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 2023, 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, and we will then talk through the results of South Africa and Botswana. Specifically, I will 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, four 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. Four 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. Three 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 two 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. 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 ` Africa weren't great. 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 roadmap to decarbonize our products.
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. 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 two reasons. Number one is the close collaboration that we have with Eskom, combined with the fact that we're not running all our equipment at full utilization.
If we get advanced notice of Eskom, we can actually reduce some of our machinery and therewith reduce the energy, the electricity that we need, and keep on running in the times where we are able to run. 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. Sometimes we have tripping motors as a consequence of load shedding, and 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 through the country, sometimes directly connected to Eskom, sometimes connected through the municipalities.
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. We look outside of our South African business, we have two 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 indigenisation partners in the shareholding structure at this stage. Both Zimbabwe and CIMERWA in Rwanda are managed through their own boards. 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. 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 basis 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. 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 29 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. Last year, we sold our minority shareholding in Ethiopia, in line with our strategy to focus on Southern Africa. As we talk to our business, we always talk through what we call three buckets.
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. Overall, the volumes declined in the last financial year. On the back of still a low amount of government spending in infrastructure, as well as an overall weak economic environment. Obviously, higher inflation as well as higher interest rates, curtail the spending power of consumers. 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 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 2024. 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. Despite the political tensions between DRC and Rwanda, business goes on, so we continue to export about a quarter 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 km - 500 km from Rwanda, but you have to bear in mind that 400 km - 500 km in that part of Africa is about a day and a half travel. It is not driving from here to, I don't know, Bloemfontein, right? 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. 12 to 15 years for a cement person is short term. 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 2023 was characterized by a huge increase in energy cost. Following the invasion of parts of 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 bothered us and the overall fluctuation, the little predictability that we have on coal, is, of course, something that we have to manage on a day-to-day basis. Another challenge across our portfolio is cement imports. 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 two main variables on imports. Number one is the shipping rates, and number two is the rand to the dollar exchange rate. Both have been favorable for a large part of the last financial year. 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. Nobody wants a weak rand, and we do expect that shipping rates will normalize. 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 when no longer necessary. Mokate will speak about that in more detail when he talks about Zimbabwe. 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, as 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. 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 touch 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 touch upon it, how we can blend our cement or our clinker further in order to decarbonize. Overall, a different landscape across those different markets. Of course, demand is the driver of all of it. The demand in South Africa, as you see on this slide, is very muted. We saw a very small increase between FY 2021 and FY 2022, but basically flat.
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." 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.
You see that reflected very well in this slide, except for the financial year 2021, where we had the COVID impact in our first half, therefore, we saw this demand spike coming in in the second half. Usually, you see a decline in the second half, and we saw that as well in FY 2023. A little bit stronger in FY 2023, which is the signal of the fact that the market is declining in general. If we look at our first quarter of FY 2024, 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 bottom out.
We're not counting on growth, major growth in volumes, but Njombo will pick up on a few interesting initiatives and works 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. Zimbabwe nor Rwanda has an 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. 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. 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 2025, because we'll do the project in November, December of this year. It will not greatly impact immediately in this financial year. What have we focused on, and what are the outcomes in a nutshell? We will unpack those further. We've always said, "Let's focus on the things that we can influence." What we can influence is largely related to how we operate and how we manage our cost. I'm pleased to tell you that in the outcomes, the overall equipment effectiveness of our main plants have improved.
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 2023. Something that we don't like to celebrate, because we know that we are still in an environment where risks are all around us. It was good to see that on record, it was probably one of the best years in the 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.
We've 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've 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. 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. On the bottom, you see how we're actually faring, and we've gone backwards. You might ask myself and my colleagues the question, "Hey, what is going on here? You know, 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. 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. I mentioned to you before, how that clinker factor impacts the decarbonization.
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 kg of CO2 per ton of cement in our financial year 2025. 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 1.3x-1.5x of gross debt to EBITDA. We're actually slightly below that.
