Good morning. I am Matias Cardarelli, the new CEO of PPC, and I welcome you to our financial results presentation for the 2024 financial year. As some of you may know, my family and I have made South Africa our home for the past six years. We have truly embraced the culture and warm hospitality of this beautiful country. Thanks a lot for allowing me and my family to call South Africa home. It has been an interesting journey since I took on the role seven months ago. I am honored to be leading this iconic South African company. I thank the board for the opportunity to lead a company that plays such a crucial role in the development and growth of South Africa. I want to extend a warm welcome to our shareholders, investors, employees, members of the media, and other stakeholders who have joined us today.
Your support and interest in PPC are greatly appreciated. Brenda Berlin, our CFO, and I look forward to sharing the results and some of our initial assessment of the opportunities we believe are possible. Finally, I would like to spread my gratitude to the PPC internal team and external team who have worked tirelessly the past days for us to be able to present our results today. Going through the agenda. After my introduction from a high-level perspective, Brenda will take us through the key financial metrics. I will follow with the business review and close with the strategic plan and outlook. My first 100 days in the company. When I first joined the company, I quickly realized the importance of understanding every aspect of the organization, from its people, processes, assets, and overall structure. It has been insightful. One of my initial priorities was to simplify the management structure.
We formed a new executive committee to directly oversee both the group and the South African business. We have flattened the layers of management to improve communication and oversight. While most of the changes have been implemented at the top level, we are now cascading them throughout the organization. It was clear on that we needed to make some people changes. We have brought on new leaders with collectively over 50 years of experience locally and internationally. Together with the experienced existing team, we are well positioned to drive the necessary transformation. I have spent considerable time engaging at all levels of the organization and establishing priorities. This has been done in partnership with the board, leading to a renewed sense of confidence as we navigate this new chapter for PPC.
This new era in the long history of PPC requires a leadership team that is empowered and embraces a culture of high performance. We recently held a kickoff event with our 60 key leaders, fostering honest and transparent dialogue. Effective communication and real talk will be key on the road ahead. After initiating a comprehensive assessment of the organization, we have defined priorities to rebuild the foundations of the company. We are confident that our plans will not only lead to a successful recovery but also entrench our position as the premier cement company in South Africa, well positioned to take advantage of value-creative growth opportunities. For a better understanding of the situation, let's step back and look beyond just the year-end financial results and focus on the bigger picture. What has been our performance over the past few years?
In our core South African business, our EBITDA and margins have been consistently declining over the last five years. While we acknowledge the challenging market conditions with few infrastructure projects and negative macroeconomic indicators, are external factors the sole reason for our struggles? To move forward and focus on PPC's future direction, we must first look back and understand the reasons behind this ongoing underperformance. It is crucial to question the assumptions and the decisions that have led us to this point, focusing not only on external factors but also on aspects within our control. This is a critical moment for PPC, as our prolonged underperformance calls for us to make strategic decisions, shift our focus, and strengthen our core operations. In a challenging market impacted by import and some blended low-quality local cement, industry discipline is required to prioritize margins and profitability.
Industry dynamics should evolve from a focus on maximizing volumes to now needing to prioritize margins for long-term sustainability and investors' returns. Our board recognized the need for change and has given me the mandate and the authority to lead the necessary turnaround efforts. Upon evaluating some key aspects of our company, it is evident that there are areas where we are falling short, impacting our performance and our ability to achieve growth. Our organizational structure does not allow effective execution, with multiple layers and duplicated roles leading to a lack of accountability. A new structure should facilitate a culture of ownership, agility, and reduce complexity. Management decisions are negatively impacted due to the gap in business data availability, processes, industrial KPIs, and commercial intelligence. It will be important to standardize processes to ensure adherence to best practices.
Discipline compliance to standard operating procedures is critical for data consistency and cost control. Aligning company performance metrics will be important to ensure a collective focus on key priorities. Despite these challenges, we believe that with our strong asset base, the right people, and a solid balance sheet, we can capitalize on these internal opportunities to drive value creation. I will elaborate on some of these later in the presentations, so let me now hand it over to our Group CFO, Brenda Berlin, to take us through the financial review.
