Good morning. As many of you know, this December marks my first anniversary at PPC. It has been an intense and a dynamic ride so far. Today, you will hear about our first-half results and the progress we are making on our turnaround strategy. We are starting to see some incipient but promising results, which naturally are very encouraging. I want to extend a warm welcome to all of our investors, employees, members of the media, and all other stakeholders who have joined us today. We appreciate and value your support and interest in PPC. Finally, I would like to express my gratitude to PPC internal and external teams who have worked diligently the past days for us to be able to present our results today. After my introduction, Brenda Berlin, our CFO, will take us through the key financial metrics.
I will follow with the business review and close with the strategic plan and outlook. Last time we met for the year-end results presentation in June, I outlined our comprehensive assessment of the organization. Our starting point was to clearly understand why PPC was in the state that it was in. There was a perception that external factors were the main drivers in the decline, and the impact of internal performance and leadership focus were underestimated. Our understanding is different. Certain other players perform comparatively better in the same market conditions while PPC declined. The deep dive that we carried on has helped us to understand the severity of the challenge, its root causes, and the change that needs to be made. These internal gaps were significant, and they have had a serious impact on the performance of the company for years.
We needed to shake up the way the company had been doing business. In shaping our priorities, we needed to combine a short-term focus to urgently address the gaps while building up a strategic turnaround plan. In this process, we confirmed that while we face significant challenges, we also have a huge opportunity ahead of us. It's all about unlocking the potential we have within the organization. That is the core of our turnaround plan, Awaken the Giant. It defines our strategy, built on the company's strengths. It is a simple and bold plan to deliver growth and secure the sustainability of the group onwards. Accordingly, we have already translated our strategy into actionable plans that I will address in the last sections of today's presentation. Communication is and will continue to be critical. Being transparent and honest with all internal and external stakeholders is a must for this team.
Change is already visible. This is extremely encouraging as we are getting traction on some of the actions ahead of the implementation of the turnaround plan. This initial traction is already reflected in the second quarter of the current financial years. In our strategic process, we can clearly identify three interconnected work streams, which are being addressed at the same time. As I mentioned, after the right diagnosis, we are in the process of closing the gaps with clear progress on this front. In parallel, we have defined the turnaround plan, which has been approved by the PPC board. We have a clear roadmap and a mandate to execute. I also have the board's support to pragmatically address the challenges that we will face on this path. We are also actively working on strategic projects and alternatives that will further strengthen PPC's competitive position.
It's too early to disclose some of the projects and alternatives under study, but we have not stood still and only look at in-house opportunities. The projects being assessed include growth opportunities, optimization of the current assets, and energy efficiency upgrades. Alternatives that can redefine the shape of PPC are also being considered. Since day one, I was convinced of the potential of a PPC turnaround. My confidence now is even higher. Despite the complexity of the process, we will create a more efficient organization that is better equipped to meet our new objectives. This is vital in an environment that is extremely competitive, where being lean and agile is not just beneficial. It is essential. Let me talk about the key highlights before I hand over to Brenda. The standout highlight for us is that we were able to improve from negative Q1 to growth in Q2.
While we focus on many areas in the first half, discipline delivered early results. Discipline in cost control has driven our EBITDA margin growth across all segments of our business. Through taking a strong stance on all costs in the business, we have managed to maintain and even enhance our profitability despite the tougher market. Discipline in stock control has improved our working capital.
By managing our inventory strictly, we have not only maintained efficiency but also strengthened one of our essential metrics: free cash flow generation growth. Discipline in prices has enabled a slight revenue growth in South Africa and Botswana despite the volume decrease. Briefly, some more highlights. I am pleased to report that our South Africa and Botswana group EBITDA is on the rise again. In our material business, each of the areas delivered positive EBITDA. In Zimbabwe, cost containment resulted in EBITDA margin expansion. I will hand over to Brenda now to cover the numbers. After that, I will lead with the business review and outlook.