Therewith, the board approved a new distribution policy, which again, will be explained in a bit more detail by Brenda. 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 once-off exercise. 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.
Thank you. [audio distortion] . Thank you, Roland, 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 three buckets or pillars that Roland referred to, being SA Obligor, Zimbabwe, and Rwanda. I will then spend some time on each pillar or operational group to analyze them in a bit more detail, including cash generation. I'll then close out with capital allocation principles and CapEx, history, and outlook. Moving on to the consolidated highlights, revenue was virtually flat at ZAR 9.9 billion for the year, 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 2023. The 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. Although CIMERWA in 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, hyperinflating Zimbabwe's results, which has occurred since 2020, as well as other significant non-cash items. When I deal with Zimbabwe later, we show the results in U.S. dollar rates at parallel rates. The movement year-on-year in finance costs, investment income, and profit on sale of Habesha , 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 Samira. Of the balance of 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 of 27% of ZAR 25 million. 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 Ltd, a listed holding company, and mainly receives 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, Samira and Botswana, and management fees received, withholding tax on the management fees received, all add up in the extra, 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. Lastly, there are non-cash items amounting to ZAR 195 million, the two largest items being a ZAR 130 million charge due to Zim hyper impacts and the associated non-monetary 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 contributions to both revenue and EBITDA by each of SA Obligor, Zimbabwe, and Samira. The numbers inside the wheel depict FY 2023 numbers and associated percentages, with FY 2022 comparatives being depicted on the outside. 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 2023, largely due to the cost increases in South Africa not being recovered in price increases and Samira's EBITDA increasing by 31%. I will now move on to discussing each of SA Obligor, Zimbabwe and Samira separately. On the SA Obligor, this slide sets out the key metrics for the SA Obligor group. Dealing with SA & Botswana cement first. Volumes were down 5.8% due to weak demand.
Average selling prices increased by 8%, but negatively affected by half a percent in product mix variance. The above items, therefore, account for the 1.7% increase in revenue for the year. Input cost inflation impacted absolute EBITDA and a 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 2024. Group services and other comprise group admin, PPC Limited, and PPC International, being a holding company of Samira.
This is what is represented in the segmentals in the financial statements. 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 Samira. 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 Samira. Right.
The driver of the SA Obligor Group is SA and Botswana Cement, 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 costs of product, variable production costs, and all other fixed costs, whether at 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 ton distributed and sold, respectively, this is shown in the bottom left table. As you can see, distribution costs per ton increased by 9.7%, variable costs per ton by 13.6%, total fixed costs decreased by 1.4%.
Importantly, on the next slide, I will show you how the distribution costs per ton and material components of the variable cost per ton compare to external PPI. In the waterfall on the right, we show how the buildup of the re-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, I deal here with some external PPI benchmarks. Coal costs comprise 18% of the variable production costs, an increase in FY 2023 by 29%. This compares to the Witbank ex-works benchmark increase of 51%. 95% of the coal purchases in South Africa are under two contracts, which have been competitively priced in the current period.
The one contract for circa 60% of our coal expires in September 2023, and the other in December 2023, from which dates we will be exposed to or enjoy the benefits of new market pricing in the contract renewals. Market prices have come down significantly since their peak in August 2022. Given where we are priced, we do not see material benefit nor risk from where we are now in the contract renewals. The benchmark for the distribution costs is a weighted CISA and diesel benchmark, which increased by 20% in FY 2023. By comparison, our distribution cost per ton 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 product 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 higher quality product, 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, or 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, funding costs of ZAR 110 million, and capital expenditure of ZAR 257 million. This 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. We'll now move on to Zim, followed by Samira. Set out on this 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 for one day in rands, and it is worth noting the impact of the exchange rate on the two years under 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. 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 two 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. Samira 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. Samira's ROIC has improved significantly to 17.6% and now exceeds its WACC in rands of 15.1%. I'll just briefly deal with the cash holdings by geography and currency and then move on to capital allocation.
