PPC Ltd (PPC) Earnings Call Transcript & Summary

So ladies and gentlemen, dear participants, both here in the room as well as online. Welcome to the presentation related to the financial results of FY '23, the year that ended on the 31st of March. I will give you a brief introduction. Afterwards, I'm joined by my colleagues of the Executive Committee. I will hand over to Brenda, our CFO, we will then talk through the results of South Africa and Botswana, specifically. I'll hand over to Njombo. Mokate will take us through Zimbabwe. After that, I will come back to speak about Rwanda, our company CIMERWA and then round it up and open the floor to questions and answers. It's a pleasure for me to be back in person. We've done this online now for a number of years. I was here the first time 4 years ago. Lots of things have happened. And I think you will agree with me that PPC has come quite a nice way in reducing debt over the last couple of years. As I mentioned to you, after my introduction, it will be Brenda, and then we follow the agenda as it stands here. Before we go into the fundamentals of our markets, we thought it was good for you to give again this overview of what PPC actually comprises. 4 years ago, when I started, I was told PPC is complex. And I said to you at the time, it is our job to make sure that it is well understood because it is not that complex. By now, we are a company that is operating in various territories across Sub-Saharan Africa. Our most important business sits in South Africa and Botswana, which is both a cement business as well as what we call a materials business. Materials comprises of ready-mix concrete, aggregates and fly ash, 3 distinct businesses. Materials is important for the cement business. Our ready-mix and concrete business is a major customer of our cement business, and it is a way how we bring solutions to the market to contractors that finally use our products to build infrastructure, houses, hospitals, et cetera, et cetera. It is important to understand, if we look at the South African cement market, that South Africa is a large country that has different submarkets. We predominantly operate in 2 parts of the country. One of them is what we call our inland market, most important markets and provinces in there are Gauteng, Mpumalanga, Northwest, Limpopo. Our coastal business, most important province where it operates is the Western Cape, as well as going into the Eastern Cape through our grinding station in Port Elizabeth. Parts of the country where we operate less are, for example, KwaZulu-Natal. Cement is very sensitive to large distribution distances. So if we look at the underlying dynamics, and we will unpack this in the section of Njombo further, we have seen that in the financial year 2023, the overall macroeconomics for South Africa weren't great. But we have seen that, for example, in the Western Cape, we had more activity than what we saw in our inland region. Our inland region, however, is significantly larger on the overall scope. As you know, cement is a high carbon emitter, and we have announced our road map to decarbonize our products. And I will touch upon that because we believe that it offers us opportunities not only to fight climate change, but also to reduce the cost base and therewith bring our products to customers at the lowest possible cost to them. A lot is spoken about load shedding in South Africa, a word that my European colleagues still don't really understand. So I have to explain to them that in this audience, I think we're all very familiar with load shedding. Load shedding impacts our business differently between cement and materials. Our cement business is, by and large, not much impacted by load shedding, for 2 reasons. Number 1 is the close collaboration that we have with Eskom, combined with the fact that we're not running all our equipment at full utilization. So if we get advanced notice of Eskom, we can actually reduce some of our machinery and there would reduce the energy -- the electricity that we need and keep on running in the times where we are able to run. So overall, the impact on our cement business of load shedding is very, very limited. What it does cause for us is headaches because with load shedding also comes fluctuation of stability of electricity. So sometimes we have tripping motors as a consequence of load shedding. And that's -- it's a headache, but it's not that our business comes to a complete stop. The Materials business, however, is exposed to load shedding. Those are smaller operations spread out to the country sometimes directly connected to Eskom, sometimes connected through the municipalities. And there, the rhythm of load shedding is a one-on-one impact unless we install diesel generators in order to have backup power. Across all our sites in South Africa, we're obviously looking also as part of decarbonization to install renewable electricity. An area where this year, we have concluded contracts with providers. It's an area where we are not investing ourselves, but as a large off-taker of electricity, we are an interesting customer in order to buy from wind farms as well as from solar plants. If we look outside of our South African business, we have 2 remaining international businesses that are fully consolidated in our financial results. Zimbabwe, which is part and parcel of our strategic focus on Southern Africa. Our shareholding in Zimbabwe is 70%. We enjoy 93% of the economic benefits due to the fact that we have indigenization partners in the shareholding structure at this stage. Both Zimbabwe and CIMERWA and Rwanda are managed through their own board. Obviously, PPC management sits on those boards. But we have also a number of independent directors on those Boards in order to make the right decisions in the right context of these countries. Both Zimbabwe and CIMERWA enjoy technical and management support from South Africa. And I'm very pleased to say that both Zimbabwe as well as CIMERWA are now declaring and paying out dividends, which then flows back into the South African business. CIMERWA has declared its maiden dividend. It came in March this year. Zimbabwe has been on a routine base now for a number of years, biannually pay dividends back into South Africa and Brenda will unpack this further when she goes through the financials. So overall, our business, I think, is relatively straightforward. Main business is South Africa, Botswana, with our subsidiary in Zimbabwe as well as CIMERWA. We no longer have our shareholding in PPC Barnet in the DRC consolidated in our numbers. As of 29th of April last year. So it's still just touching in our financial year last year, we have deconsolidated PPC Barnet out of our books following the restructure that we spoke about over the last years. Also last year, we sold our minority shareholding in Ethiopia, in line with our strategy to focus on Southern Africa. So as we talk to our business, we always talk through what we call [ pre buckets ]. It doesn't sound very nice, but that is how we loosely refer to it. South Africa, Botswana, Zimbabwe and CIMERWA in Rwanda. They operate in different environments. Obviously, South Africa, as I already mentioned, the coastal demand outperformed our larger inland, but overall, the volumes declined in the last financial year. On the back of still a low amount of government spending and infrastructure as well as an overall weak economic environment, obviously, higher inflation as well as higher interest rates curtail the spending power of consumers. And for us, consumers are the main driver of our products. More than half of our products go through the retail segment into a variety of applications that are driven by the overall macroeconomic situation. If we look at our international business, Zimbabwe continues to enjoy a very robust high level of cement demand. As we have explained in our interim results in November last year, we had to stop our kiln for a prolonged time in order to upgrade the kiln and bring it up to the standards where we would like to see it. And therewith our volumes declined last year. But I'm very happy to say that since that plant is now back up, we see a very strong recovery going now into the first quarter of this financial year, and we're very positive that Zimbabwe will continue to benefit from strong demand in this financial year FY '24. Also Rwanda, has a strong market, both an internal strong market on the back of both private spending as well as government spending. And we are also exporting from that plant to the eastern part of the DRC and despite the political tensions between DRC and Rwanda, business goes on. So we continue to export about 1/4 of the production out of our plant in Rwanda into the Eastern DRC market which has an additional benefit as it brings in U.S. dollars as those markets are all paid in U.S. dollars. We do see that in that part of the world around Rwanda, new competitors are starting up their business. There is a new Chinese producer in the southeastern part of the DRC, not very close. It is about 400, 500 kilometers from Rwanda. But you have to bear in mind that 400, 500 kilometers in that part of Africa, is about 1.5 days travel. So it is not driving from here to, I don't know, [ bloom from time ], right? So this is a very difficult and complex distribution network, and we don't see an immediate impact on the business of Rwanda. We know that Rwanda doesn't have limestone itself. So it will always be dependent on importations in addition to what CIMERWA can produce. We have identified new limestone reserves for our operation in CIMERWA, they are not in country. It's a little bit left in country. Of course, we still have our own plant, which is about 12 to 15 years, depending on how much we produce. But 12 to 15 years for a cement person is short term. So we are starting to look at new reserves, which will be across the border in the DRC. And that's unfortunately where political tensions at the moment do stop us from moving forward and securing that limestone. If we look what is the same across our portfolio, of course, FY '23 was characterized by a huge increase