Thank you, Matias, and good morning, ladies and gentlemen. Just to give you an overview of the structure of the section of the presentation, I will cover in the first instance the consolidated group, followed by some more detail on the SA and Botswana group and Zimbabwe. I will then close on capital allocation, capital expenditure, and returns to shareholders. Moving to the consolidated group highlights, I just want to remind everyone that PPC's 51% stake in CIMERWA, the Rwandan operation, was sold on the 25th January 2024, and it has been accounted for as a discontinued operation up to that date. All the numbers in the presentation are for the remaining continuing operations. Revenue is up 20.6% to ZAR 10 billion.
Both Zimbabwe and the SA and Botswana cement group experienced margin erosion, but due to the relative growth of the Zimbabwean contribution, group EBITDA margin increased by 1.6 percentage points. HEPS from continuing operations is ZAR 0.19 per share, up from the loss of ZAR 0.20 per share in the prior year. However, it is down from ZAR 0.26 per share in H1. I will deal with a half-and-half analysis later. I will also deal with the revised distribution policy on the next slide, but pursuant to the revised policy, an ordinary cash dividend of ZAR 0.137 per share has been declared to shareholders. Regarding capital allocation for the year-end review, the group spent ZAR 400 million on capital expenditure and effected the share repurchase program of ZAR 199 million. As a group, we made cash flow positive, generating cash before financing activities of ZAR 260 million in FY2024.
This excludes proceeds received from the sale of CIMERWA. Overall, the results are marked by tailwinds in H1 and a normalization in H2. Both Matias and I will touch on this later. Specifically, this slide sets out some key matters to consider and note before going into the actual results. As mentioned, PPC sold its stake in CIMERWA on 25 January 2024 and received the selling price of $ 42.5 million or ZAR 809 million in full. After taking into account the net asset value, non-controlling interest, and foreign currency translation reserve, we realized an accounting profit on disposal of ZAR 197 million. Regarding Zimbabwe, the full year has now been accounted for in United States dollars as its functional currency. The prior year comparatives are clearly still in hyperinflated ZWL.
Zimbabwe is more significant in the group in the current year given the strong volume growth, albeit off a low base, and the depreciation of the rand against the U.S. dollar by some 10% over the year. I would also like to deal here with the new distribution policy. We previously looked at the SA and Botswana group as a standalone unit, including dividends from Zimbabwe in EBITDA. The target gearing ratio was previously set at 1.3x-1.5 x gross debt to EBITDA. We have now adjusted the policy to look at two distinct buckets, being the SA and Botswana group, excluding Zimbabwe dividends, and have set the target gearing ratio to 1.3x-1.5 x net debt- to- EBITDA. Any amount available for dividends from this calculation will be supplemented by up to 100% of dividends received from Zimbabwe.
In other words, Zimbabwe dividends are now treated as a flow-through. This slide sets out the key line items on the consolidated income statement for continuing operations. I will cover both the South Africa-Botswana group and Zimbabwe a bit later. For now, I'd like to focus on items below the trading profit line. The fair value and foreign exchange gains changed from a gain of ZAR 55 million to a loss of ZAR 30 million. In the prior year, U.S. dollar debtors in Zimbabwe were remeasured into ZWL, creating significant exchange gains. This is no longer applicable in the current year. Two other effects in the prior year being adjusting the credit risk on the Zimbabwean blocked funds to 100% and the net monetary loss from hyperinflation accounting of ZAR 131 million are also no longer relevant.
The main items in the impairment line are the mothballing of the Jupiter milling plants of ZAR 56 million. This was already impaired at the half year. The impairment of the two older swing kilns at Dwaalboom and Slurry of ZAR 125 million. Market demand is expected to remain muted, and there is a need for capacity and cost optimization. These two kilns do, however, remain readily available should they be needed. Weak prospects for the aggregate business also resulted in an impairment of ZAR 70 million. Dealing with the tax charge or effective tax rate of 62%. First of all, dividends received by PPC Limited, being some ZAR 200 million from Cement SA in the current year to fund the share repurchase and the dividend of ZAR 203 million from Zimbabwe, resulted in 62% of expenditures not being deductible given the pro-rata nature of taxable versus non-taxable income.