Thank you, Matias. Good morning, everyone. This slide gives an overview of the key features of the overall group results. Revenue is down 4.2% to ZAR 5.1 billion. EBITDA margin for the group increased by 0.6 percentage points to 15.7%. Headline earnings per share increased by 10% to 22 cents. In terms of capital allocation, the group returned ZAR 521 million to shareholders by way of a special dividend and spent ZAR 186 million on CapEx. Cash flow from operations before financing activities increased 36.2% from ZAR 367 million to ZAR 500 million. Please note that the 367 million in the comparable period has been adjusted to exclude the Rwanda operations cash flows. I will now deal with some context to the results before moving on to some analyses of both the group and its components.
On this slide, I would just like to remind you that we manage the business in two distinct pillars, being first the SA and Botswana group, comprising cement operations in both jurisdictions, the materials businesses in South Africa, and group services. The second pillar is the cement operations of PPC Zimbabwe. From a cash perspective, two dividend payments were made during the period, being the final dividend of ZAR 214 million in respect of the year ended 31 March and a special dividend of ZAR 521 million, which amounted to 66% of the net proceeds PPC received from the sale of its 51% stake in Cimerwa in Rwanda. The South African Botswana group refinanced its borrowing facilities during the period to establish a more balanced tenure and to secure more favorable terms given the performance of the business.
There was a working capital unwind in the South African Botswana group, but also partially by an inventory buildup in Zimbabwe. There was a change in the methodology used by group services to charge management fees to other group companies, and a further change effected on 1 October 2024. I will deal with this later in the presentation to show more meaningful represented segmental information. Moving on to the consolidated income statement, this slide sets out the key metrics of the income statement. In both the current and comparable periods, PPC Zimbabwe's results are in a functional currency of US dollars. Sorry? Back?
Oh, there we go. We beg your p ardon. I will just touch on a few items on this slide, as I will, as I said earlier, deal with each entity in a bit more detail later. There were no impairments taken in the current period. The impairment of ZAR 53 million in the prior period relates to the mothballing of the Jupiter Milling Plant in May 2023. Finance costs, net of investment income, reduced significantly to ZAR 22 million from ZAR 50 million in the prior period. This was due to a combination of lower debt levels and higher cash balances. The effective tax rate for the current period is 33%, of which 31% is the effective cash tax rate. This is slightly below the sustainable cash tax rate of 33% guided at the 31 March 2024 year-end.
The prior period effective tax rate was 24%, was positively affected by a once-off non-cash benefit of unwinding deferred tax due to the change in the functional currency of Zimbabwe. This slide shows the contribution of each of the two business units to revenue and EBITDA for the period. The comparative contribution for each business for the prior period is set out in boldface on the outside of the pie charts. As you can see, the contribution from each business unit has remained relatively stable over the two periods, with the SA and Botswana group contribution to revenue increasing from 67% to 70% and its contribution to group EBITDA increasing from 46% to 49%. The pie charts are just intended to give you an overall view of the relative sizing of each business before moving on to each of them.
As I mentioned briefly earlier, I would now like to deal with more representative segmental information. Two events drive the representation. First, effective 1 April 2024, group services ceased charging management fees to group companies. Cement SA, the legal entity housing South African cement operations, was significantly affected by this. The consequence is that in the statutory segmentals, the SA and Bots cement segment shows a significant decrease in admin and other operating expenses, with a portion of this reflecting in the increase showed in the group services and other segment. Secondly, with effect from 1 October 2024, all group services employees and assets were transferred to Cement SA. Net admin and other operating expenses in group services in the current period amounted to some ZAR 44 million.
By reallocating this amount to the South Africa Botswana cement segment, results in a representation of results that is comparable to the prior period and, moreover, in line with what will actually happen in future. As you can see, the group services and other segment is now more correctly described as PPC Limited, PPC Limited and other, as costs associated with the listed entity will remain in this segment. What can also be seen is the more correct representation of the cost discipline and admin and other operating expenditure in the South Africa Botswana cement businesses, which show these costs decreasing by 14.8% period on period. The consolidation of the group services function into cement will also allow more efficient delivery of centralized services and further cost rationalization. I will now deal with the SA and Botswana group contribution.