in energy cost. Following the invasion of parts of the Ukraine by Russia, we all remember what happened to electricity, energy prices, in general, fuel, coal and that has an impact on our business. We will unpack a little bit further when we talk country by country, how it has impacted us. Energy reliability as well as stability is a key risk across our portfolio. I talked about load shedding. Mokate will touch upon power instability in Zimbabwe that has [ burdened ] us and the overall fluctuation, the little predictability that we have on call is, of course, something that we have to manage on a day-to-day basis. Another challenge across our portfolio is cement imports. And let me be very clear. We have no issue with cement imports for as long as it comes at a level playing field, where we have a problem is countries like Vietnam that have overcapacity and are able and willing to sell at variable cost plus a little bit, using the backload of the vessels that go with the commodities from Africa to China using lower shipping rates and basically dumping cement on our shores. Njombo will unpack that last year, we saw a decline in imports, which has been good news for our Western Cape operations. It's part of the reasons that the volumes went up. However, we also see this as temporary. There are 2 main variables on imports. Number 1 is the shipping rates; and number 2 is the rent to the dollar exchange rate. Both have been favorable for a [ large ] part of the last financial year. And when I say favorable, I mean shipping rates were very high. They have started to come down since about July, August last year, and they are now back at normalized levels. The second one is that a weak rand makes, of course, buying in dollars more expensive. Now nobody wants a weak rand, and we do expect that shipping rates will normalize. So for us, the continued conversation with the government to put in place protections, remains one of our top priorities. Zimbabwe has also imported and is at the moment, still what we call clinker deficit. The demand is higher than what the local industry can produce. But there, we are in close contact with the government as an industry and import licenses are provided when necessary and are revoked were no longer necessary. And Mokate will speak about that in more detail when he talks about Zimbabwe. And the decarbonization opportunities I have already mentioned earlier. What are those opportunities for us in addition to replacing coal-fired electricity by renewables. A big one is replacing coal by waste streams, something that I'm very glad that some of our directors are here. Bjarne is one of our directors from Europe. He knows very well that in Europe, many plants are replacing 90%, 95%, 80% of their coal by waste streams. We are in South Africa as an industry, not even close to double digits. Why is that? Not because the technology is not here. The reason is that there are no financial incentives that divert waste from waste dumps to industries like ourselves, also something that is being addressed with our government stakeholders. And we're hearing more and more that there is readiness for South Africa to start moving in the right direction. Another decarbonization opportunity, that we touched upon is to use less clinker in our cement products. Clinker is a semi-fabricated product that we grind down and then we add additional materials such as fly ash or slag or limestone. The less clinker, the less carbon sits in your product. And we have a number of initiatives, also we touched upon it, how we can blend our cement or our clinker further in order to decarbonize. So overall, a different landscape across those different markets. But of course, demand is the driver of all of it. And the demand in South Africa, as you see on this slide, is very muted. We saw a very small increase between FY '21 and FY '22, but basically flat. And as we had predicted, with the increase of inflation and the increase of interest rates, it will start to curtail also on this important retail market. Our overall demand for T cement has fallen by 6%, and we believe that to be a fair reflection of the overall market of South Africa. In other words, our market share hasn't really changed much neither up nor down. Often, we get the question, well, tell us a little bit about the level of first half versus second half. And I always say as a rule of thumb for South Africa, the second half of the year, the second half of our financial year doesn't have 6 months. It has 5 months because South Africa basically shuts down in the middle of December and wakes up again in the middle of January. And you see that reflected very well in this slide, except for the financial year '21, where we had the COVID impact in our first half. And therefore, we saw this demand spike coming in, in the second half. But usually, you see a decline in the second half, and we saw that as well in FY '23. A little bit stronger in FY '23, which is the signal of the fact that the market is declining in general. If we look at our first quarter of FY '24, so the period from 1 April until our prediction end of June, we still see a slight decline, but we do believe that we're starting to put them out. So we're not counting on growth -- major growth in volumes, but Njombo will pick up on a few interesting initiatives and work that we're seeing from the government in various parts of the country. If we look at our international markets, we don't see the same cyclical. So Zimbabwe nor Rwanda has a holiday from the middle of December until the middle of January. That's the bottom line of the slide here. You do see the impact of our plant shutdown in Zimbabwe. So we had a 16% decline of volume. That is against the market that has not declined. So we have lost market share in Zimbabwe, and we're now recovering that as we have our plant back online. In CIMERWA, we have maxed out the capacity of our plant. That's why we couldn't benefit from the growth in the region. So our volumes have grown 1%. When I come to CIMERWA, I will show you that we do expect to spend a little bit of CapEx additional on top of what we usually spend to give us a slight uplift in volumes in FY '25 because we'll do the project in November, December of this year. So it will not greatly impact immediately in this financial year. What have we focused on and what are the outcomes in a nutshell and we'll unpack those further? We've always said, let's focus on the things that we can influence. And what we can influence is largely related to how we operate and how we manage our costs. And I'm pleased to tell you that in the outcomes, the overall equipment effectiveness of our main plants have improved. And that is a key indicator because the moment you start running your plants well, other cost drivers such as electricity consumption and heat consumption will start to come down as well. I'm very pleased and a big thank you to Team PPC that we have seen a very good record in our safety performance in FY '23. Something that we don't like to celebrate because we know that we are still in an environment where risks are all around us. But it was good to see that on record, it was probably 1 of the best years in 130 years of history of PPC. I also think that the team has done well to minimize the margin squeeze that we had through the high cost increases, and we have seen different reactions in different markets, and we'll unpack those as we go through the countries. Our focus is to maximize the cash that we have within South Africa so that we can come back to a distribution to shareholders. And I'm glad that we have achieved that this year. We have not only reduced the debt further within South Africa, we have strong self-funding international businesses that are not demanding anything to come out of the group towards international subsidiaries. We continue to lobby alongside the industry. I have mentioned that in Zimbabwe, that is well managed. In South Africa, it has not yet led to the outcomes that we would like to see. And we will unpack some of the value-accretive projects that we have in decarbonization. This slide we showed to you in November 2021 or 2022, I think 2021, where we had a plan on how we move to decarbonize our product stream and on the bottom, you see how we're actually faring and we've gone backwards. So you might ask myself and my colleagues the question, "Hey, what is going on here? If this is a focus area, you're not achieving what you want to achieve". The reason that we've gone backwards is what I call product mix. So as we sell less in the retail market, and we sold relatively more in the industrial and construction, they use products that are having a higher clinker factor. And I mentioned to you before that clinker factor impacts the decarbonization. So this is not something that we are hugely stressed about because we know that we have projects in place that will start to kick in, and we're still confident that we will achieve the 680 kilograms of CO2 per tonne of cement in our financial year 2025. But it is an important one that we do not want to muffle away if we don't see that the arrow is going in the right direction. Overall, I think we can speak about a robust operational performance. The numbers here will be unpacked both by Brenda and later on country by country. We have now achieved what we can call a proper strong financial position. And that means that we have a leverage of roughly 1.3 to 1.5x of gross debt to EBITDA, we're actually slightly below that. Therewith, the Board has approved a new distribution policy, which again will explain -- will be explained in a bit more detail by Brenda, and we have an approval to initiate a share repurchase program for the amount of ZAR 200 million. It is important to mention that for us, this is not a one-off exercise. So we want to instill and continue with a disciplined capital allocation process, so that despite the difficult economic environment that is our backdrop, we will continue to distribute and give back to shareholders. On that note, I will hand over to you, Brenda, to take us in a bit more detail through all the numbers.