In addition, PPCIH, that is the holding company of CIMERWA, incurred one-off costs on the disposal of CIMERWA, and these costs are also not deductible. These two items increased the tax rate by 13.4%. Withholding taxes on dividends and management fees received from Zimbabwe and Botswana also increased the tax rate by 10.1%. Lastly, an increase in the Zimbabwean tax rate on 1 April 2024 necessitated a remeasurement of the deferred tax liability, increasing the rate by a further 7.2%. If one excludes all the one-off items and the dividend withholding tax, which in and of itself distorts the effective tax rate given that the dividends themselves are eliminated in profit before tax on consolidation, the effective cash tax rate is 38%. Excluding the impact of dividends from Cement SA and some further tax optimization plans, the effective cash tax rate is expected to normalize at around 33%.
Moving to the half-and-half analysis, as you can see, the H1 EBITDA of ZAR 800 million declined some ZAR 360 million or 45% to give H2 EBITDA of ZAR 442 million. There are three main reasons for this. Firstly, the biggest decline was in PPC Zimbabwe, where EBITDA reduced by ZAR 183 million. H1's volumes were very strong in a market helped by import bans and competitor difficulties. The market normalized in H2, with imports being reinstated. PPC Zimbabwe also experienced high cost inflation, specifically electricity increases in October 2023 and December 2023 resulted in an effective increase of 76%. In South Africa and Botswana cement, EBITDA declined by ZAR 112 million. Volumes in H1 declined by 4.3% and declined further in H2 compared to the prior year H2 by 4.8%. The H1 market context allowed for price increases, which did not negatively affect market share. However, in H2, it was the opposite.
We put through a price increase in January 2024, which did affect volumes. Lastly, in group services and other, costs increased by ZAR 78 million in H2 due to leadership changes, restructuring costs, and disposal costs related to CIMERWA. In summary, H1 benefited from a number of specific exogenous items, and H2 reflects a more sustainable reality as well as the usual seasonality. In closing on the consolidated group, this slide depicts contribution to both revenue and EBITDA by the South African and Botswana group and PPC Zimbabwe. The numbers inside the wheel depict FY2024 percentages, with FY2023 comparatives being depicted on the outside. You can see that the most material contributor to revenue is the South African and Botswana group at 67%, albeit significantly down from 79% in the prior period. At the EBITDA level, this is diluted down to 46% of the total, with Zimbabwe's contribution increasing to 54%.
Zimbabwean contribution increased due to the H1 circumstances I have just talked about. I will now move on to discuss the South African and Botswana group, followed by Zimbabwe. The South African and Botswana group remained resilient, notwithstanding a tough second half. This slide sets out the key metrics for the segments in the group. Dealing with cement first. Overall volumes, excluding sales of clinker to Zimbabwe, were down 5.8% due to weak demand. Average selling price increased by 9.7% but was negatively affected by product mix variance. The above items, therefore, account for the 3.6% increase in revenue for the year. Input cost inflation impacted both absolute EBITDA and the margin deterioration from 11.7% to 11.3%, and I will give some color on this in the next slide.
In materials, the aggregate business EBITDA included a one-off non-cash item of ZAR 55 million due to a third party replacing certain assets at no cost due to rehabilitation obligations. Volumes in both aggregates and ready mix businesses declined, and these businesses continued to be EBITDA negative, albeit less so than the prior year. The ash business increased both volumes and EBITDA, leaving the segment overall at a negative ZAR 12 million, excluding the non-cash one-off ZAR 55 million I referred to. This compares to the negative ZAR 65 million in the prior year. Group services and other comprises group administration, PPC Limited, and PPC International. This is what is represented in the segmentals in the financial statements.
In the analysis on the slide, however, PPC International is excluded as it is not part of the SA and Botswana group, and the CIMERWA management fee is added back as the accounting numbers exclude this given CIMERWA is depicted as a discontinued operation. This results in total EBITDA for the South African and Botswana group increasing by 6.7% year-on-year. Return on invested capital, or ROIC, of 5.8% remains well below our target of exceeding our WACC of circa 15%. This is calculated on the SA and Botswana group total net assets, including the cost of the investment in Zimbabwe. The driver of the SA and Botswana group is the SA and Botswana cement business, and its cost structure is dealt with on the 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 costs of product, variable production costs, all other fixed costs, whether at sites or central, and maintenance costs. As you can see on the bottom left of the slide, the two most significant costs being variable costs and fixed costs both increased by almost 10%. In the waterfall on the right, we show the build-up of the revenue variance of a positive 5.2%. This revenue now includes sales outside the segment being to Zimbabwe against an absolute cost increase of 5.6%, which excludes depreciation, expected credit losses, and sundry income. This is the cause of the absolute margin erosion of 0.4%.