You've seen the cash holdings in each entity on previous slides. 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 Meticals, 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 draw down of the debt would leave our gross debt to EBITDA in a range of 1.3x-1.5x on a 12 month forward-looking basis.
Step one is 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. Set out on the right-hand side of the slide is the actual CapEx spend over the last two years, and our outlook or forecast for FY 2024, subject to the capital allocation model I have just described. In FY 2024, the SA Obligor CapEx is stable compared to 23. Included in the sustained CapEx is Samira's Cooler Project, and the majority of the expansion CapEx is for Zimbabwe's Fly Ash project.
To conclude, looking forward, there are five focus areas. Cost containment will always remain a primary focus. Capital allocation discipline, we 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. Lastly, maintain the leverage at 1.3x-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'll 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. 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. The inland business has been a very different picture.
If you look at our volumes, 50%... above 50% of our volumes are actually going into retail. 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. 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, that mainly is on the technical products or the high-value cement products in the inland, and that has actually cushioned a bit on the blow in terms of the inland.
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. That has had an impact in terms of the EBITDA and had an impact in terms of the input cost. One of the major impact is also the limited infrastructure projects. 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 site, specifically on the inland site in Gauteng. 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.
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. We've maintained our overall strategic market position. As Roland mentioned earlier, we've managed to maintain our market share. We have to balance between the volume and the pricing in the market, even in this competitive environment. 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 over 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?
We were able to match the benchmark matrix and actually do better, as Brenda has shown to us. 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 eight kilns that we operate in our business in, throughout the country, and four of them, we consider them the A team, and the other four is basically the B team. The A team is basically graded on efficiency. They are most of the newer kilns. If you look at FY 2023, 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 filters 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 Kriel 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. As it's been stated before, we have benefited from the reduced import. Roland mentioned to two factors, which is the rand/dollar exchange and also the issue of the logistics. There is also one issue, especially applicable to the Durban port and slightly on the Western Cape, is the inefficiency of our ports. In this case, it actually works to our benefit. You can clearly see the impact of that, specifically in areas like the Western Cape, we have managed to benefit from this situation. We continue to engage the government. Roland mentioned earlier that we've seen some results in other regions. 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 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 wanna give a picture around what our 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 faced similar challenges as the cement business. 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, that is the part of the business that is benefiting quite a lot to the construction stuff that is happening. 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 the ready-mix is the fixed cost ratio, which is too high, especially when you start reducing in terms of your volume, the impact is very clearly seen as we go along.
We continue to optimize our footprint, by that, we mean putting your plant in close proximity where the activity is. 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. When we go to the ash business, it was very highly affected, partly because of the market dynamics. 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.
The highly extended product, once it is affected, then it reduces our demand for extended products, meaning the ash that we extend with. We've experienced some significant supply disruptions. When you look at Eskom, the ash comes directly from Eskom, and if there is any interruptions on the Eskom plant, that directly affects our operation as well in terms of extraction of ash and the distribution of ash. 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, two operations very close proximity to one another. When there is a lack of activity within the radius of about 70 km-80 km, that will have a direct impact onto our aggregate business, and that's what we mean by limited, localized, geographic footprint. That has been the situation in the, in the Gauteng area. We've seen volumes affected, significantly on the aggregate business. 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.
When we see a reduction in demand on the, what we call CPM, Concrete Product Manufacturers, that has got a direct impact into the aggregates business. Roland mentioned earlier the fact that Eskom load shedding has got an impact on the aggregates 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 onto 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 costs into the businesses, 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. In line with our decarbonization.
This is a lot of extended products that we have engineered to be able to get into those areas. 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. We've done quite well in terms of managing the running of our A team 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. We will be pursuing that area in terms of the ash business.
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. What is exciting is that there is now a bit of excitement in the government as well to try and do something about that. We talking about the legislative environment to allow for the waste to energy to start taking off. 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 imports, 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 when she 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 2023, we've seen a 15.8% decline in 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 we're experiencing in Zim. On the revenue side, you see, the decline in revenue is slightly lower, purely because we had a high single-digit price increase last year, to cushion the impact of inflationary cost increases. Roland mentioned it. The Zimbabwean market remains stable and solid.