Matias will deal with the operational performance of each of the components in this group later, so I will just touch on some key features. The South Africa Botswana cement revenue is up by 1.5%. This was a combination of price increases and product mix, offsetting a volume decrease of some 5% in a market where national sentiment has not yet translated into infrastructure projects. The materials businesses, especially the ready mix and ash businesses, continue to experience difficult market conditions. There was a significant focus on cost containment, which resulted in all three materials businesses generating positive EBITDA in the current period. PPC Zimbabwe continued to declare dividends, and PPC's share of the $4 billion dividend declared in September 2024, amounting to ZAR 70 million, was received early in October.
In the refinancing of the borrowing facilities that I referred to at the beginning, the key gearing metric was changed from gross debt to net debt to EBITDA. At 31 March 2024, the metric of net debt to EBITDA was 0.2x , and at 30 September, 0.7x , due mainly to the dividends declared and paid during the period. To remind you, the stated target remains at 1.3 to 1.5x . I will now close off with the South Africa Botswana cash flow and then move to Zimbabwe. Set out here are the key cash flow items for the period. The core businesses in the South Africa Botswana group generated ZAR 329 million in the six months. This is almost ZAR 100 million more than in the comparable period last year.
On the right-hand side of the slide, you can see that we used ZAR 293 million to repay the old debt facilities and lease repayments and distributed gross dividends to shareholders of ZAR 735 million. The above resulted in the South Africa Botswana group moving from a ZAR 14 million net cash position at 31 March 2024 to a ZAR 416 million net debt position at 30 September 2024. Moving now to Zimbabwe, this slide shows the results in US dollars, which was the functional currency for both halves. Revenue was impacted by lower volume sold due to the resumption of imports in the current period. However, the associated lower clinker imports and other cost containment measures more than offset the power increases in the current period to leave EBITDA down $1 million or 4.2%. EBITDA margin improved to 27% in dollar terms.
Capital expenditure increased by $1.7 million, largely due to two kiln stops in the current period for maintenance. This compares to only one short stop in the comparable period. PPC Zimbabwe remains debt-free and had $11.5 million on hand at 30 September, $4 million of which was paid out in dividends shortly after the period end. 97% of the cash balances are held in hard currencies. To close, I will deal with capital allocation and returns. Our capital allocation model remains unchanged. To remind you, we first allocate available cash to capital expenditure required to sustain the business, being largely maintenance and compliance CapEx. Thereafter, any potential expansion CapEx has to compete with returning cash to shareholders by meeting the required weighted average cost of capital and return on invested capital hurdles, as well as the targeted payback periods.
On the left-hand side of the slide, the actual CapEx spend is depicted. The overall group spend was slightly higher than the prior period at ZAR 183 million, mainly impacted by the increased Zimbabwe spend that I dealt with on the previous slide. At the year-end results, we guided a total of ZAR 400 million-ZAR 450 million for the full year, and this remains unchanged.
Net dividends paid to shareholders in the current period, being the final dividend for FY 2024 of ZAR 203 million, being the flow-through of the dividend received from Zimbabwe and the special dividend of ZAR 500 million due to the sale of Rwanda. The capital allocation model will be reapplied at year-end to assess dividends to shareholders. Lastly, the ROIC continues to improve and is 7.1% for the rolling 12 months to the end of September 2024. This is still well below our WACC and remains a key financial metric on which our future success will be measured. Many thanks, and I'll now hand you back to Matias.
Thank you, Brenda. Before we dive into the business review by segment, I want to take a moment to set the stage for some key points of the first half of the year. In our FY 2024 results presentation, we highlighted that last year financials were quite different between the two halves. In the first half, we enjoyed strong growth thanks to beneficial external conditions or tailwinds, while the second half was marked by more normalized market circumstances. Let me explain what changed period on period. In South Africa, unlike the previous year, due to different pricing behavior by competitors, the price increases were restricted to below cost inflation. In Zimbabwe, the ban on imported cement that benefited us in the previous period was lifted in October 2023.