Moving on to the South African and Botswana cash flow, the waterfall graph on this slide shows the main drivers of the movement in cash from an opening balance of ZAR 131 million to a closing balance of ZAR 793 million. The SA and Botswana group generated ZAR 557 million from operations or ZAR 593 million after working capital changes. We then paid ZAR 98 million in tax and spent ZAR 296 million on CapEx. Various other expenditures amounted to ZAR 81 million, which include lease repayments. Cash generated from the core businesses amounted to ZAR 118 million. Scheduled debt repayments amounted to ZAR 150 million, and interest paid debt to investment income was ZAR 93 million. The dividend received from Zimbabwe supplemented cash by ZAR 203 million.
As can be seen at the bottom of the slide, we were in a net debt position of ZAR 800 million at the beginning of the year and moved into a net cash position of ZAR 14 million by 31 March 2024. I will now deal with the proposed use of the CIMERWA proceeds. As you have just seen, the net proceeds from the sale of CIMERWA amount to ZAR 783 million. The Competition Authorities, or COMESA, approval was not required as a condition precedent to the transaction, but it is a condition subsequent. This approval has not yet been received as COMESA has requested an extension to July 2024 for the parties to provide clarification on final questions.
Once COMESA approval is received, management intend proposing that the PPC board consider a special cash dividend to shareholders of between 60%-70% of the net proceeds, being an amount between ZAR 470 million and ZAR 550 million. Moving now to Zimbabwe, this slide sets out the key metrics for Zimbabwe. The comparable figures are stated in pro forma U.S. dollars, which convert the ZWL numbers at parallel rates. Matias will deal with operational matters later, but revenue increased by 53%, driven by a volume increase of 37% off a low base. Revenue was also positively affected by a full year impact of the price increase in August 2022 and a further price increase in January 2024. EBITDA increased by 43% to ZAR 36 million. CapEx amounted to ZAR 5.8 million, of which some 5% was spent on expansion projects.
PPC Zimbabwe paid ZAR 11 million in dividends during the year, and its cash balance at year-end amounted to ZAR 2 million, impacted by working capital build-up, mainly in clinker stocks. Consequently, the normal July dividend has been deferred to later in the year to allow for a normalization of working capital levels. To remind you, PPC Zimbabwe remains debt-free. Lastly, before I close, I would like to deal with the PPC's group capital allocation model. This model has not changed from last year, and it is strictly adhered to. First, we manage capital in two distinct pillars, being the SA and Botswana group and Zimbabwe as separate entities. In South Africa and Botswana, we determine what the parts of available cash are 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 the cash and/or drawdown of the debt would leave our net debt- to- EBITDA ratio in a range of 1.3x-1.5x on a 12-month forward-looking basis. Step one is then to allocate capital in the first instance to sustaining capital, including compliance and maintenance capital. Thereafter, in step two, expansion capital has to compete with returning cash to shareholders on three metrics, being targeted WACC, targeted ROIC, and targeted payback. The expansion opportunity has to meet all three of the above targets, failing which the balance of available capital will be returned to shareholders. This slide sets out the actual capital allocation as between capital expenditure and returns to shareholders.
Set out on the left-hand side of the slide is the actual CapEx over the last two years and our outlook forecast for FY2024, subject to the capital allocation model I have just described. Of the ZAR 330 million guidance for FY2024 on sustaining capital, ZAR 275 million related to the SA and Botswana group and actual spend amounted to ZAR 276 million. The increase in the overall sustaining CapEx from the guidance is as a result of the exchange rate on the Zimbabwean CapEx. In FY2025, we expect total group CapEx to be between ZAR 400 million-ZAR 450 million due to environmental compliance CapEx being required on a kiln in Western Cape.
