Good morning. Welcome to PPC's annual results presentation for the 12 months ended 31 March 2022. My name is Kwame Antwi, and I'll be your MC for this morning's presentation. As usual, we're hosted by Roland van Wijnen, who is the Group CEO. For those of you who are familiar with our presentation format, the team will present the results to all the audience and the listeners, and thereafter, we'll open the floor for questions and answers.
For those of you who are joining us on the webcast, you can ask your questions at any point during the presentation by typing in your questions in the text box on the side of the presentation and clicking Submit. The team will collate the questions and will direct it to the responsible individual after the presentation. For those of you who are joining us via the telephone conference call, we'll open the floor for question and answers after the presentation. Without taking too much of your time, let me hand over to the team, to start and take us through the presentation. Roland.
Good morning, everyone. It is a pleasure to be with you this morning. I'm joined by our ExCo members here in Johannesburg, NNjumbo and Brenda, and all the way from Ethiopia, Mokate. Mokate is at the moment in Ethiopia for an annual general meeting preparation there, and I will touch on our business in Ethiopia just in a minute. I would like to start with this slide and take you back two and a half years ago when I started at PPC. In December 2019, I had the pleasure to present to you the interim results for the very first time. One of the questions that was asked at that time was, "How will PPC position itself?
What is the investment case of PPC?" The question was asked, "Will you need a rights issue to deal with the balance sheet?" At that stage, to be very honest with you, I said, "I don't know, but we will do everything we can to avoid that we have to do a rights issue." Where I stand today, I can tell you with certainty that we don't need a rights issue to restore our financial position. I can tell you today that all the points that you see on this very slide are actually in effect and are true. We are performance-focused. We are returns-focused. We are now leading in all the markets where we operate. We were not in leading positions in the DRC, and as part of the restructuring work, we have effectively deconsolidated DRC from our financial results as of April this year.
It is still in our results from last year as discontinued operations, but all the T's were crossed and the I's were dotted on, I think it was the 24th or the 29th of April this year. In Ethiopia, we also didn't have a leading position, and we have a minority stake in a company called Habesha, a company that needed additional capital to position itself in that market. We have indicated that we would not spend more money in Ethiopia, and we have therewith found a local investor that is willing to invest in Ethiopia, and we have signed an agreement with that local investor to sell our participation in Habesha, and we are currently underway to make that transaction reality. That is one of the reasons why Mokate is at the moment in Ethiopia.
Mokate will still present the results of Zimbabwe and CIMERWA, but he has taken a new position in our company, and that brings me to the right bottom corner, an experienced, focused, and motivated leadership team that is focused on the core of our business, which sits in CIMERWA, Zimbabwe, and of course, South Africa. Mokate has taken the role as MD for industrial and innovation. He is driving our decarbonization strategy, and he is driving the operational efficiencies that are so needed in today's environment, especially where we are confronted with a high inflation, and I will touch upon that as well. With the financial position being stable, we can now also say that we have a good, if not optimal capital structure to support our group strategy.
Last but not least, as we shared with you earlier, last financial year in November, we have a plan how to decarbonize our business in a value-accretive way. All the points that we have on this slide, we will talk through during this presentation, be it by myself, Brenda, Mokate, or Njombo. In case Mokate's connection is unstable, I will step in and be his speaking master, so to speak. Against what background were we operating in the last financial year? First of all, after the lockdowns that hit the economy so hard, we had a moment of tailwind. We had good volumes, strong retail, and we were waiting for the infrastructure government projects to kick off in South Africa. At that time, we already said that retail demand is unlikely to last, and we expected normalization of cement demand in South Africa.
That has indeed happened. The cement demand that we saw last year has marginally grown from the year before, and I will show you in the next slide that cement demand, compared to the period before COVID, can now be considered normalized. We have expected and have seen a sustained growth both in Zimbabwe as well as in Rwanda. We keep on being concerned about the importation of cement across all the markets where we operate. Rwanda is a natural importer and will always remain to be a natural importer because it doesn't have the limestone to produce cement. Zimbabwe has been importing because the local industry couldn't catch up with demand, but that will change. The Zimbabwean government is working closely with the cement industry in Zimbabwe to regulate imports to the level that is necessary. South Africa is still a bit of a different case.
South Africa is importing almost 1.2-1.3 million tons of cement, which is a full cement plant. That capacity, however, is available in the country. There are millions of dollars flowing out of the country unnecessarily, and we are not creating the employment that the country is so looking for and is so much needing. We'll talk about input costs and how we mitigate part of the input cost and how we have adapted our prices in order to protect our margins. Our focus areas stay where they are. They are focused on cash generation. They are focused on operational excellence. We continue to look at our capital structure. Our capital allocation will remain prudent for the years to come as well.
We have indicated that we would like to resume dividends in the future, and Brenda will touch upon some of the points that are related to this and the agreements that we have with our lenders under which it will allow us to resume dividends. We'll continue our focus on reducing the environmental impact and the carbon intensity of our products. If we look at what it brought us in terms of outcomes in the last year, first of all, we are proud to say that we have reduced our net debt by ZAR 1.2 billion. Coming out of cash flow from our normal continuing operations as well as the additional cash that we generated from the disposal of non-core assets. The disposal of our PPC Lime business and our PPC Aggregate Quarries Botswana.