Despite this deteriorated market context in both countries, I am pleased to report that our half-year EBITDA for FY 2025 is in line with the previous year. In addition, we have delivered solid free cash flow growth and an increase in our EBITDA margin. I want to take a moment to discuss the current economic landscape in South Africa and what we can expect moving forward. I have previously expressed my cautious optimism, especially in light of the recent formation of the government of national unity. This new administration brings with it a renewed sentiment regarding economic growth, and particularly in the infrastructure sector. Looking ahead, we expect to see growth in the private sector confidence, which will positively influence the construction market. We also anticipate an increase in public sector tender activities, which we believe will drive growth in 2025.
Coming back to us, and as we have already mentioned, we have made significant progress in reducing cost. We are rolling out several initiatives that will impact on both variable and fixed cost. These changes are being implemented gradually, allowing us to manage and balance the impact of inflationary pressure on our input cost. Earlier this year, we signed a strategic cooperation agreement with Sinoma Overseas. As many of you know, they are the world leader in cement equipment and engineering. This partnership aims to help us to improve efficiencies in our cement operations. It also allows us to review our key capital expenditure plans, focusing on areas for improvement and potential expansion. We believe this collaboration will strengthen our operations and position us for future growth. Currently, the Sinoma technical teams are performing a deep dive assessment across all our cement sites.
Lastly, due to the new flattened structure and early days' organizational culture change, we are seeing better communication and collaboration across the teams, an improvement on ownership and accountability mentality, and more agility in our decision-making process. The heart of this turnaround lies in our people. Let me deal with each segment results and operation highlights, starting with the South Africa and Botswana group. To see this segment EBITDA return to growth is significant because it has been in decline for years. Revenue was almost flat at 0.5% growth, reflecting the ability of pricing to offset the lower sales volume. In a relatively stable market, our volumes' decline was primarily driven by the retail segment in a context of higher price aggressiveness from competitors. Differently, in the industrial and construction bulk segment, we were able to grow sales volumes.
Below the top line is where this period's performance starts to be different. We register EBITDA and EBITDA margin growth, driven by lower cash cost, mainly in the general administrative expenses, that were reduced by 15% period on period. Variable and fixed costs were kept under control, even with the electricity tariff increase of 13%, due to better control of overtime, a slight improvement in cost substitution, and higher extensions usage. On the other hand, our costs were penalized by stock consumption versus stock build-up in the previous year, especially regarding clinker stocks. The higher inventory control, mainly due to better working capital management, is reflected in the free cash flow generation, which increased in excess of ZAR 100 million in comparison to the prior period. The material segment also reflects a quicker-than-expected results recovery.
In a more adverse context, with additional pressure on volumes, the EBITDA results doubled to ZAR 28 million in the first half of FY 2025. Looking firstly to the ready mix business, following a headcount structure downsize and an adjustment of the operating model that converted the fixed cost structure to variable cost, the business was able to sustain a 24% reduction in volumes while still growing in the EBITDA line. Having this flexibility is key to adapt the business to the tender seasonality that characterized the construction sector while remaining better prepared for volume growth. In the ash business, total volumes were down period on period, but were more than offset by higher price and better sales mix, resulting in marginal EBITDA growth. The aggregate business presented a complete turnaround, from losses in H1 FY 2024 to a positive EBITDA in H1 FY 2025.
The improvement was across the board: volume growth, higher pricing, higher product value sales, but also cost containment. Zooming into Zimbabwe, it is important to remember that tailwinds in the first half of FY 2024 that I mentioned before, namely the ban on imported cement that lasted until October last year. This meant that in comparable period, PPC had the advantage of trading in a market without the presence of our main competitor. This situation has been normalized since the end of last calendar year, with imported cement recovering the second position in terms of market share. Naturally, there was a market share adjustment between the two periods, reflected in a 9% lower sales volumes. As we're experiencing in South Africa, the results have started to turn in Q2 of these periods.