On the right is a summary of the returns to shareholders, being capital allocated to the share buyback of ZAR 199 million in the current financial year, the pass-through to shareholders of the dividend received from Zimbabwe that amounts to ZAR 13.7 per share, or ZAR 204 million, and the management proposed special cash dividend of 60%-70% of the net proceeds from selling CIMERWA, which will be considered by the board. To conclude, looking forward, our capital allocation priorities are to maintain discipline, focus on improving the return on invested capital in the SA and Botswana group, and apply the revised distribution policy, being to maintain leverage, 1.3x-1.5 x net debt, and upstream up to 100% of dividends from Zimbabwe to shareholders. Thank you. I will now hand you back to Matias for the business review.
Thank you very much, Brenda. For me, talking about the business is talking about the main operational and business drivers and KPIs. Although we are still in the process of standardizing operational indicators, I will introduce some key highlights. Safety remains our number one priority, and we are extremely unhappy with our safety performance in FY2024. Going forward, decisive action will be taken to ensure that all our employees return home safely without injury after work. In our initial assessment, all our kilns are running below optimal levels. We believe there are meaningful opportunities for improvement in performance, reliability, thermal substitution, and clinker incorporation. Looking at our top line, despite a price increase of 10% in South Africa and Botswana cement in FY2024, margin declined. However, moving forward, there are opportunities to optimize product mix, logistic footprint, and expand our customer base.
I'm not going to repeat the key financial highlights already explained by Brenda, so I will focus on the key aspects of the business performance and context. To some extent, South Africa and Botswana performance in FY2024 reflects some of the points that I mentioned in the introduction about our internal gaps. Despite tailwinds in the first half, we were not able to improve results, and the EBITDA margin declined. In the first half of the year, taking advantage of favorable market conditions, we were able to implement price increases above the average of the previous year, which should have contributed to margin growth. Excluding the positive impacts of clinker sales to Zimbabwe and the stock build-up at the end of the year, our EBITDA in FY2024 would have reduced compared to the previous year.
As mentioned before, our main cash cost line, variable and fixed cost, have increased close to 10%, putting our margins under pressure. As explained by Brenda, there was a significant shift from H1 to H2. In H2, the decline in results was due to a change in the trading environment, price resistance from the competition that didn't follow PPC's January 2024 price increase. Just to note, capacity changed during the year. The Jupiter milling plant was mothballed, while the Highveld blending plant became operational late in Q2 after a delayed startup. The swing kilns in Slurry and Dwaalboom were not operational in the year but are ready to be activated if needed. The material segment results have improved after an extremely negative year in FY2023. However, the consolidated material results, excluding the one-off impact of ZAR 55 million, are still in a negative position.
The ready-mix business results started deteriorating in Q3, with a decline in volumes that resulted in an 18% reduction in the full year. The business continued to be penalized by low demand, combined with subdued pricing in certain regions by the competitors. Yet, ready-mix continues to be an important channel in the market, and its footprint and operational model need to be optimized for the current trading context. A similar trend was experienced in the aggregate business that saw the volumes deteriorating at a great pace in the second half of the year. This resulted in a negative EBITDA for the full year. On the cost side, mining costs increased due to drilling costs, increased stripping for benches, and higher overburden removal. The ash business delivered EBITDA growth on the back of revenue growth, with higher volumes and price.
This more than offset higher variable production costs and higher maintenance costs as well. In Zimbabwe, revenue growth of over 52% was the main driver of the group results in the year, boosted by volume growth and higher selling price. The first half of the year was characterized by tailwinds, namely high demand, competitors' operational problems, and restrictions on imports. This was in a period that our plants were running without major interruption, which contributed to record volumes in the year. These record volumes were built in H1, with growth of 44% comparing H1 2024 to H1 2023. This softened in H2. By quarter four, the quarter-on-quarter volume increases had reduced to 3%. Lower traction from national government projects, change of tax regulation that affected the informal market, and the reissue of import license impacted H2 and continued into the new financial year.
After the extended maintenance stoppage in Colleen Bawn in the previous year, we stabilized the operation, achieving a high clinker production but still below the capacity potential. Due to this gap between demand and production, we needed to increase clinker imports, thereby penalizing our total cost. Production costs were also impacted by an effective 76% electricity tariff increase in H2. In summary, higher sales tailwinds and the positive impact of price were partially offset by higher costs of production, which adversely impacted the EBITDA margin. We believe H2 represents a more normalized operating environment in Zimbabwe. Coming back to the pillars of our transformation, our strategy is centered around three pillars: business-oriented, attitude, and governance. These three elements are interconnected, and our success lies in integrating them into our organizational culture. In terms of business results, our focus is on enhancing data quality and accuracy to provide reliable information for decision-making.