We have implemented various measures, both through capital allocation as well as through education and training of our employees that will drive our equipment efficiency. This, in the cement industry, is one of the key indicators to make sure that we produce cement at a lower cost than our competitors. I've touched upon the capital restructure, and we can now say this is the last time that we speak about capital restructure. We have completed all the necessary steps that are related to this. I've alluded to the fact that we have started to implement our climate change strategy. In terms of numbers, I indicated to you the improved cash generation, but also our revenue has increased. Our revenue stands from our continuing operations at ZAR 9.9 billion in the last financial year. We will talk a lot about ex-Zimbabwe.
Now, we don't talk about ex-Zimbabwe because we don't like Zimbabwe. We do like Zimbabwe. But Zimbabwe's numbers are impacted by what is called hyperinflation accounting, and those have a big impact on earnings. Brenda will unpack that in greater detail during her part of the presentation. If we look at our group EBITDA, it is what I call flattish. ZAR 1.5 billion last year against ZAR 1.6 billion the year before. Ex-Zimbabwe, it is completely flat, ZAR 1.1 billion versus ZAR 1.1 billion. The group free cash flow, excluding proceeds from the disposals of PPC Lime and PPC Aggregates, has actually slightly increased from last year, ZAR 0.7 billion against ZAR 0.6 billion the year before.
The EPS and the HEPS will be unpacked by Brenda when she talks about the impact of the non-cash items and how the impairment reversal showed last year in our results and of course, that hasn't repeated this year. On the right hand of the slide, two items that I would like to pick because the rest I have talked about. The debt facilities overall in South Africa have been refinanced, signed and sealed. PPC Zimbabwe debt-free. Last but not least, PPC Zimbabwe continues to be in a position to pay dividends to PPC Limited. In the last financial year, a total of $6.2 million was received, and post the reporting period in June, an additional $4.4 million was received. The background of the group is strong, solid footing, and I will hand over to Brenda to unpack the financials in greater detail.
Good morning, everybody. So just to give you an outline of the presentation, I will start by taking you through the income statement, deal with the cash flows and the debt position. As Roland mentioned, all the numbers shown in the presentation are from continuing operations. In other words, the DRC is excluded. It's still held as a discontinued operation at March 2022. Again, just to reemphasize Roland's words, I'll consistently deal with variances year-on-year, excluding Zimbabwe, as this entity's results are really distorted by the hyperinflation. Right, moving on to revenue first. Again, looking at revenue from continuing operations, the overall group revenue increased by 11% to ZAR 9.9 billion due to double-digit volume growth in Rwanda and Zimbabwe and normalized volume growth in South Africa and Botswana.
South Africa and Botswana increased by 4%, with a volume increase of 1% supported by achieved price increases of 5%. CIMERWA's cement sales volumes showed a 20% increase year-on-year, with revenue up 7% to ZAR 1.2 billion, owing to rand's strength against the functional currency. In Zimbabwe, cement sales volumes increased by 28% year-on-year due to retail demand and support from government-funded projects. Selling prices were adjusted in local currency and US dollars to reflect currency depreciation and input cost inflation respectively, resulting in revenue increasing by 34% to ZAR 2.2 billion. Excluding Zimbabwe, the group's revenue increased by 5% year-on-year. Looking at cost of sales. Overall, the group cost of sales increased by 19%, very affected by the 85% increase in Zimbabwe's cost of sales due to hyperinflation.
Excluding both Zimbabwe's cost of sales and all depreciation, cash cost of sales increased by 7% year-over-year. The increase of 7% should be seen in the context of both volume and price increases and PPI in the two main jurisdictions being South Africa, Botswana and Rwanda, which can be seen on the right-hand side of the slide. South Africa and Botswana's cost of sales and other administration expenditure increased by 7% compared to volume and PPI increases of 10%. Similarly, CIMERWA experienced collectively a 28% increase in volume and PPI, and its cost of sales in Rwandan francs increased by 25%. Both South Africa, Botswana, and CIMERWA therefore contained their costs below volume and input cost inflation.
Given the revenue growth that I just mentioned of 5% for continuing operations and cost increases of 7%, all excluding Zimbabwe, EBITDA, similarly excluding Zimbabwe, decreased by 2% year-on-year. South Africa and Botswana Cement decreased by 5% and Rwanda's EBITDA was flat in rand terms. Materials EBITDA improved to ZAR 41 million compared to a ZAR 8 million loss in the prior year. Zimbabwe's numbers are again distorted by hyperinflation and exchange rates, but it is worth noting that Zimbabwe has maintained generating some 60% of its revenues in hard currency being US dollars, and this is important as this generation of hard currency enables the payments of dividends to PPC. This is an important slide, and Roland referred to it earlier.