All right. Thank you, Roland, and good morning, everyone in the room and online. Just to give you a feel for the structure of the financial presentation, I'll touch on the consolidated group in terms of highlights, income statement, tax and the contributions from each of the 3 buckets or pillars that will refer to being SA Obligor, Zimbabwe and Rwanda. I will then spend some time on each pillar of operational group to analyze them in a bit more detail, including cash generation, and I'll then close out with capital allocation principles and capital expenditure, history and outlook. Moving on to the consolidated highlights. Revenue was virtually flat at ZAR 9.9 billion for the year, but with an erosion of group EBITDA margin, of 1.4% down to 13.7%. This margin erosion is all attributable to the SA Obligor Group, and I will cover this later. To add to what Roland said on the distribution of ZAR 200 million, we believe we are trading at a discount to our intrinsic value and that the share repurchase program will deliver value to shareholders. We're committed to following a disciplined trading approach and will only repurchase shares to the extent that market conditions are favorable. As a group, we remained cash flow positive, having generated cash before financing activities of ZAR 392 million in FY '23. This slide sets out the key line items on the consolidated income statement for continuing operations. Roland touched on it briefly, but just to remind you, we lost control of the DRC on 29 April and for the month of April, it was treated as a discontinued operation and then deconsolidated thereafter. In the operating profit line, both the SA Obligor and PPC Zimbabwe generated lower earnings compared to the prior period. And although CIMERWA and Rwanda showed improved earnings, 49% of this does not flow to HEPS and EPS. I'll cover each of these operating entities later in the presentation. Below the operating line, the group income statement is also affected by hyperinflation -- hyper-inflating Zimbabwe's results, which has occurred since 2020, as well as other significant non-cash items. We now deal with Zimbabwe later, we show the results in U.S. dollar rates -- parallel rates. The movement year-on-year in finance costs, investment income and profit on sale of [indiscernible] resulted in a positive variance of ZAR 108 million. However, there were also non-cash items that you can see itemized on the bottom right of the slide that resulted in a negative variance of ZAR 272 million. During the year, we took a total impairment charge of ZAR 145 million, ZAR 84 million of this related to an impairment at group level only of some of the price paid on the acquisition of CIMERWA. Of the balance of the impairments, ZAR 42 million relates to impairments across the ready-mix businesses due to market conditions. I'll deal with the tax charge, including the ZAR 195 million non-cash item on the next slide. Dealing now with the effective tax rate, it's better to unpack in rands rather than percentages, just given the size of the numbers. At the top of the slide, we show that the profit before tax of ZAR 93 million on the face of the income statement, we should expect to see a tax charge at 27% of ZAR 25 million. However, the actual tax charge is ZAR 242 million, being ZAR 217 million higher. The reasons for the extra ZAR 217 million are threefold. In the first instance, inefficiencies inherent in the PPC group structure. What I'm referring to here are items such as, operating in Rwanda and Zimbabwe, which have lower tax rates, but which also have anomalies such that certain unavoidable expenditure is not deductible. The second item is PPC Limited is a listed holding company and mainly received dividend income, results in a large percentage of its expenditure being deemed as not incurred in the production of income and therefore, not deductible. Lastly, the payment of withholding taxes on dividends received from Zimbabwe, CIMERWA and Botswana and management fees received -- withholding tax as the management fees received all add up as extra items in the tax line. Secondly, there have been once-off cash items resulting in a ZAR 23 million tax relief, but this will not reoccur. And lastly, there are noncash items amounting to ZAR 195 million. The 2 largest items being ZAR 130 million charge due to some hyper impacts and the associated nonmonetary loss and a further ZAR 83 million due to deferred tax assets not being raised on entities that are making losses. Moving on to the contribution from the different entities in the group. This slide depicts contribution to both revenue and EBITDA by each of SA Obligor, Zimbabwe and CIMERWA. The numbers inside the wheel depict FY '23 numbers and associated percentages with FY '22 comparatives being depicted on the outside. You can see that the most material contributor to revenue is SA Obligor at 67%, but this is diluted down at the EBITDA level to 42% in FY '23, largely due to the cost increases in South Africa not being recovered in price increases and CIMERWA's EBITDA increasing by 31%. I will now move on to discussing each of SA Obligor, Zimbabwe and CIMERWA separately. On the SA Obligor, this slide sets up the key metrics for the SA Obligor Group. Dealing with SA and Botswana cement first. Volumes were down 5.8% due to weak demand. Average selling prices increased by 8%, but negatively affected by 0.5% in product mix variance. In the above items, therefore account for the 1.7% increase in revenue for the year. Input cost inflation impacted absolute EBITDA and the margin deterioration from 14.5% to 11.7% and I'll give some color on this on the next slide. In materials, all of the business segments being ash, ready-mix and aggregates declined in volumes and the high fixed cost structure resulted in EBITDA similarly declining across all segments. Cost-cutting measures were implemented prior to the year-end, and Njombo will talk about this later, but the benefit of these measures will only be felt in the full year FY '24. Group services and other comprise group admin, PPC Limited and PPC international being a holding company of CIMERWA. This is what is represented in the segmentals in the financial statements. But on this slide, PPC International is excluded as it's not part of SA Obligor Group. Costs were well managed and are net of charges to both Zimbabwe and CIMERWA. Dividends received of ZAR 234 million in the current year from both Zimbabwe and Rwanda boost EBITDA to ZAR 804 million. This is relevant for the [ gearing ] ratio, which improves the cash available for distribution to shareholders from the SA Obligor Group. Return on invested capital, or ROIC, of 5.1% remains well below our target of exceeding our WACC of 15%. This is calculated on the SA Obligor total net assets, including the cost of investments in Zimbabwe and CIMERWA. Right, the driver of the SA Obligor group is SA & Botswana cement and its cost structure is set out on this slide. The absolute split of costs in the current year is depicted in the pie chart on the left as between distribution costs, being outward distribution cost of product, favorable production costs and other -- all other fixed costs, whether it's site or central. Given both distribution costs and variable production costs are affected by volumes, it is more meaningful to analyze these costs in per tonne distributed and sold, respectively, and this is shown in the bottom left table. As you can see, distribution costs per tonne increased by 9.7%, variable costs per tonne as 13.6% and total fixed costs decreased by 1.4%. Importantly, on the next slide, I will show you how the distribution cost per tonne and material components of the variable cost per tonne compared to external PPI. In the waterfall on the right, we show how the buildup of the revenue variance of a positive 1.7% that I've discussed previously against an absolute cost increase of 4% is the cause of the margin erosion of 2.8% due to the impact of the costs on EBITDA. As I mentioned on the previous slide, a deal here with some external PPI benchmarks. Coal costs comprise 18% of the variable production costs, an increase in FY '23 by 29%. This compares to the Witbank ex-works benchmark increase of 51%. 