The foundation will enable us to establish meaningful metrics and KPIs to drive our performance goal. This gap in data accuracy exists across the organization and must be addressed to ensure informed decision-making and a complete understanding of our contribution margin. Furthermore, we are committed to optimizing our organizational structure to create a lean and agile operating environment. Our values play a critical role in guiding our actions, with safety, integrity, sense of urgency, ownership, accountability, agility, and cost consciousness at the forefront. We are working on our culture to ensure that our values will be demonstrated through behaviors that are aligned with our organizational goals. In terms of governance and structure, we are focused on streamlining the organization to empower key roles and eliminate unnecessary complexity. By simplifying our structure and improving governance, we aim to create a more efficient and effective PPC.
As an example, we will be reorganizing our legal entities to reduce non-value-adding intercompany activities. Let me continue by sharing some details in other key areas, such as our commercial, industrial, and supply chain operation, and of course, people at the center of it all. Starting with people, I cannot stress enough the importance of effective and transparent communication within the organization. This will help align us towards building a performance-oriented culture. Engaging in a walk-the-talk leadership, providing on-the-job training, and upskilling our teams with in-house knowledge will be crucial in driving our success. In the commercial area, we are consolidating under one centralized umbrella to enhance our internal intelligence and decision-making process. This will enable us to optimize our footprint, diversify our offering, focus on contribution margin, and leverage our natural competitive advantage in the market.
In the industrial area, our focus is on performance improvement through a program that involves internal and external benchmarking, monitoring of KPIs, and then standardized targets and processes. This will drive scale, best practices, and productivity growth. We are looking at optimizing clinker stability, maximizing clinker substitution, and prioritizing co-processing for thermal and revenue benefits. In logistics, we aim to strengthen our internal team, improve data control for better decision-making, and optimize sourcing to reduce rates. Furthermore, our centralized technical support services will be closer to the operation, driving the improvement plans with an ownership approach. Our commitment to decarbonization remains as we continue to implement proven industry methods, which also deliver cost reduction. We have set targets for CO2 emission, incorporating initiatives such as clinker reduction, increasing co-processing, and solar energy adoption. Turning these principles into a roadmap, here are the key milestones we aim to achieve.
Our overarching PPC strategy is rooted in our company heritage and strengths, with a clear and bold plan for recovery. In the short term, we are focused on both fixing and rebuilding while also pursuing quick wins. It is important to note that in these processes, the path will not be linear. However, we are fully committed and confident in our ability to turn things around. Our short-term strategy focus on internal reorganization will pave the way for growth in the next phase. We anticipate improvements in industrial performance, logistic costs, and our go-to-market strategy, all of which will drive growth in contribution margins. Our business goals include increasing profitability and delivering returns to our investors. Despite the challenging macro conditions, our aim is to outperform the market and maximize return on invested capital.
The market condition in the latter half of FY2024 saw a decrease in traction, resulting in increased competition for market share. This trend continues into Q1 of our FY2025, leading to a deterioration in volumes. Looking ahead, we remain cautiously optimistic about the medium-term macroeconomic environment in South Africa. The country continues to have strong fundamentals that support cement demand, including population growth, urbanization, and infrastructure needs, and a low cement consumption per capita compared to similar markets. Internally, our team is united in spirit and focused on achieving our goals. We have a clear roadmap that prioritizes internal initiatives despite the market context. In conclusion, we are committed to navigating the challenges ahead and continue to remain focused on delivering value to our investors and shareholders. PPC turnaround is in our hands. Thank you. Now we will take your questions.
Good morning, everyone. Just a reminder, if you do want to ask questions, we will read them out and pass them on to the management team. Matias, do you want to introduce who from the team is sitting with you for the questions?