Our earnings are very murky, and the objective of this slide is to demonstrate that notwithstanding the decrease in earnings of 89% that you see on the face of the income statement, once Zimbabwe and certain non-cash items are excluded from the group's earnings, the decrease in earnings is 1%, which is not out of line with a decrease in EBITDA of 2%. I am dealing here with earnings before tax. The significant non-cash items are shown on the right-hand side of the slide and all exclude Zimbabwe. The most material item, as can be seen, is the impairment reversal last year of ZAR 1.3 billion, compared to a small net impairment in the current year of ZAR 38 million.
Once these have been adjusted for and Zimbabwe's losses and profits eliminated, and also adjusting for depreciation and finding costs to get a comparable sort of EBITDA number, continuing operations earnings before tax decreased by 1% year-on-year. Now moving to taxation. The effective tax rate on the face of the income statement is 111%. I'd like to make 2 points on this slide. The first is that the actual percentages, which are percentages of profit before tax, appear large due to the size of the profit before tax being ZAR 186 million. In addition, there are material once off items that should not recur. Focusing on a few of the non-recurring items, the first being non-deductible expenses. This mainly relates to the final restructuring costs incurred to complete the capital restructuring and they're not allowed for tax.
The underprovision item relates to tax paid on the reassessment by SARS of the 2017 and 2018 tax returns. The non-cash items are largely due to losses incurred by PPC, 3Q and Pronto and group services on which deferred tax assets are not raised, as well as non-monetary losses in Zimbabwe and hyperinflation impacts which are neither taxable nor deductible. Lastly, the group paid tax of ZAR 22 million in withholding taxes, which is largely due to dividends received from Zimbabwe and Botswana. This is not a non-recurring event nor a non-cash item, but simply being highlighted as the price the group pays for repatriating funds to South Africa. I'm missing a cash CapEx. Oh, there we go. Here's the CapEx slide. Touching briefly on CapEx ahead of cash flow. This slide depicts the trend of CapEx over the years.
We did underspend in 2021, and most of it was on maintenance. In 2022, capital expenditure normalized back to 2020 levels and the ZAR 5.3 million that you can see there includes some ZAR 40 million spent by Zimbabwe on the ESP project. In FY 2023, we expect our maintenance and sustaining CapEx spend to be in line with that of 2022, between ZAR 500 million and ZAR 550 million. Any expansion CapEx must be value accretive and meet our WACC at a minimum. Right, this slide shows the waterfall of cash flows. What is noteworthy is that the cash generated from operations after movements in working capital increased by 6% to ZAR 1.454 billion, and free cash flow after CapEx and other investing activities increased from ZAR 649 million to ZAR 675 million.
The group received ZAR 503 million from the sale of Lime and Botswana Aggregates, which funds were all used to reduce debt. The cash flow for financing activities, being -ZAR 959 million, includes debt reduction of ZAR 970 million, which is depicted on the next slide. Here we see the movement in gross debt from ZAR 2.6 billion at the beginning of the year to ZAR 1.6 billion at the end. As well as the degearing, cash also increased in the group, leaving net debt at ZAR 1 billion from ZAR 2.2 billion in FY 2021.
Zimbabwe is debt-free, and CIMERWA's debt of RWF 377 million has all been converted to Rwandan francs. The South African gross debt to EBITDA ratio is depicted at the bottom of the slide and shows an improvement from 2.2 times to 1.4 times. This is important, and Roland referred to it earlier. We have agreed with our bankers that at a level of 1.3 times, PPC can commence declaring dividends. Not going to put any forecasts out there, but we're very close. Looking at the cash position, I just want to show you where the cash in the group is held. The left-hand side of the slide shows cash holdings by country, and the right-hand side of the slide shows by currency, which shows that 45% of the group's cash is held in dollars and 25% in rands.
The U.S. cash holdings are both in Zimbabwe and Rwanda, with 85% of Zimbabwe's currency being in rands or dollars. In addition to the $6.2 million dividends, Zimbabwe paid a final dividend after the year-end of $4.4 million. To close briefly, before I hand back to Roland, the balance sheet has been satisfactory, satisfactorily de-geared through cash generation and disposal of non-core assets. We have refinanced our debt facilities in South Africa with appropriate tenures and a much more effective interest rate. On internal controls, further good progress has been made during the year, but this will remain an area of focus for some time. In addition to internal controls, containing costs will be a key focus in 2023, coupled with tax planning initiatives to reduce the effective tax rate. Thank you for your time, and I'll hand you back to Roland.
Thank you, Brenda, for the insights in the financials. Before I hand over to Njombo to speak about the South African market, I would like to give you an overview of the operational review across our portfolio. In order to do that, I'll take you back to the very beginning where I spoke about normalization of the cement demand. In this picture you see on the left side, South Africa and Botswana cement volumes comparing FY 2020, pre-COVID, FY 2021, the COVID year, and FY 2022, which we can call post-COVID. You will see that compared to FY 2020, the South Africa and Botswana cement sales volumes are up by 6%, which is roughly 3, a little bit less than 3 on a year-on-year basis.