This is mostly being driven by lower cash cost due to lower clinker imports, improved logistics costs through contract renegotiation, and G&A savings. Renegotiation of coal and bulk prices, another input cost, plays also an important role balancing a higher maintenance cost due to an extended kiln stop and the power tariff escalation of 76% implemented by ZESA in October and November of 2023. The EBITDA margin growth to 27% is a reflection of these actions, while EBITDA, although recovering, is down 4% or $1 million year-to-date. Having taken you through the financials and operational highlights of the period, let me take you into the strategic plan and outlook. As I mentioned, the wheels have started to turn, and we are making progress.
I want to take you through the key steps of our Awaken the Giant turnaround strategy, where we have progressed and where we are currently focusing on. I will detail each of these areas in the next slides. Firstly, we are well advanced in step one of our strategy. This phase, as mentioned, was about rebuilding and addressing the fundamental gaps that the organization had to be better prepared for the turnaround process. We cannot overstate the severity and size of the issues we have found. Although it was not easy to discuss this internally, I have been pleasantly surprised by the general level of engagement from our team in this process so far, and how committed they are on rebuilding this iconic South African company. In this stage, alongside the organizational changes, we have recruited highly specialized managers to fill key positions that supplemented existing talent in the company.
I want to emphasize the caliber of the team that is currently driving PPC. Step one has been our top priority in the first month of this new chapter. We needed to create a strong foundation that allows us to execute the turnaround. This takes us to step two. It is a crucial phase because it deals with the implementation of our Awaken the Giant turnaround strategy. In our previous presentation, I showed the three pillars of the strategy that have now been developed into a plan with key directives and a roadmap to be followed. Efforts from step one and early stages of step two are already visible in our half-one results. Gradually, the impact on our financial results, margin, and free cash flow generation will get greater traction. Change will not happen overnight. It will take time, but it will happen.
Simultaneously, we are studying and developing different processes and strategic options that will support PPC competitiveness going forward. Let us look in more detail at the three dimensions of our plan. In our diagnosis, we identified several gaps that I will categorize into three main areas: wrong fundamentals, bad corporate habits, and incorrect focus. These gaps can be traced back to the previous complex organizational structure and internal governance. There was a duplication of roles, excessive management layers, and a silo mentality that hindered accountability and created complacency.
The lack of spending control led to significantly high overhead costs, way above any international or local benchmark for the cement industry. On top of this, although we have an extraordinary asset base and competitive equipment, they have been managed against low standards for years. The starting point to fix these gaps was a self-assessment collective process.
Internal communication and walking the talk approach were key to instill confidence across the organization. We will win together, or we will lose together, although losing is not an option. It allows us to address the root causes of these issues rather than just treating the symptoms, and that is exactly what we have set out to do. To effectively tackle this gap with urgency, we have adopted a pragmatic approach, which includes replacing certain key positions with experienced managers and experts, providing internal training and workshops to upskill our teams, and implementing consequent management when needed to ensure accountability. We have simplified and centralized our corporate structure and built up the vital management information and business KPIs necessary for better decision-making. In our business, having accurate and timely information is critical.
We need to understand our costs at a granular level, per cost line, plant and product, down to each component. The same applies to our revenue streams. We must be able to analyze contribution margin for every product, client, and region. I'm happy to report that after months of hard work, this kind of detailed management information is becoming available, allowing us to develop a sound strategy for our assets and refining our market approach. We are also progressing in improving our processes and controls, ensuring our processes are followed and best practices are in place. Not less important is to transform our organizational culture. It is a continuing process. We recognize that we had issues with ownership, focus, and urgency. We are actively working on that, while we have already removed barriers that have been slowing down our decision-making processes.
The depth of the change we are implementing is significant, and while some actions take time to gain traction, others, like system changes, control, and discipline, were quicker to be evident in the results. The early wins are important. They help to build our confidence. From fixing our internal foundations, we are ready to move forward. We believe that we have a plan that will lead us back to profitability and growth in the years to come. The plan focuses on eight key areas, which we call our turnaround commandments. These are clear internal directives which will create significant change and are absolutely essential for our success. At the heart of our strategy is a strong emphasis on safety. This is a non-negotiable and is now part of the performance assessments and incentive system for all employees. Now, let's break down the commandments.
