwame. In Brenda's presentation, we really -- our exposure to local currency is quite low. Our cash balances in Zimbabwe are quite low in ZWL. And we -- what we've seen in the last first 2 months also this year, we're seeing a proportion of our sales continuing the same trends in terms of the split between local currency and ZWL. So we don't expect to keep significant balance of our cash in ZWL because we pay all the taxes and all in-country input costs in South Africa.

No further questions.

Thank you very much, Kwame. Let me -- allow me to wrap it up, first of all, by thanking all of the viewers for listening, for the questions that you've had. But also thanks, in addition to the team, PPC, my colleagues in the executive committee, our Board. I hope that you have clearly listened to a company that is focused, focused on getting itself back to 2 feet, strong balance sheet in South Africa, this coupled from individual strong balance sheets in our international operations. We're focused on continuous cash generation out of that footprint and making sure that we are well positioned to tap into the opportunities that a lower carbon footprint building materials group like PPC will achieve over the next 10 to 20 years. I thank you very much for your attention. I look forward to further engagements as we move along in our journey. Thank you very much.