That very much corresponds with something that is a long-term correlated indicator for cement sales, which is the GDP of a country. Looking forward, in absence of major upswings coming out of temporary infrastructure projects, one can expect low single-digit growth environments in South Africa. On the right-hand side, you see the markets of Zimbabwe and CIMERWA. The red block is CIMERWA, it's the Rwandan market demand, and on the right-hand side, you see Zimbabwe and our sales in Zimbabwe. You can see there a very strong growth. That reflects for Rwanda the growing environment coming from a very low base in terms of consumption of cement per capita, and in Zimbabwe, driven by the same plus infrastructure spend and retail, as it is not abnormal in a hyperinflation environment for people to invest in durable goods such as housing and other elements that require our products.
This is the background from a volume perspective. We've spoken a lot about inflationary pressures. What we've shared with you here is the cost breakdown of South Africa Cement. If you look through this slide, you see that from distribution, electricity, and coal, more than half of our cost base is affected by energy pricing. That has led, in FY 2022, to a general external price increase of 9%. A lot of our input materials have gone up double digit. For those of you from South Africa, I don't need to tell you about Eskom's price increases, but those things are impacting the cement industry. Thanks to the work done by the teams on operational efficiency, we could mitigate 3%, and we had an internal cost inflation in the South African cement business of 6%.
5% was the increase on average in our selling prices, taking into account as well product mixes, and the effect that the Botswana pula depreciated against the rand. That has left us back to the numbers that Brenda shared with you in terms of EBITDA and EBITDA margin. If I now show you the EBITDA position and the revenue position throughout the group, you will see this in the perspective that I just shared with you. You'll see that the contribution to group revenue is still largely coming from South Africa, and that will not change. South Africa is the engine of PPC, both in terms of revenue as well as in terms of EBITDA. We are pleased that materials is playing a significant role and has turned a negative EBITDA contribution into a positive one.
You can see how Zimbabwe, at the face of the EBITDA, has reduced from a 30% contribution to 26% contribution. On the right-hand side of this slide, you see the EBITDA margins across the segments over the years. As pleased that I am with the fact that we had a strong cash generation and were able to reduce our net debt by ZAR 1.2 billion, I am unpleased by the fact that we are not reaching 20% EBITDA margin in South Africa Cement. That as a matter of fact, we have gone back from 16.7 to 15.2. Rest assured that we will not be either resting or being happy until that number is going towards 20%. On that note, I'll hand over to Njombo, who will tell you how we're gonna get there.
Thanks, Roland. Good morning. I think, as it has been said already, we have actually seen some upside potential from industrial and construction segments, and this is driven mainly by private sector. In terms of the coastal region, we actually are quite pleased with the fact that the escalating shipping costs has actually held back some of the imports in the beginning of this year. The cement sales volumes, that is in line with the prior year and with the decline in the retail. This is something that we actually do expect. We did mention last year that we were as much pleasantly surprised by the unexpected upswing in the post-COVID period, but we actually recovered quite well.
However, the demand condition that prevails has created quite a competitive environment in terms of where we operate. That is also exacerbated by the unreliable power that we face in the country, and more significantly, the inefficient rail service that we are facing, which has an impact on our cost, especially in the movement of raw material in between our operations. That has got a very significant impact on the costs. In terms of our focus, we are very much focused in terms of how we supply our products, the value proposition that we have always relied on in terms of being an industry leader and providing the products.
One of the areas that we have set out to focus on was optimizing our operation to mitigate those input costs, which are definitely higher than what we can get from pricing out there. We have a special focus on the clinker factor reduction, which we have managed to achieve, and that has actually brought down at least some of those input costs that has impacted us negatively. We're also fast-tracking the use of alternative fuels, especially on our coastal factories, where we try to mitigate the costs of energy. There is a very special focus in terms of upskilling our people. I think people make the difference in an operations like ours, and that's where we are focusing, and this year is the year of talent in terms of improving our situation.
This has resulted in us managing to reduce our clinker factor in line with our decarbonization strategy, which has also seen some improvements in the operational costs. I'm very pleased with the improvements that we have seen specifically on our Slurry Kiln nine and the Hercules vertical roller mill. We have actually seen some record runs in those units. We've managed to maintain margins in the Western Cape. Despite the fact that it was very slow to pick up after the COVID, we at least managed to get some volumes going in that area. We have managed to maintain our market share. We did mention that we will not be chasing volumes at the expense of price, and we've just done exactly that.
However, we need to maintain a balance between the price and the volumes, 'cause we are leading in terms of the pricing. In some of those, some of the areas, we do get limitations in terms of the price increases that we would like to get, due to competitive environment that we are facing. In terms of the financial impact, I think it is pleasing that, despite the challenging environment that we are operating in, if you look at our volumes being in line with last year, and considering that we use FY 2020 as a benchmark, we were relatively 6% up, which is very pleasing post the COVID.
Our revenue is up by 4% and EBITDA reduced by 5%, understandably so, as a result of the costs and also the volume impact. As Roland mentioned, what is displeasing is our EBITDA margin that has gone backwards, which could have been worse if all those operational activities and efficiencies were not put in place. Now, we speak quite a lot about the imports and the impact that the import has got on our business. If you look on the graph on the left-hand side, that's the resultant of last year where imports have gone up by 19%.