95% of the coal purchases in South Africa are under 2 contracts which have been competitively priced at the current period. The one contract for circa 60% of our coal expires in September '23 and the other in December 2023 from which dates we will be exposed to or enjoy the benefits of new market pricing and the contract renewals. Market prices have come down significantly since their peak in August 2022. But given where we are priced, we do not see material benefit, no risk from where we are now in the contract renewals. The benchmark for the distribution cost is a weighted SEIFSA and diesel benchmark, which increased by 20% in FY '23. By comparison, our distribution cost per tonne increased by 9.7% or 10% as depicted on the slide. The main reason for cost containment year-on-year below the benchmark increase is a reduction in average lead distance by 8.5% due to more industrial products being sold in Gauteng versus retail products in Mpumalanga and Limpopo. Lastly, electricity comprises 19% of variable production and our production cost and our internal electricity matched the NERSA increase of 10%. Having said that, we did produce more high-quality products, as you heard from Roland, this year compared to last year, which consumes more electricity. Absent other efficiency measures, our costs would have increased over and above the NERSA increase. Right. Moving on to SA Obligor cash flow. The waterfall graph on the slide shows the main drivers of the movement in cash from an opening balance of ZAR 147 million to a closing balance of ZAR 131 million. The SA Obligor generated ZAR 603 million from operations of ZAR 447 million after working capital changes. Cash was increased by the dividends from Zimbabwe and Rwanda of ZAR 234 million. This is now gross of withholding taxes after which material outflows were debt repayments of ZAR 280 million, finance costs of ZAR 110 million and capital expenditure of ZAR 257 million. As can be seen at the bottom of the slide, Net debt decreased from ZAR 1.1 billion to ZAR 800 million at 31 March 2023. I'll now move on to Zim followed by CIMERWA. Set out on the slide is what we believe the key metrics are for Zimbabwe. For good order, we've included the rands reported in the consolidated group results, but I'd like to focus on the dollar results reflected at parallel rates, which is how we manage the business. Mokate will focus on some of the operational issues later, but revenue declined by 6.6% year-on-year and EBITDA declined by 27% to $25.1 million. Although the rand margins show an improvement, the dollar margins were affected and declined to 21.4%. Capital expenditure increased from $5.9 million to $7.1 million, with the increases being in the maintenance and compliance categories of capital expenditure. Notwithstanding the lower EBITDA and higher CapEx, PPC Zimbabwe held $6.6 million in cash at the year-end after increasing its dividend from $7 million in the prior year to $10 million in the current year. To remind you, PPC Zimbabwe remains debt free. We report Rwanda in rands and it's worth noting the impact of the exchange rate on the 2 years and its discussion being an 8% appreciation of the rand against the Rwanda Franc in 2022 versus a 9% depreciation of the rand in the current year. Again, Roland will deal with operational matters in due course, but CIMERWA had a strong performance, with revenues up 29% in rand terms. Excluding currency impacts, Revenue also increased in Rwanda Francs by some 19%. EBITDA increased by 31% to ZAR 447 million, and margins were stable across the 2 years. CapEx declined to ZAR 46 million most of which was on maintenance. Less maintenance CapEx was required, given that ZAR 64 million out of the ZAR 65 million in the prior year was also on maintenance. CIMERWA has cash holdings of ZAR 160 million at year-end and gross debt of ZAR 265 million, giving the net debt shown of ZAR 105 million. The cash holdings are after a dividend of ZAR 172 million paid in March 2023. CIMERWA's ROIC has improved significantly to 17.6% and now exceeds its WACC in rands of 15.1%. I will just briefly deal with the cash holdings by geography at currency and then move on to capital allocation. You have seen the cash holdings in each entity on previous slides and the chart on the left just pulls it together. On the right, the rand equivalents are set out in the color-coded currencies. As can be seen with the exception of ZAR 44 million, all the group's cash is in hard currencies. The ZAR 44 million is made up of a combination of [ medicals ] ZWL and Ethiopian Birr. Lastly, just before I close is PPC's capital allocation model. First, we determine what the pot of available cash is for capital allocation. How we do this is to determine what cash is available from either cash holdings or debt facility headroom such that the utilization of that cash or drawdown of the debt would leave our gross debt to EBITDA in the range of 1.3 to 1.5x on a 12-month forward-looking basis. Step 1 is then to allocate capital in the first instance to sustaining capital, including compliance and maintenance capital. Thereafter, in step 2, expansion capital has to compete with returning cash to shareholders on 3 metrics: being targeted WACC, targeted ROIC and targeted payback. The expansion opportunity has to meet all 3 of the above targets, failing which the balance of available capital will be returned to shareholders. Set out on the right-hand side of the slide is the actual CapEx spend over the last 2 years and our outlook or forecast for FY '24, subject to the capital allocation model I have just described. In FY '24, the SA Obligor CapEx is stable compared to '23 included in sustain CapEx is CIMERWA's cooler project and the majority of the expansion CapEx is for Zimbabwe's fly-ash project. To conclude, looking forward, there are 5 focus areas. Cost containment will always remain a primary focus. Capital allocation discipline will be maintained with a focus on improving the SA obligor ROIC. Continued upstreaming of dividends from Zimbabwe and Rwanda to South Africa. Decarbonization initiatives to be implemented but only if value-accretive. And lastly, maintain the leverage at 1.3x to 1.5x gross debt-to-EBITDA facilitating continued distribution to shareholders. Thank you. I'll now hand over to Njombo to take you through South Africa and Botswana.