Yeah, thank you very much, Brenda. Good morning again. I think that was a very good idea to introduce to all of you our new executives in the Exco team. Paulo Marques, that is our Chief Strategy Officer with more than 20 years' experience in different cement companies around the world. And Ernesto Acosta, our Chief Operating Officer with more than 25 years in industrial operation areas across many companies around the world in different countries as well. I think it's very important to mention that Paulo and Ernesto have already been also five years in the country, so they mix both local and international cement experience. That we are sure they are going to add a lot of value to the turnaround process that we have already started.
Thank you, Matias. I'm going to start with Ralph Milton from Topf light, who asks, in terms of the authority at the last AGM, shareholders has approved a repurchase of 10% of PPC equity by the company. To date, there are still 100 million shares that can be bought in terms of this authority. Gearing levels are way lower than stated net debt- EBITDA. Comments, please.
Thanks for the question, Ralph. A few points. Notwithstanding that shareholders approved up to 10%, our board approved a total amount of ZAR 200 million to be spent on the share buyback, and we hit almost exactly that amount. Regarding the gearing, you are right. As we sit at the 31st of March, we are under-geared.
However, if you put the CIMERWA cash to one side and you look at the rest of the South African Botswana Group, it is over-geared, and the dividend of the flow-through principle has been applied exclusively. Once the CIMERWA cash is included and management proposed the special dividend to the board, as a total South African and Botswana Group will be appropriately geared in our target ratio, our target range, sorry. Thank you. The next question is from Mark Ter Mors from SBG Securities. Could you comment on how customer segments responded to the cement price increases?
What we can say about cement is the cement segment is very different between the retail market and the industrial market and the bulk market. Of course, the highest competition nowadays in the inland section, in the inland area, is in the retail markets.
As we mentioned in our presentation, we put the price increase in January 2024 that mainly was not followed by our competitors. What I think is that we have a very competitive environment in the retail market, and that is why we need to put our efforts and our focus on that. I mean, some of the questions that are coming are whether we can unlock value internally and whether we are confident that we can unlock value internally. I can tell you, we are 100% confident that we can unlock value internally. If we go through all the P&L lines of the company currently, we are finding gaps, we are finding challenges, but at the same time, we are finding opportunities.
Particularly in the case of the top line, we have been mentioning during the presentation that for us, it's very important to build a database full of accurate data to run the business. Unfortunately, today we don't have that in our management account environment. So we are pretty convinced and we need to look carefully at which contribution margin brings each bag of cement or each ton of cement we sell. We need to have information about contribution margin per customer, per plant, and per product. And we do believe that we are in the best position. We have a best platform to offer value to our customers. So yes, the retail market has been the most competitive one.
We think that it's going to continue being the most competitive one, but we think that we are in the best position in the market to take advantage of our footprint, the location, our plant, the high-quality cement that we sell, and the strong customer base that we have.
Thank you. The next question is from Thato Diko from RMB. We note management have mentioned improved OEE levels, albeit still below best practice. Please remind us of what this best practice level is and provide a sense of where current OEE levels lie relative to this benchmark.
Before handing over to Ernesto, that of course can explain in detail this technical question, I would make it very simple. All our kilns are running below rate capacity, which means that we have the opportunity to produce more clinkers in all our kilns. This is pretty easy to understand. For a cement company, as much clinker you can produce, it would be better for your cost and it's going to be better for the opportunity you have to go to market. So I think that starting from there, Ernesto, if you want to explain the technicalities behind the OEE.
Thank you very much, Matias. Thank you for the question. Yes, basically, as Matias was saying, there are opportunities in all our five integrated plants to improve the kiln performance, the OEE specifically. We had a marginal increase and marginal improvement compared with the previous year as an overall result in all our five kilns, four in South Africa and one in ZIM, of estimated 1% of improvement in OEE. But still, we are in a level of the 80s and we should be close to the 90% of OEE.
So basically, a world-class kiln ran 92%, we can say 90% of the full year, meaning approximately 11 months, and should run consistently at the rate capacity only, let's say, 2% below. So we are, as Matias said, we are standardizing the way that we measure all our kilns and put comparison across all of them and very specific target for this starting this fiscal year. Thank you.
Thank you. We have quite a few questions from around Zimbabwe, understandably. I'm going to start with the first one from Luke Bredeveldt from Prima Research. Her team, what is the cement demand in Zimbabwe compared to the capacity in megatons?