Now, to put it into context. This totals into about 1.2 million tons of clinker, which is an equivalent of a full cement factory that employs directly close to 400 people and indirectly a couple of thousands of people. That's the impact of imports into our space and into this country. If you look on the right-hand side, we just gave a picture of what it looks like in the first 4 months of the year. While it is very welcome and we've seen the impact of this on our coastal volumes starting in this year. However, a 14% reduction, that shows the unreliability of imports into a country.
When this happens at the time where demand is available, then it means we need to very quickly bring back capacity which could have otherwise have been put outside to accommodate these imports coming into the country. We know that this is unsustainable unless the government does something about imports, because as soon as all the challenges on the logistics are gone, then this may bounce back. In terms of our materials business, I must say I'm very pleased with the performance of the materials business in the past year. This is at the background of the muted demand due to the infrastructure where the materials business would be actually getting their volumes. We are seeing growth in the informal housing segment, which has really boosted our aggregates demand.
Obviously, our change in the route to market strategy has also benefited us in that way. Then the agricultural sector benefited from good rains, but we've seen that the steel industry, where we're actually putting up a lot of our aggregates volumes, has also remained muted. The ash sales volumes, if we recall prior year, we had a big bumper with the retail space where ash was actually sold in the blended products. We've seen a decline in the volumes, and also the availability of the slag has impacted the ash volumes. In terms of the focus on the materials, we're focusing on capturing the pockets of growth that exists in the market. By pockets of growth, we see a lot of private sector warehousing, which are geared to support the online shopping.
We have actually developed specialized flooring mixes for those large panel constructions that are required in that space. That has also helped us to optimize pricing in that segment, which has seen an improvement in our margins on the materials business. We also increased the dolomite offering for the concrete sector, and this is some specialized efforts that are being put in by our materials team. We have also increased the sales of classified ash, and that also boosts the margin into the materials business. We have seen some slight growth in the exports of ash specifically to Mozambique.
In terms of the ready-mix division on the outcomes, we are known as a leading supplier in that space, and as I mentioned, we actually developed some specialized flooring mixes for that part of the segment. What has happened, especially on the Gauteng area, we have capitalized on that growth in the private sector. This has resulted in our materials business, Pronto specifically, to be awarded the PMR Diamond Award, which is an award for a top ready-mix supplier in South Africa. We're quite pleased with that and very pleased with the team because of the efforts that they are putting in. In terms of the classified ash, as we intended, we have seen some growth in that space and specifically on the ready-mix on those specialized mixes.
We also increased our exports into Mozambique. The results in terms of our materials business is very pleasing, where we've seen a growth in both the ready-mix and the aggregates volumes by 7% and 10% respectively. As I mentioned before, the ash was quite high in the year past. From a very high base, we decreased by 17% on the ash business.
In terms of the performance, we have seen that the aggregates and ready-mix volumes increased by 16% and 3% respectively, whereas we saw a decline on the ash business. What is very pleasing is actually the performance in terms of the revenue generation and the EBITDA on this material business, where we ended up with a very well improved EBITDA and a very good margin in terms of this business. I'll hand over back to Mokate. Mokate, are you on the line?
Yes, I'm on the line. I hope I'm audible and you can see me.
We cannot see you, but you're audible.
Okay. Good afternoon, everyone. I can't see the slides, so I'll be reading from my iPad. I'll first start to give you a bit of a flavor of Zimbabwe's performance through the reporting period. As my colleagues have mentioned, we've seen significant growth in volumes in Zimbabwe despite challenging macroeconomic environment. Our volumes grew by 28% year-on-year, and the biggest driver for this growth has been growth in the retail space as well as infrastructure projects. We've been able to maintain our market share in Zimbabwe above 55%, with a slight increase year-on-year. However, what is concerning has been the rising imports out of Zambia. We've seen imports occupying between 20%-25% of the market share.
This is mainly because of supply challenges some of our competitors had in Zimbabwe, and the bulk of this product went into the northern market of Zimbabwe. With regards to pricing, in U.S. dollar terms, we've maintained our pricing quite stable. I must give credit to the Zimbabwe team. In ZWL terms, we did all our best to track the inflationary cost increases with the ZWL pricing. What Brenda also mentioned, we've successfully been able to get most of our sales, more than 50% of our sales in foreign currency, which obviously generates what we call free funds that are needed for operational requirements as well as to pay dividends. In terms of industrial performance, the power issue remains a big concern in Zimbabwe. We've had several issues with power supply.
What is pleasing is that we've made progress with our 30-megawatt solar PPA agreement in Zimbabwe. Construction site here has commenced, and we expect construction to start in the next two months. The expectation is in the first quarter of FY 2023, we should be connected to the new 30-megawatt solar power supply. The other issue that we had in Zimbabwe because of the growing demand of cement with 28% growth in our volumes, we needed 100,000 tons of clinker to support this growth in cement volumes. We imported clinker from Voice of Africa as well as domestically to support this growth in volumes.