Thanks, Brenda. Good morning. I will take you through South Africa and Botswana. And as Roland has mentioned earlier, this is a bigger part of the business and the most challenging at this stage. As you can see, we have seen a decrease in volume, a slight increase in the revenue, but the EBITDA is significantly down. And so is our EBITDA margin impacted by the cost structure. We have spoken about the resilient coastal market, and this benefited mainly from the reduced imports and if you look at the coastal business, we're actually still driving towards the post-COVID volumes, which we haven't actually attained at this point in time but it has been a strong recovery in the coastal market. And the inland business has been a very different picture. If you look at our volumes, above 50% of our volumes are actually going into retail. And if you look at the economic conditions in South Africa at the moment, this is a very, very highly impacted in terms of the demand and the squeeze that consumers find themselves in. So that decrease in the spend in terms of the consumers has got a very negative effect in terms of the demand for the retail sector. On the Inland side, there has been some benefit on the industrial area and the construction but that mainly is on the technical products, so the high-value cement products in the inland and that has actually cushioned a bit on the blow in terms of the Inland and one thing is that the Inland is a very competitive area from the capacity versus the demand that is existing at the moment. Brenda did mention and he showed you a slide in terms of our cost structure, both the energy in terms of electrical and the thermal energy, in terms of coal, if you add that with the distribution cost, that constitute about 45% of your production variable cost. So that has had an impact in terms of the EBITDA and had an impact in terms of the input cost. Then one of the major impact is also the limited infrastructure projects. So we do know that SANRAL has released some projects, unfortunately, regionally in terms of the Inland, the impact you can't see directly because most of those are mostly concentrated on the KZN and the Eastern Cape, which is basically slightly unfavorable to us based on our location in the country. However, we've seen some green shoots in terms of the construction side, specifically on the Inland side in Gauteng. Now if we break down some of the focus areas that we have set for ourselves in the last financial year, we said we would like to get proper price increases in the market. And you can see our average selling price has gone up by 8%. Unfortunately, that has suffered in terms of the fact that we couldn't recover still the high input cost that has gone into our numbers. But we have stuck on to the biannual increase, and we intend to continue getting that biannual increase to try and recover the pricing in the market. And we've maintained our overall strategic market position. And as Roland mentioned earlier, we've managed to maintain our market share and we have to balance between the volume and the pricing in the market, even in this competitive environment. And in this case, the coastal market has actually done a very good contribution in that. One thing that we can be proud of as a team is the control of the input cost. And what we have put upfront in terms of like saying how do we manage without the price increase, but the inflation that has been facing us. And we were able to match the benchmark metrics and actually do better as Brenda has shown to us. And we were focusing on operational efficiency. We described the term OEE a couple of times. It's starting to pay off. When we start looking at this improvement of 3.6% on the OEE, basically, what it means is we've got 8 kilns that we operate in our business throughout the country. And 4 of them, we consider them the A team and the other 4 is basically the B team and the A team is basically graded on efficiency. They are most of the newer kilns and if you look at FY '23, we utilized for the total clinker requirement that we had, we got about 70% of our clinker came from the A team. If you look at the last financial year, 85% of our clinker came from the A team, which then it's clinker produced at a much better cost structure. And this is where it will trust through in terms of the improvement in our operation. We also have embarked on the decarbonization initiatives. And we've just completed construction of the Highveld blending plant. The advantage of this blending plant is the synergies that we are going to be able to draw from being able to pick up fly-ash from our [indiscernible] power station and bringing it into the Gauteng operations, but also being able to reduce our delivered price by moving from Highveld and access into Mpumalanga and Limpopo. This will have a positive impact in the reduction of the distribution cost that we have lamented earlier. This is the picture on the structure of imports in the market. And as has been stated before, we have benefited from the reduced import. So Roland mentioned 2 factors, which is the rand/dollar exchange and also the issue of the logistics. That is also 1 issue, especially applicable to the Durban port and slightly on to the Western Cape is the inefficiency of our ports. In this case, it actually works to our benefit. And you can clearly see the impact of that and specifically in areas like the Western Cape, we have managed to benefit from this situation. We continue to engage the government and Roland mentioned earlier that we've seen some results in other regions. And I think for us, it is important to keep the pressure on and keep the conversation going with the government. I think if we leave that opportunity to address some of these issues, we might just lose the momentum with the government and in terms of the imports. When we look at our materials business, and we've mentioned earlier that it was highly impacted. And I just want to give a picture around what materials business consists of. We've got the ready-mix side. And the ready-mix side, volumes are down just 4%. This business is basically mimicking the cement business in terms of where we operate, and it has faced similar challenges as the cement business. And as Roland mentioned earlier, this is our channel into the market. When you look at our ready-mix business, we've got a very strong presence in the Gauteng and that is the part of the business that is benefiting quite a lot to the construction stuff that is happening. And then we've got others that is outside Gauteng into the Mpumalanga and Limpopo area due to the lack of inactivity that area was highly affected. The price increases that we have managed to get are quite decent in terms in line of the cement business. However, the one biggest challenge that we still need to work on, on the ready-mix is the fixed cost ratio, which is too high, and especially when you start reducing in terms of your volume, the impact is very clearly seen as we go along. And we continue to optimize our footprint. And by that, we mean putting your plant in close proximity where the activity is. So if you recall last year, we were talking about moving closer to the [ R21 ] , where there's a lot of activity with the warehousing that is being built in that area, we've seen those plants performance a lot better than every other of our plants that are distributed throughout the country. And when we go to the ash business, it was very highly affected, partly because of the market dynamics and as we said, the retail side is being affected negatively in terms of the demand. The ash business benefits from retail because in the retail, that's where we sell the highly extended product, and the highly extended product once it is affected, then it reduces demand for extended products, meaning the ash that we extend with. And then also, we've experienced some significant supply disruptions. So when you look at Eskom. The Eskom's -- directly from Eskom and if there is any interruptions on the Eskom plant that straight directly affects our operation as well in terms of extraction of ash and the distribution of ash. So therefore, we have maintained a lean structure in terms of the cost structure of the ash business. And we believe that the ash business will continue to benefit with regards to the positioning of the Highveld plant. The aggregates business, I also want to give a picture of our aggregate business. When we talk aggregates, sometimes we think of it as a national footprint. Unfortunately, we don't have a national footprint on our aggregates business. Our aggregate business is based in the north of Pretoria and 2 operations very close proximity to one another. So when there is a lack of activity within the radius of about 70 to 80 kilometers, that will have a direct impact onto our aggregate business. And that's what we mean by limited localized geographic footprint. And that has been the situation in the Gauteng area. So we've seen volumes affected significantly on the aggregate business. And our one specific operation, which is Mooiplaas has a focus on a niche market which is other products other than just the aggregate stone, which we sell into the market, which was also affected and when we see a reduction in demand on the what we call CPM, concrete product manufacturers that had got a direct impact into the aggregates business. Roland mentioned earlier, the fact that Eskom load shedding has got an impact on the aggregate business. It doesn't just affect us on this niche product, it also affects the CPMs who are also interrupted by the Eskom situation. What we're busy with now is restructuring the business to reduce the fixed cost and basically converting most of the cost into variable and also mimicking the lower demand. We just have to have a situation where in terms of the delivery cost, in terms of the operation itself, we reduce the impact of the variable cost on to the cost structure of the aggregates business. Finally, I would like to give you some kind of flavor in terms of the areas that we will be looking into going forward. We intend to continue with the biannual price increases. Obviously, it's a lot difficult in the Inland region. However, we need to get our margins into a respectable level to be able to support the business. In the retail market, we have, as a result of the logistics costs and delivery cost into the business has seen a lot of -- or a slight erosion in some of the retail that we would like to participate in and we would like to recover that position in terms of the retail market with -- in line with our decarbonization. This is a lot of extended products that we have engineered to be able to get into those areas. And we're hoping that we will be realizing benefits from the materials business restructuring going forward. The input cost control actions for production and distribution, we will carry on with those. And we've done quite well in terms of managing the running of our 18 units and also optimizing in between the operations that remains our focal area. We are going to continue to optimize the industrial performance. As I stated earlier, the management of that has got a direct impact on absorption of this input costs. We've identified a few new applications and new markets for growth on the ASH volumes. And we will be pursuing that area in terms of the ASH business. And the decarbonization strategy, there's quite a few discussions that we are having at the moment with the government in terms of waste to energy and what is exciting is that there is now a bit of excitement in the government as well to try and do something about that. And we're talking about the legislative environment to allow for the waste to energy to start taking off. And we're hoping that by mid-to-end of the year, we will have seen some traction with regards to some of those projects. We continue to engage with the government on the aspect of import. And as I said earlier, whilst we haven't seen significant results, we know that they are engaging on the subject, and we're quite positive that we will realize some results from that. Thank you very much. I'll hand over to Mokate.