Well, we have seen the cement demand in Zimbabwe flatten in the last six months. So there are still countries needing for imported cement because our main competitor there has had a lot of operational problems in the past year.
So what I mean is like the government now reallows importers to come to the country. So clearly, there is a shortage of cement in the country nowadays. This represents, of course, a big opportunity for us because we are well-positioned. We are running our kilns. We are running our cement mills. So the reality is that we are selling everything we produce in Zimbabwe. The challenge is to run, as was mentioned by Ernesto, our clinker kiln currently in Zimbabwe is operating at 80% capacity, and we want to move that with a better performance and a better reliability to 100%. And this will represent a big opportunity for PPC because instead of importing all the clinker from South Africa, by being able to produce that clinker in the country, it's going to push our contribution margins high. So the demand is there.
We are selling everything we produce, so we need now to look at margins to improve our returns. Ernesto?
Sorry, thank you, Matias. Regarding the cement capacity, we are at around 60% of our cement capacity together between Bulawayo and our Harare plant.
Okay, so continuing with questions around Zimbabwe, John Aaron from SBG Securities has three questions. I'm going to take them each in turn rather than asking all three. I will start with the Zimbabwe questions. What dividends in USD can be expected from Zimbabwe? Still around the $10 million-$11 million levels. Hello, John. Yes, that's right. That expectation has not changed. It remains as guided before. As I said, there will just be a small delay while the working capital levels normalize. Next question. It looks like FY2025 will be more challenging for you in Zimbabwe. Can you please provide guidance around volumes and prices and costs over the near future?
In terms of volumes, I think it's too soon to try to forecast the volumes in Zimbabwe. But in terms of costs, I respectfully disagree. I think that we have a very good opportunity in terms of cost in Zimbabwe for the reason that we have already mentioned.
Thank you. The next question from John. Are you still expecting cement sales from the old Lafarge assets?
Well, we are not only expecting us. We are assuring that by the new ownership of Afrimat, Lafarge is going to improve their production of cement and is going to become a more stable competitor in the market. From my point of view, this is good news for the industry.
I think that we need to bring back reasonable competitors to the market, and definitely Afrimat is one of them.
Thank you. Question from Rowan Goeller from Chronux Research. Good morning and thanks for the detailed presentation. On a strategic note for the industry, returns for all players are well below the cost of reinvesting. Can PPC improve returns through internal actions alone to a reasonable level without a market recovery?
Definitely, we can. I think, again, if we go through each of the lines of our P&L, we have opportunities in top line to bring price and better revenues. We have opportunities on our variable costs. We have been mentioning that we need to improve our performance and reliability in our equipments. We have opportunities in co-processing to reduce variable costs. We have big opportunities on reducing our clinker factor. And also, we are working on fixed costs and G&A. To my surprise, when I came to the company six months ago, I realized that the G&A costs are a significant part of our costs in PPC, and we are taking care of that. So definitely, I do believe that we have great opportunities to improve our margins without or independently of the market coming back.
Thank you. We've got a private investor, Motefes, asking, "I'm happy that you're focusing on a turnaround plan compared to continued crying on price increases. Continued cry on price increase. Can you give a timeline to your pillars related to the turnaround?"
Thank you for the question. We are not planning to cry. It's not our characteristic or personality. The contrary. The board brought us here to turn around this company, not to cry.
And this is what we have been focusing on for the past six months, and this is what we are going to do. In terms of timeline, we shared with the board last week in our strategy session that we are planning that FY2025 is going to be the rebuilding foundations phase of the company. So we are going to be focused on that this year, and we are expecting to look at results in the next fiscal year.
Thank you. I have no further questions on the chat, so if you would like to have any closing remarks, I think we can close the session.
Well, personally speaking, thank you very much. It's my first time that I am able to represent PPC at this stage. I think that today we came to the public and the market with two very important and positive news.
One thing is that for the first time since 2015, PPC has been able to pay an ordinary dividend to the shareholders. I think that that is a very important news. And the second one is that this very experienced team is completely convinced that we can unlock internal value. The third thing would be that I remain cautiously optimistic that with the new administration and the new cabinet, and after many years that infrastructure, public and private, have not been seen in the market, I tend to be cautiously optimistic that the cycle has reached into the bottom and we may see good news coming in terms of the market as well. Thank you very much.
Thank you.