In addition to the 100,000 that we required to support the 28% increase in volumes, we needed 60,000 tons of clinker to prepare fully for a 67-week shutdown that was needed on our Zimbabwe plant. I'm pleased to announce that we've completed the electrostatic precipitator project beginning of June, and we have since started up the kiln. Going forward, we expect Zimbabwe to be self-sufficient with clinker supply. In terms of financial performance, I won't put very much as Brenda, both Brenda and Roland have covered that. I think what is pleasing is, you know, the declaration of dividends out of Zimbabwe using the free funds. With this strong performance, we expect this to continue as the situation changes in Zimbabwe.
Can you go to the next slide to cover CIMERWA. In Rwanda, if you all recall, in the first half, there was a bit of concern about CIMERWA's volumes. In the second half, there's been very strong recovery in CIMERWA, and this is driven by, you know, infrastructure projects. As mentioned during the half year, we've won the tender to supply the new Bugesera International Airport volumes, and this has really supported our volumes in the second half, but also more importantly, we've been able to unlock export volumes into the neighboring DRC. We've seen our export volumes accounting for 18%-24% of our total sales. Also credit to the Rwanda team as the volumes grew 30% year-on-year.
What we've also been able to break as a record, we've been able to dispatch more than 510,000 tons of cement, which is actually a record for our CIMERWA business. What you've seen with regards to our market share, we've maintained our market share quite stable, around 45%, despite a new entry coming into that market. Going forward, we expect the volumes to the Bugesera International Airport to continue as this project is still ongoing. It's also pleasing to announce that we've also won a tender to supply cement to the new stadium that has been built in Kigali. With regards to pricing, our prices have remained relatively stable. Year-on-year, we've actually had a slight price increases in Rwandan francs.
Because of the strengthening of the rand against the Rwandan francs, we've seen our EBITDA slightly muted. In dollar terms, our EBITDA in Rwandan francs went up by almost 10%. Industrial performance, again, in CIMERWA, we had issues with power supply in the last quarter of the calendar year. That has been resolved. Overall, the kiln year-on-year produced the same quantity of clinker. Despite the increase in volumes, it's mainly attributed to optimization of our clinker factor in our Rwanda business. On the cost side, as we've made commitment towards decarbonization, we continue to drive our coal replacement in Rwanda.
We've been able to achieve 12% coal replacement in Rwanda, and we are actively looking at additional sources of fuel in the neighboring countries to continuously optimize our fuel usage in Rwanda. Fuel remains one of the big cost item for our Rwanda business. To drive our clinker factor, we've also invested in additional crusher to optimize the usage in Rwanda. We've been able this financial year to convert some of our product offering into higher-end cements with an aim to really continuously drive our clinker factor reduction program in Rwanda. On the financial performance, as I mentioned, EBITDA year-on-year is flat in rand terms. However, it is 14% up in Rwandan francs. It's mainly because of the strengthening of the rand against the local currency. Jill, we can go to industrial slide. Great. Great.
On the safety side, if you look at the group performance in terms of LTIFR, we've been able to reduce our LTIFR from 0.26 to 0.19 with 0 fatality. I think this confirms our effort to provide a safe environment to our employees as they come to execute their functions. Next slide, Njombo. Or wherever the driver there. The next slide, actually, you know, reconfirms our commitment that we shared with the market in November last year, when we disclosed our GCCA commitment and our commitment to reducing our carbon footprint in the next until 2030 and our net zero commitment in 2050. On the next slide, I'll just give a flavor of some of the work that has been done.
If you go to the next slide, and that looks at the clinker factor. One of the key levers for us to reduce our carbon footprint is the reduction of the clinker content in cement. I'm pleased to announce today that we've been able to achieve a 5% year-on-year reduction in clinker factor. This equates to approximately 160,000 tons of clinker per annum. This is quite important. One percent of that clinker factor reduction equates to roughly 7.5-10.5 kilograms of CO2 per ton of cement. This shows the importance of this lever in really achieving our commitment that we've made towards decarbonizing this industry. While we are optimizing the clinker factor across our business, we are also looking at making sure that we run our kilns as optimum as possible.
In the next slide gives us indication of what we call Net OEE. As we mentioned previously, this Net OEE is computed by taking the available running hours of our kilns in a year, and we multiply that by a production index, which is based on what we call best development practice. Year-on-year, our OEE has remained flat, and this remains a very strong focus for us to mitigate the impact of inflationary cost increases and run our kilns as best as possible. We have major challenges with power supply in both Rwanda and Zimbabwe. With all the work that we're doing in Zimbabwe, we expect this impact to be reduced going forward. In South Africa, the biggest challenge has been the design challenges on SK9.
After commissioning, we had issues on SK9 in terms of achieving design capacity, and that has been resolved. I'm pleased also to say in May, SK9 broke clinker production records to show the progress that we're making towards improving our Net OEE. One of our focus in this financial year is really geared towards making sure that we improve our Net OEE on all our operating units. If you look at the next slide on thermal energy, you see our thermal energy year-on-year is also flat, which really connects quite strongly with our Net OEE trend. Because if you run your kiln better, you should start deriving also efficiencies coming out of your thermal energy consumption as well as your energy consumption.