Thank you, Njombo. Good morning. As Brenda indicated, to assist started our financial highlights represent U.S. dollar parallel accounting because that's what we use to manage our business in Zim. What Brenda highlighted is that in FY '23, we've seen a 15.8% declining volumes on the back of a 60-day shutdown that we had in the first half to really position our plant to absorb the volume growth that you're experiencing in Zim. But on the revenue side, you see the deadline revenue is slightly lower and purely because we had a high single-digit price increase last year to cushion the impact of inflationary cost increases. Roland mentioned it, the Zimbabwe market remains stable and solid. Year-on-year, our volumes remained fairly flat in Zimbabwe but it's on the back of a high double-digit growth in FY '22. If you look at the growth in FY '22 was in excess of 30%, the domestic growth in FY '22. And this is driven by a lot of infrastructure projects. There's a very strong pipeline of infrastructure projects in Zim and also a very sound residential market. We're seeing retail being dominant in the market. There's probably close to 70% of our volumes still go through the retail channel, and we're seeing a very strong pipeline of infrastructure projects. And during the shutdown, we obviously experienced a decline in volumes. And those volumes were absorbed by the inputs. As Roland mentioned, we've got a very solid relationships with government, where there is a shortage, the issue licenses, import licenses and when the domestic demand picks up, they will grow those licenses. And 2 things happened. At a time when we had a shutdown, 1 of our competitors also, they had a major issue in Harare and have resumed production, and they've also commissioned a new milling plant that enables them, obviously, to convert Clinker to cement. However, Zimbabwe market remains Clinker deficit. As Roland said, in Zimbabwe, milling capacity is double Clinker production capacity. If you look at our Clinker production capacity in Zimbabwe, it's probably 55% to 60% of the domestic market and the rest is the other players in the market. So there is definitely an issue of Clinker supply into that market. What is very good about that market is we've seen increasing trade in foreign currency, which is really helpful for us to sustain our business from a CapEx and OpEx point of view, but also from a distribution point of view to our shareholders. It allows us to pay dividends to our shareholders in South Africa because of increased liquidity and availability of foreign currency. Secondly, what Roland mentioned, Power has been a major issue in Zim in the second half. The first half, yes, we had a 60-day shutdown. Our volume sales, obviously lower than the prior year. We imported Clinker to time and supplement domestic requirements. But in the second half, we had major issues with [ power ]. And I always say, the Southern African power articulation is interconnected. Any issues with Eskom in South Africa that take major issues for us in Zimbabwe, and we've seen increasing number of power interruptions in Zimbabwe in the second half. That obviously impacts on our industrial performance and our ability to produce additional Clinker required in the market. And going forward, we still secured extensive volumes through the infrastructure projects, we remain quite strong in the retail segment. And we've also secured additional Clinker supply to make sure that we are able to capture upswing in the volumes in the market. When you look at EBITDA margins, you see a little bit of erosion compared to prior year, and this is mainly due to one-off costs that we incurred last year to execute this major shutdown last year. Looking forward, as Roland said, our market share has recovered. If we look at the first quarter, we fully recover to the levels where we've operated before. Clinker production capacity has stabilized. We continue to see increase to see increasing transactions in U.S. dollars. We actually even reaching levels above 80% where trading happens predominantly in foreign currency. What is good is Hwange 7 and 8 has commissioned. It's a 600-megawatt thermal power plant in Hwange synchronized with the grid. In fact, our leading article yesterday where there's a positive messaging coming out of Zim that power has stabilized quite significantly. We see it on our performance of the plant we're having less and less power interruptions. But that comes also with another benefit in the fly ASH if you recall, we've always mentioned that we secured ASH that will come out of Hwange 7 and 8. And we've started testing the ASH coming out of the power plant and other results are positive. As Brenda mentioned, we will start activating our projects to first handle the ASH to Rwanda and process the ASH at our Bulawayo factory. That itself gives us obviously additional volumes because we can actually dilute the Clinker that we have extensively. It opens up our revenue line, but it also has got a cost impact and also decarbonization effect that is in line with what we've committed to as part of our TCFD announcement. And as I said, we've also secured Clinker supply. And this is really to make sure that we can close any gap that may result from our domestic competitors. And this is important because it allows us to allow the government not to open products for cement inputs. The minute there is a shortage that creates that opportunity for cement imports, and it takes time to close that gap back to normal. And one good news, we continue to pay dividends. In June, we declared at the port of Zimbabwe declared another $4 million of dividends that will be processed in due course. I thank you.