We have four commandments related to operations and supply chains, which we'll focus on: increasing production in all our plants, reducing variable costs through clinker substitution, fuel mix optimization, and co-processing, regaining control of our main cost line by in-housing the logistic management area, improving people and equipment productivity through our new world-class plant performance improvement program with clear targets for all equipment and teams, from the quarry to dispatch, and maintaining rigorous control of capital expenditures.
We have set two commandments targeting our commercial and go-to-market approach, which are focused on building the appropriate channels and increasing product competitiveness to grow our volumes through adequate pricing focused on contribution margin results, leveraging our competitive advantage and offering a more compelling value proposition to customers.
We will also strengthen our presence in core provinces where the PPC brand is wanted in the market, launching flexible delivery options to enhance customer experience and to reach new customers. Building long-term, win-win sustainable relationships with customers is the core of our commercial strategy. There is one commandment centered on fostering a cost-conscious mindset that encapsulates many different focal areas, as improving variable costs through procurement centralized sourcing, improving fixed costs, namely in manpower, overtime costs, and also better maintenance planning, restricting non-core expenses, and managing effectively our working capital, starting with inventory and then moving on receivables and payment cycles. Finally, there is one commandment that ties everything together, emphasizing the need for less complexity and prioritized value creation.
By adopting a less-small philosophy, we will use data-driven decisions to optimize our product portfolio and focus each plan on a specific product, which will enhance value delivered to our customers. We are also transforming our marketing, focusing on activities that better support customers. Right now, we are in the early stage of this initiative, but both visible and invisible actions are already happening. As mentioned, accurate management information is beginning to allow us to start to adjust our footprint, meaning what product we sell, from which plant to which specific region. In parallel, we have raised the standard required at our operation, pushing for benchmark operational targets. We believe that the ramp-up has already started. On the commercial side, we are excited to begin implementing our market strategy.
It will allow us to build mutually beneficial relationships with our customers, revitalize our brand presence, and ensure that we get consistent store leadership presence. Our success will be measured against EBITDA, EBITDA margin, free cash flow generation, and ROIC. Awaken the Giant involves no excuses, urgency, and accountability mentality. However, we have not only focused on operational opportunities. In parallel with step one and step two, we have been working hard on different scenario planning. We are studying and developing optimization projects for our current assets, mainly in the energy and extended area. We are also reviewing our footprint and addressing how better service the market. The above-mentioned projects are important, but we are also actively working on strategic options that will change the shape of PPC in terms of long-term competitiveness in the South African market.
Finally, I am pleased to share that our outlook for the second half of the year is looking positive. The industry typically experiences a seasonal slowdown in December and January due to shutdowns in the construction sector. However, we anticipate we will continue realizing savings from our cost-discipline efforts. Additionally, we expect to see more traction from the other initiatives we have started rolling out. With no significant changes in the trading environment, we expect to solidify the South Africa and Botswana group growth.
In Zimbabwe, the cash cost action that offsets the volume loss will continue to drive value to recover EBITDA to the same levels of the previous year. Finally, I want to emphasize our commitment to action and implementation of the Awaken the Giant roadmap. It is important for us to manage our short-term results and performance together with the implementation of the turnaround strategy.
At the same time, we must keep our focus on the long-term direction. This means to keep developing strategic projects and alternatives for the future of PPC. I will close in the way I have started, reiterating my growing confidence in the size of the turnaround reward. It is encouraging to see positive signs showing up already in our half-year result. I didn't expect them to materialize so soon. I want to emphasize that this is a journey, not a sprint race, but more a half marathon.
My role alongside the board and our management team is to ensure that PPC is agile enough to adapt to changes in the surrounding context and keep focus and discipline while building the PPC of the future. We are Awakening the Giant. Thank you again for being with us today. While we have further engagement sessions with many of you, we also have time for now for some questions. If we do not get your question today, we will follow up in writing.