Year-over-year, our volumes remain fairly flat in PPC Zimbabwe, but it's on the back of a high double-digit growth in FY 202022. If you look at the growth in FY 22, was in excess of 30%, the domestic growth in FY 2022. 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 still being dominant in the market, and there's probably close to 70% of our volumes still go through the retail channel. We're seeing a very strong pipeline of infrastructure projects. During the shutdown, we obviously experienced a decline in volumes, and those volumes were absorbed by the imports.
As Roland mentioned, you know, we've got a very solid relationships with government, where there is a shortage, they issue licenses, import licenses. When the domestic demand picks up, they withdraw those licenses. Two things happened. At the time when we had a shutdown, one of our competitors also, they had a major issue in Harare, and they've resumed production, and they've also commissioned a new milling plant that enables them, obviously, to convert clinker to cement. However, Zimbabwean market remains clinker deficit. As Roland said, you know, in Zimbabwe, milling capacity is double clinker production capacity. If you look at our clinker production capacity in Zimbabwe, is probably 55%-60% of the domestic market, and the rest is the other players in the market.
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 volumes were obviously lower than the prior year. We imported clinker to try and supplement domestic requirements. In the second half, we had major issues with power.
I always say that, you know, the Southern African power reticulation is interconnected. Any issues with Eskom in South Africa, they trigger major issues for us in Zimbabwe. 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. Going forward, we still secured extensive volumes through the infrastructure projects. We remain quite strong in the retail segment. We've also secured additional clinker supply to make sure that we are able to capture upswing in the volumes or volumes in the market.
When you look at EBITDA margins, you see a little bit of erosion compared to prior year. This is mainly due to once-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 you look at the first quarter, we've fully recovered to the levels where we've operated before. Our clinker production capacity has stabilized. We continue to see increasing transactions in US dollars. We actually, you know, even reaching levels above 80%, where trading happens predominantly in foreign currency. What is good is Hwange seven and eight has commissioned, it's a 600 MW thermal power plant in Hwange, synchronized with the grid.
In fact, I was reading an 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. That comes also with another benefit, and that is fly ash. If you recall, we've always mentioned that we secured ash that will come out of Hwange seven and eight. And we've started testing the ash coming out of the power plant, and all the results are positive. As Brenda mentioned, we'll start activating our projects to first handle the ash at Hwange and process the ash at our Bulawayo factory. That in 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 a decarbonization effect that is in line with what we've committed to, as part of our TCFD announcement. We've also, 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. This is important because it allows us to lobby government not to open borders for cement imports. The minute there is a shortage, that creates that opportunity for cement imports, and it takes time to close that gap back to normal. On a good news, we continue to pay dividends. In June, we declared, the Board of Zimbabwe declared another $4 million of dividends, that will be processed in due course. I thank you.
Thanks. That leaves CIMERWA for me to comment you and then to close out and open for questions. Am I still in order here? 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 their big sports stadiums in Kigali, in which we participate. It is also helpful to have the government as your local partner, because most of these projects, you know, 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.
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 km across various borders. We expect that domestic, as well as the export potential, will remain. I did highlight to you that we have increased regional competition in the area, and I will touch upon our plans on the next slide. How it played out in FY 2023, is that given these market dynamics, the moment CIMERWA was confronted by steep increase in coal price, for example, they implemented a 17% price increase from one day to the other. Therewith, your margins are maintained.
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 2024. 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 therewith, the overall volumes for FY 2023 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 leads here out of South Africa. They are not yet at the levels of efficiency and effectiveness as our South African A team, though. 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 number one priority. A business like ours, you will always be successful if you are the lowest cost producer into the market. 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. The moment we secure 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 Highveld 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, to our shareholders. 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 OEE, to reduce cost and carbon intensity, we continue with that. You know, sometimes people ask me: "Well, what more can you do?" In our business, there is always that little bit more that we can do. Currently, what we're focusing on is, for example, our procurement expenses. You know, are we buying at the right price, at the right terms?