That leaves CIMERWA for me to comment you and then to close out and open for questions. So if we look at Rwanda, we'll not talk through the numbers because that was done by Brenda, Industrial landscape overall is favorable. Strong demand on the back both of retail, but also government-backed projects. Rwanda is building, for example, a new airport where we participate. They are completely revamping one of the big sports stadiums in Kigali in which we participate. And it is also helpful to have the government as your local partner because most of these projects, obviously, there is a bidding and there is procurement, but they favor CIMERWA's product because of quality, because of availability and because of the fact that it is the only local manufacturer. So they will take a long time before they even consider working with imports. Another element is that these kind of big projects, you want to have a supplier that is reliable and as close as possible to your project. You don't want to have a supplier that has to bring in products from 1,500 kilometers across various borders. So we expect that, thats domestic as well as the export potential will remain. I did highlight to you that we have increased regional competition in the area, and we'll touch upon our plans on the next slide. How it played out in FY '23 is that given these market dynamics at the moment, CIMERWA was confronted by steep increase oil price, for example, they implemented a 17% price increase from one day to the other. And there with your margins are maintained. Now obviously, the market dynamics in CIMERWA and in Rwanda have enabled us to maintain those margins, and we see that same pattern also for FY '24. When I was speaking to you in November last year, we said there was a big increase in the first half. Don't expect that to continue in the second half because we knew that we had our annual kiln shutdown. And there with the overall volumes for FY '23 have increased by 1%. I touched upon the key government projects that we have secured already, and we have rationalized further our product portfolio to make sure that we get the most cement out of the clinker that we can produce in our plant. Looking forward, improving industrial performance remains an area of focus. There has been a steep increase of the operational equipment efficiency in Rwanda. Thanks also to the support of the team that Mokate lead here out of South Africa. They are not yet at the levels of efficiency and effectiveness as our South African A team though. So we still have space to get a little bit more Clinker out of that plant. Very important for us is that we remain with a clear mindset also in a good market and in a good company that is now paying dividends that cost containment remains a #1 priority. A business like ours, you will always be successful if you are the lowest cost producer into the market. So cost containment is an area of focus in all our businesses, and I put it specifically on the slide, as in CIMERWA, we are driving that program very hard this year. In order to make sure that competitors that are starting to come up in the region do not have an easy way to convince our customers that they should switch. We are bolstering our route to market, making sure that the relationships we have with our customers are based on long-term mutual benefits. I mentioned to you the importance of securing new limestone reserves in order to have an operation that can go beyond the 15 years. Brenda touched upon the fact that we had to make an impairment on our CIMERWA assets at group level. That has come from the fact that we do a discounted cash flow based on the life of mine. So at the moment, we secured another 50 years of limestone, we can look at that business completely differently again from a financial valuation perspective. The other points are similar to what Mokate said, we want to continue with dividends also this financial year and reduce the carbon footprint. That brings me to the conclusion in summary. This slide you have seen before, I think our investment case remains well poised as it says here in the subtitle, performance and returns focused, a leadership position in the markets where we operate with a solid asset base beyond that. Optionality, especially in South Africa, where we still have a number of kilns that we do not yet operate because the demand is not there, the moment that demand is there, we are the only producer that in a short space of time and without allocating significant capital can increase their volumes significantly. We believe that we have a value accretive pathway to decarbonize our business, and we look forward to implement not just the Highfield blending plant, but also some of the other initiatives. After many years of hard work, we have now achieved a gearing level that we're comfortable with and that allows us to continue with a capital allocation in the form and shape that Brenda explained and give back to our shareholders. And although I don't like to speak about myself and ourselves, I do believe that we can call ourselves an experienced, focused and motivated leadership team. Looking forward, touching a little bit on the measures to further improve our OEE to reduce cost and carbon intensity, we continue with it. Sometimes people ask me, well, what more can you do? And in our business, there is always that a little bit more that we can do. Currently, what we're focusing on is, for example, our procurement expenses. Are we buying at the right price at the right terms? Is there again something that we can take out of that particular space? We talked about the introduction of alternative fuels to reduce our coal consumption. That is not just happening in South Africa. That is also happening predominantly at the moment in CIMERWA, for example, where we see that we can increase our alternative fuels are up to 15% coal substitution, a major driver to contain our cost. Our strategic focus remains on our Southern African footprint, Zimbabwe, Botswana and South Africa, whilst, of course, nurturing and making sure that CIMERWA still continues to perform and return cash in the forms of dividends to South Africa. I mentioned to you the optionality that we have in South Africa, both financially and operationally, we are ready to respond to any uptick and upswing that we see in our demand. And we believe that even in today's economic environment, our first time since a long time, ability to distribute to shareholders is not a one-off exercise and will be repeated also next year. That concludes our presentation. I would like to invite my colleagues to take their respective numbered seats in the front and then open for questions from the audience as well, of course, as our participants online, which are managed by Louise in the back.