Just to give a bit of, you know, monetary relationship between this thermal energy and rand and cents, every 1% of thermal energy reduction equates to ZAR 1.35-ZAR 150 per ton of cement. That shows the importance of this lever for us going forward. One of the few things that we'll also look at, as Njombo mentioned, is obviously looking at alternative fuels at some of our factories. Dwaalboom included, as well as Rwanda, to see how we can optimize this lever in our efforts to decarbonize our business. Thank you.
Thank you very much, Mokate. Glad that the connection worked, and good luck with all you have to do in Addis. Ladies and gentlemen, I'll bring it to a summary and a close before we hand over to Kwame to lead us through the Q&A session. In summary, four bullet points. Cash generation strong in the last year on the back of operational performance and disposal of non-core assets. With that cash generation, we have restored a solid financial position for PPC. We've implemented measures to improve our efficiencies and to increase our operating equipment efficiency, and we have completed our capital restructuring.
Going forward, we will redouble our efforts to mitigate inflationary cost pressures that we have, and we will continue to focus on cash generation and are, of course, ready for any upswing in demand as it may come from the government-led infrastructure programs that are in the pipeline. Operational excellence is necessary for our business and will continue to be our focus, and we will continue to keep you updated on how we progress and some of the main indicators that were shared by Mokate earlier in the presentation. We can now say that we are building from a strong core, and not just a strong core of the assets that we have or the people that we have. We can now also say that we're building from a strong financial position. We will continue to strengthen our market leadership in South Africa, Botswana, Zimbabwe, and Rwanda.
We will drive operating efficiencies hard, and therewith optimize the financial returns, accelerate decarbonization, and continue to work on a culture that is always performance-driven. The enablers are our customers, and we are grateful for their continued loyalty. We deliver beyond strength of what sits in the bank. It's our services, it's our people, it's everybody who makes it happen. We've introduced the culture of Jabali. Jabali stands for someone who is strong as a rock, and that is what our products stand for, that is what our people stand for. I'm grateful to what everyone in team PPC has done over the last month and will do in the months that come. Our resilient financial position positions us well for the future, and therewith, I can now present you this slide once again with much more conviction as 2.5 years ago. With that, I close. I thank my colleagues, and I'll hand back to Kwame to lead us through the Q&A, please.
Okay. Thank you, Roland. We have a few questions on the webcast. Louise, the first one is from Anthony Clark.
Thank you, Kwame. You have actively engaged with the market, yet the recent FY 2022 trading update shocked the market and the share price slammed over 20%. Today, it's back to ZAR 3.09. The optics to the trading update and the PPC management and VCP sales earlier in the year now raise an additional eyebrow. Please make a comment on these events. The optics clearly do not come over well to the market in light of these moves.
I'll take the question. Thanks, Anthony. Look, the trading that was done in January by myself, and not by broader PPC management, by myself and my partner, as well as by VCP, has been explained at the time with the information that was available at the time. The trading statement that we released last week is an obligatory trading statement that we need to release the moment the board feels comfortable with the numbers and there is a 20% deviation in EPS and HEPS, which was the case. In that trading statement, we have also explained our EBITDA movement, and we have spoken about cash generation.
Everything you heard today is supporting that trading statement, and everything we released to the market in terms of the operational update at the end of March has been confirmed by the numbers today. As to the share market, the share price on the market and how it reacted, that raised my eyebrow, not so much the other things that you've asked in the question, Anthony.
Thank you, Roland. We have a couple of questions from David Fraser at Peregrine Capital. The first one: Was the 160 kilotons of clinker bought, brought into Zimbabwe all produced by the SA operations?
No, David. Thanks. No, it was not. I'm taking this for you, Mokate. It was in your speaker's notes if your connection would fall away. 70,000 of that was coming out of PPC South Africa, David, and 90,000 was coming elsewhere. There are multiple reasons for that. As you know, we are operating in the south as well as in the north of Zimbabwe with our Harare clinker factory. It is much more efficient for us to purchase clinker from the northern part of Zimbabwe from our competitors. We've also paid that, by the way, in Zimbabwean dollars. We have even brought in something out of Zambia. What we needed for the south, the 70,000, came from our operations in Slurry.
Thank you, Roland.
You wanna add something, Mokate?
Yes, Roland. One of the challenges is actually the available capacity out of South Africa into the rest. That's why we actually had to resort to imports or actually domestic supply from Harare.
Fair enough.
Thank you, Mokhati. The next question from David: What are the remaining debt levels in Rwanda split into local and hard currency, please?
I'll hand it to you, Brenda. It is in the presentation, actually.
Sure, David, no problem. Rwanda's got ZAR 377 million equivalent of debt at 31 March, and it's all in Rwandan francs. The facilities were all renegotiated 100% local currency now.
Thank you, Brenda. Here's the third question. The Rwanda volume growth appears to be on the back of low margin exports. Please explain the strategy behind this.
The Rwandan volumes that are exported are very high margin, actually. There's no low margin exports in Rwanda.