Is there again, something that we can take out of that particular, 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 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 that 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.
We believe that even in today's economic environment, our first time since a long time, ability to distribute to shareholders is not a once-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 Luis in the back. Questions from the audience here. I'm not looking at my board colleagues. They grilled me last Friday, so. Otherwise, online questions, Luis?
Thank you, Roland. We have two questions online. The first question from Luke Bredeveldt of Primaresearch . He has 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.
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 upsurge that we have shown, and most of it, the bulk of it, was actually in inland. There was a huge recovery in terms of the Western Cape, and we were able to take advantage of those volumes. 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.
Thank you, Njombo. The next question comes from Paul Whitburn of Rozendal 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, large Lafarge kilns?
Yeah, I'm happy to take that, Paul. 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, you know, as PPC, we have a lot of respect for Afrimat. They're 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. Yeah, we say welcome to Afrimat. Best in class in the cement industry, we still believe that we are ahead, we're looking forward to the competition.
Thank you, Roland. We have a similar line of questioning from Chris Reddy of Allweather 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.
I 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 a fact that NPC out of the KwaZulu-Natal is actively looking for buyers. We were aware of Lafarge. It is often rumored that AfriSam might not have long-term owners after their debt restructuring. Consolidation is something that can create value. We believe in that. We've always said that consolidation doesn't fix the demand. The demand is driven by macroeconomics. Even if you consolidate, you will not suddenly see an uptick in demand. However, there are certain benefits, such as, for example, optimizing distribution networks, that you can, you know, 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 gonna 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. The future will tell whether there will be other opportunities that will come to life.
Thank you, Roland. The next question comes from Sikonathi Mantshantsha of News24. Exactly how much capacity in South Africa does PPC utilize at the moment? 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?
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, that's what can unlock the South African environment.
In addition, Njombo, how much would be the full B team capacity as well? Because the 75% to 85% is predominantly your A team.
That's the A team, 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. 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.
Thank you, Njombo. The next question comes from John Aron of 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, we continue with the conversation with the government with regards to the imports. Lest we forget that there has been movement in terms of local designation that we were able to get. 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 Vietnamese product is still coming into South Africa, and that's why we wanted a global tariff application, which we are still busy with, and we are engaging with the government.
Thank you, Njombo. The next question comes from, Luke Bredefeld, also 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 on SABS, on NRS, for us to be able to distribute the product. We've done all the testing, we should be going in the market by the end of July with the Highveld product.
Thank you, Njombo. The follow-up question from John Arron of 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.
Thank you, Roland. We have a question from Khuleleko Nyoni from PPC Zimbabwe. What is our current gearing ratio, and how does it align with our growth plans and strategic objectives?
Go for it.
The way PPC looks at its gearing ratio is on that metric of gross debt to EBITDA simply because of the noise on the balance sheet. We believe that's the most appropriate one. It's also what we've agreed with our bankers as a yardstick. Our current gearing ratio, that number is 1.2%, and therefore it's below our target range of 1.3%-1.5%, which allows us the distribution.
Thank you, Brenda. A question from Mark Narramore of Excelsior Capital: With Rwanda debt levels a lot lower, could the dividend be higher in 2024 versus 2023?
Yeah, I'll take it. It's a logical, 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 dividend earlier because of the assessed tax loss that had to be consumed. Don't expect that, you know, there will be a sudden big jump in the dividends because there was a buildup of cash that we released. Look at it more through the sustained EBITDA generation capital requirements when you make your models.
Thank you, Roland. Just a reminder to you those on the webcast to please submit your questions online. Perhaps we can check if there are any questions from the floor. Okay. There don't appear to be any further questions.
If there are no further questions, 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 2023 results presentation. 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.