Questions from the audience here. I'm not looking at my Board colleagues, they grilled me last Friday. Otherwise, online questions, Louise?

We have 2 questions online. The first question from [ Luke Bredel ] of Prima Research. He asked Njombo to please provide clarity as to how the cement business did well in the Western Cape. He says imports declining by 81 kilotons in Western Cape seems immaterial.

Am I on?

Yes.

Yes. I think the first thing is there was an uptake in terms of the demand in the Western Cape. We've always said the Western Cape was very slow coming back. If you look at our numbers last year, in post-COVID inland actually has seen that upstage that we have shown. And most of it, the bulk of it was actually in inland. So there was a huge recovery in terms of the Western Cape, and we were able to take advantage of those volumes. And obviously, not getting the imports coming in, it gives you a window to be able to increase pricing in the market. And I think the team in the Western Cape was able to take advantage of that.

Your next question comes from Paul [indiscernible] of [ Rosendal ] Capital. Please comment on the Lafarge, Afrimat transaction as now you have a well-funded best-in-class competitor. Did PPC not miss an opportunity to buy that asset to expand your aggregates business and potentially close down those old inefficient Lafarge kilns.

Yes, I'm happy to take that, Paul. So first of all, I think what we've seen from that announcement, if you just look at the numbers that were described to Lafarge's operational performance, you see the challenges that the industry is facing and the significant decline of EBITDA of Lafarge in their 2023 or 2022 numbers. Secondly, SPPC, we have a lot of respect for Afrimat . They're in a well-known South African player in the construction materials industry. I have actually sent a little text message of congratulations and welcoming them to the cement industry. Cement industry is, of course, slightly different. I have no doubt that they will be able to fix the Lafarge cement assets and the aggregates and ready-mix assets will be a welcome addition for them. I believe that it is good for the industry to have a South African player like Afrimat as part of the cement industry. It is always good for the cement industry to have strong, stable players in the market. And like-minded companies to PPC such as Afrimat , will help us to voice towards the government to make sure that we have a strong local manufacturing future. So yes, we say welcome to Afrimat best-in-class in the cement industry, we still believe that we are ahead, but we're looking forward to the competition.

Thank you, Roland. We have a similar line of questioning from Chris Reddy of All Weather Capital. He has asked you to comment on the competitive environment in SA in light of the corporate activity we're seeing. And if there's scope for further consolidation given the excess supply.

Commented on what has been confirmed. We do know that there are other industry players in cement that are also looking for selling their assets. We know for affected NPC out of the is actively looking for buyers. We were aware of Lafarge. It is often rumored that AfriSam might not have long-term owners after the debt restructuring. Consolidation is something that can create value. We believe in that. We've always said that consolidation doesn't fix the demand. So the demand is driven by macroeconomics. So even if you consolidate, you will not suddenly see an uptick in the month. However, there are certain benefits such as, for example, optimizing distribution networks that you can benefit more from if you combine existing players. We are not looking at consolidation to close down immediately factories. This is also something that is probably going to be difficult given the high unemployment and the view of the Competition Commission on these kind of activities. Ultimately, consolidation depends on whether the buyer and the seller can find each other on attractive valuations the way it was the case for Afrimat and Lafarge and the future will tell whether there will be other opportunities that will come to life.

Thank you, Roland. The next question comes from [indiscernible] Exactly how much capacity in South Africa does PPC utilized at the moment? And how long would it take to ramp up to full capacity? What opportunities are there that you can ramp up capacity utilization and what would be the trigger for such capacity utilization?

Njombo?

Well, we operating average around 75% we obviously, it's seasonal between 75% and 80%. I think the last part of the question is the economic situation in terms of the demand, and that's what can unlock the South African environment.

And in addition, Njombo, how much would be the full B team capacity as well? Because the 75% to 85% is predominantly your rating?

That's the rating, yes. That's the capacity that's available. Like I said, we ran that capacity. It provided 85% of the Clinker required. So we still have the capacity to close that gap. But obviously, for us, most important is to note that we still have the capacity, and that capacity can only come back when you can be able to complement it with the demand.

The next question comes from [ John Aronoff ] SBG Securities. Can you please comment on your interaction with government on the imposition of tariffs to import cement? Is there support here?

Our government has been disappointingly very slow, but we continue with the conversation with the government with regards to the imports. And lest we forget that there has been movement in terms of local designation that we were able to get. And also remind that currently, we had the extension on the Pakistani imports, which has been done by the government in support of our application for the sunset review. However, the comment that Roland made earlier that the Vietnam is product is still coming into South Africa. And that's why we wanted the global tariff application, which we are still busy with and we are engaging with the government.

The next question comes from Luke [indiscernible] from Primary Research. Can management provide an update on the progress of the new blending plant, please?

Well, as I said earlier, the Highveld plant is under commissioning at the moment. We had a little bit of delay from the permitting in terms of the government side or on SABS on NRS for us to be able to distribute the product. We've done all the testing and we should be going in the market by the end of July with high felt products.

The follow-up question from John [indiscernible] from SBG Securities. Regarding consolidation, surely, you will not be allowed to acquire an SA due to your market share.

I don't necessarily agree with that view. I do think that studies that we've made on potential consolidation plays and combined market shares, we do not think that, that is a major issue.

We have a question from [indiscernible ] from PPC Zimbabwe. What is our current gearing ratio? And how does it align with our growth plans and strategic objectives?

So the PPC looks at its gearing ratio is on that metric of gross debt to EBITDA simply because of the noise of the balance sheet. It's just not, we believe that's the most appropriate one also what we agreed with our bankers as a yardstick. So our current gearing ratio, that number is 1.22% , and therefore, it's below our target range of 1.3 to 1.5 , which allows us the distribution.

Another question from Mark Narramore of Excelsia Capital. With Rwanda debt level is a lot lower, could the dividend be higher in 2024 versus 2023.

Yes, I'll take it. It's a logical level of thinking. There's just one, however. The dividend declared in March was a maiden dividend, and there was quite a bit of cash buildup because CIMERWA could not distribute a dividend earlier because of the assessed tax loss that had to be consumed. So don't expect that there will be a sudden big jump in the dividends because there was a buildup of cash that we released. So look at it more through the sustained EBITDA generation, capital requirements when you make your models.

Thank you, Roland. Just a reminder to those on the webcast to please submit your questions on line. Perhaps we can check if there are any questions from the floor. There don't appear to be any further questions.

If there are no further questions, then I would like to thank my colleagues for the presentation. I would like to thank all of you online for having taken the time to listen to our FY '23 results presentation. And to all of you here, thank you very much for coming out to the JSE. Please allow me to invite you for a drink outside. Thank you so much.