Thank you.
It's actually sorry, if I may build just on the answer. As you know, the plant in Rwanda is very closely located to the DRC, so it's actually part of the natural market. I wouldn't call this export in the same sense as Vietnam is bringing exports into South Africa. Very different.
I think he's referring to the margin as well.
The margin of our exports out of Rwanda is actually better than the margin we have on some of the product that stays in Rwanda.
Okay.
Thank you, Roland. We have two questions from Mark Narramore at Excelsia Capital. The first one: How much cash still needs to flow from the lime sale?
Sure, Mark. At the end of March, we had received everything bar sort of a net ZAR 13. We owed ZAR 12 due to a tax adjustment that we paid out early April, and they owed us the deferred consideration of ZAR 25, which was duly paid at the end of April. As we sit today, everything's been received.
Thank you, Brenda. The second question from Mark: What is the current replacement value of cement asset, and what does that translate to on an EV per ton metric?
It's a bit of a tricky one, Mark. You know, if you build a new cement factory, you're probably talking, depending a bit on how you build it, where you build it, $250 million to replace something that we have in one line in Slurry, so in SK9. I'm looking to Njombo. If you would multiply that, you know, for South Africa, we would build one. If you have to replace everything, right? Let's say you spend $700-$900 million just to replace your assets in South Africa, I would say. I see Mokate nodding as well. I see Njombo nodding. That's about the right number, Mark.
Thank you, Roland. The next question from Roy Cokayne at Moneyweb: PPC had a strategy of expanding into Africa to take advantage of growth opportunities on the continent and diversify the company's income streams. Does what has happened to PPC's operations in the DRC and planned in Ethiopia imply a reversal in consolidation of PPC's future operations, or are there still growth opportunities in Africa that PPC will pursue?
Thanks, Roy. We have agreed with the board that our focus is on Southern Africa, and not on Africa as a continent alone. The reason for that is twofold. We need to focus our resources, both financial resources as well as human capital resources. What, of course, we have seen by some of the investments made in, for example, Ethiopia and DRC, yes, there is high growth, but there is also high risk. And we have a duty to manage risk, as much as enable growth. Our strategy in Southern Africa, and our decarbonization strategy is what will lead the growth path, not so much further investments across any country in the continent.
Thank you, Roland. The last question for now is from Steven Hurwitz from 36ONE Asset Management. How is PPC able to extract cash from Zimbabwe when other South African companies operating in the country are struggling to do so?
Steven, I don't know about the other companies, of course, or I can't speak on their behalf. On our behalf, as mentioned by Mokate, more than half of our revenues is coming in other currencies, so it's coming in South African rand, U.S. dollars, et cetera. Under the South African exchange regulations, you can use those so-called free funds for dividend payments among others.
Thank you, Roland. We have a follow-up question from David Fraser of Peregrine Capital. He has asked, with 20% volume growth, surely we should have anticipated significantly better EBITDA margins in Rwanda. Why did this not come through? Were you unable to pass on input cost push into selling prices?
You're not wrong there, David. The reason is that indeed the input cost inflation was very high. We have put a double-digit price increase through in this financial year to maintain our margins. Also, bear in mind that the margins are roughly around 30%. If you go much more beyond that, you will start to attract even more imports that already are in the market. This 30% is a bit of a natural barrier in the cement industry. There might be years that you go slightly above it. You remember, David, when PPC Zim at 38%, I said, "This is not sustainable." That is the main reasons. We're also operating in an environment where, of course, the government will start to look at profiteering if we just milk the market completely.
Thank you, Roland. A reminder to everybody who is participating, if you would like to ask a question, please type it in the question box on the webcast page. We have a question from Lonwabo Maqubela at Perpetua. Given the inflationary environment, why do you think pricing in SA remains weak relative?
I will hand it over to Njombo in a second, Lonwabo. The very simple reason for it is that there is an overcapacity, and we have competitors that are more focused on volumes than price. You have more.
I think that is it in a nutshell. What we said is we're going to focus on pricing in terms of PPC, and we have picked up price. Like I said earlier, it's a balance between the volume. We're quite happy with our market share at this stage. We are not chasing volume. However, when we start having an impact on the volume, we will actually be looking at our pricing. I agree with you. I think cement in South Africa is actually underpriced.
If I just build on that, on what Njumbo said, Lwaba, you remember that when Njumbo's team increased prices double digits two years ago, we did lose volumes. When Njumbo said he's happy with his market share, that means, you know, we are not willing to lose more volume on the back of price. We have also to look after our operating efficiencies.
Thank you, Roland. I think we can give a few more minutes just to see if any further questions come through.
You're much more organized.
There don't appear to be any further questions.
If there are no further questions, we'll hand over to Kwame for the closing.
Let me do that.
You can do it whatever you want.
Okay. Once again, thank you everyone for joining us. If you have any additional questions, please don't hesitate to contact us. We've got our details at the back of the presentation and on the website, and we'll endeavor to try and get back to you within 24 hours. For those of you who are joining us after for the management meetings, we'll see you later on, and enjoy the rest of your day. Bye.