Thank you, everyone. We have a few questions already, so I'm going to start. Actually, the first question is from a media from Netwerk24, Heinz Schenk. Hi there. Thank you for the opportunity. I just wanted to perhaps gauge how the problem of the so-called construction mafia is becoming a risk factor for PPC's operations, as well as many other infrastructure projects, as stated by Minister Macpherson last week. Are you hopeful government's acknowledgment of the problem will help alleviate it? Thank you.
Okay. Thank you very much for the question. Well, being completely honest, I'm not in a position to comment about an issue that is more related to government addressing the problems that the construction sector has been highlighting for quite a long time. Probably the construction companies are in a better position than us as cement companies. But of course, legality is very important, and unlocking the potential of the South African construction sector is equally important. I think that it's key that the government embrace the importance of the sector, creating value, and particularly creating jobs in the country.
So I think it's very important that all the problems that the industry has been highlighting for years, in this case, I'm not very familiar with, but we have been highlighting the sector for years in terms of trying to build a level playing field for imported cement and local cement, the importance of controlling quality in the market. After reports we have received that cement coming from local blenders are below the quality standards that the country requires, I think that all those issues are very important that the government take responsibility and accountability for that because the construction sector is 100% needed in future development for the country.
Thank you. The next question is from Rowan Goeller, Chronux Research. In the new strategy, does PPC still see itself as the premium brand and being responsible in price setting?
Thank you, Rowan. I think we are going to talk later on, but I mean, absolutely, yes. We are the premium brand because we have the premium quality cement in the market. So there is no doubt that we are the premium brand, we have the premium quality, and for that, we have the premium price. I mean, we need to offer with that premium price a value proposition for customers and users that they would appreciate our brand and our quality. But definitely, yes.
Next question from David Fraser, Peregrine Capital. It sounds like the newly commissioned Mozambique kiln has started to move a lot of products into South Africa at a lower price. Will this not destabilize an already oversupplied local market?
Probably our audience does not know that I was the former CEO of Cimentos de Moçambique that was the PPC of Mozambique, the leading company in Mozambique. So of course, we are seeing some cement coming from Dugongo reaching some areas of Mpumalanga and northern KwaZulu-Natal. Particularly, I'm not very concerned about that because as we are going to become fitter and we are going to be in a better position to compete. Actually, I'm not afraid of any competition, including the cement coming from Mozambique.
Thank you. Next question from Ruwan Pienaar, Aylett & Co. Can you talk around the current cement market position in South Africa, your current cement market position in South Africa? Has your market share increased or decreased in the past year?
We are currently and still the leading company in terms of market share in the country, but this is not a secret. The market share position of PPC has been declining for years consistently. As a new team, we are looking to stop that and actually not only maintain our current market share position, but look for a better position in the future.
Next question from Warren Riley, Bateleur Capital. He's got two questions in one, so I'm going to ask each one individually, and then we'll take them one at a time. The first question is, what is current capacity utilization of installed capacity? Can you provide a view on production increase over the medium term?
I think, and to correct me, nowadays we are around 60% of our installed capacity, and that is why we are working, and one of the commandments that we mentioned is that we increase our production in all the plants, but using the current equipment that we are running. I think that we can run our current equipment in a more efficient way.
Actually, we believe that we can increase our current production by 20% running the same equipment that we are running today, but in a more efficient way, so that would be our first target, meaning we have extra capacity everywhere, so we are in an excellent position and very well prepared for any growth in the market, but still believe that how we are running our operation today, how we are running our equipment today could be improved running them in a more efficient way. Our first target is to increase 20% of our production, but with the same equipment running that we are running today. Still, if the market finally, as we expect, is starting to grow, we have capacity in all our sites to increase production almost immediately.
Thank you. The next question still from Warren is based on current economy. What SA cement EBITDA margin do you aim to attain? And then carry on. If SA economy can grow 2% for next few years with increased fixed capital formation, what EBITDA margin do you think can be achieved?
I always try to restrain myself to be extremely optimistic about what I think. As I mentioned, I am very optimistic about how the future is going to look for PPC. I think in the years to come, and depending on correctly, the execution was done correctly, depending also not only on the turnaround, but also on the market, we can look to a 15% EBITDA margin in South Africa in the years to come. Of course, it's not going to happen overnight. It's not going to happen next month. It's going to take some time, but definitely that could be the minimum target for ourselves.
Thank you. Charl de Villiers from Ashburton. Please, can you unpack the nature of the new relationship with Sinoma? Is it a simple fee-for-service arrangement, or is it a more complex multi-year agreement with hurdles, targets, profit share, etc.?
So far, the kind of agreement we have is that absolutely for free for PPC. The Sinoma team is currently in South Africa and is going to move to Zimbabwe in two weeks' time. They are going to do a deep dive assessment across all our operations. They are going to come with an outcome of that deep dive with proposals, but not only in terms of possible CapEx or asset utilization, but also offering us operational services to improve how we operate our plants. It's no more than that.
In the weeks to come, a couple of months to come, but probably by December, we will receive this report from Sinoma that jointly with the work that Ernesto and his new team have been doing, will give us a real accurate assessment of the improvements, the opportunities we have in terms of improving our operations. So far it's no more than that. In the weeks to come, when we receive this report, we are going to take it from there and we are going to engage with Sinoma, of course, looking at, yeah, and improving our operation going forward.
Thank you. We've got Clifford Mutevhe, which is just asking on behalf of himself. Exciting turnaround plan. What is the financial target or financial outlook for 2025? I know that you have just given us the EBITDA. I don't know if you want to. He does have a second question. I don't know if you want to expand on that or if there's anything you want to add to that.
I think that the outlook for the second half of our FY 2025 is that we are planning to recover EBITDA in Zimbabwe to the same levels of the previous year. And we are looking at growth in our South African and Botswana operations. I think that we are going to continue seeing a better EBITDA margin, better cash flow generation. And as I mentioned, in terms of EBITDA, we are looking at reaching the same level of previous year in Zimbabwe and improving our EBITDA bottom line in South Africa and Botswana.
I carry on from this same gentleman. What is the view of PPC on transport of finished product? What does cost model show on ownership versus contracting?
I don't know if I understood the question correctly. I mean, what we are telling is that we are in-house in the logistics management that for the past years in PPC has been outsourced. We are not saying that we are going to insource our transportation or logistics operation. I mean, we are not going to have trucks. I mean, we will continue relying on the best logistics companies in the country to give that service. What we are in-housing is the logistics management because actually PPC almost didn't have a logistics area in the past, and we have rebuilt that area that is already working and is going to engage in the future tenders with the logistics suppliers.
Thank you. That's helpful. We have one more question. So if anybody else wants to ask a question, this is your last chance because after this, we have no more questions. Charles Bowles from Titanium Capital. I think shareholders have lost count of the number of deep dives and turnaround plans that PPC has developed. Most of the solutions put forward on slide 24 have been mooted before. Why is this time different?
I strongly disagree with Charles. No, Charles is asking this question.
Charles, yes.
Yeah. I think that what we are doing now is completely different than what PPC did in the past, and I'm not sure which was slide 24, but I'm sure that, again, any of the commandments and the strategy that we are putting in place has been done in PPC for years, so Charles, I respectfully disagree.
Thank you. I don't see any other questions. So any closing remarks before we close for today?
No, I think it's very important. I would like to highlight the support I have received so far from the board, from key shareholders, from the executive team, and from the whole team from PPC. I think, as I mentioned in the presentation, the core of the turnaround is our people. So I would like to particularly thank all stakeholders, customers, suppliers. I would like to thank again the board, our key shareholders, the executive team, and the whole PPC team because, again, taking from the question from Charles, the change that we are looking at and already started is significant. PPC has never done anything like what we are doing now. And it requires, naturally, the support from all stakeholders and most importantly from our team. So I would like to particularly thank you, all of you, for that. So thank you very much.
Thank you very much.