Good morning, everyone. Welcome to PPC's interim results presentation for the 12 months ended September 2021. My name is Kwame Antwi, and I'll be your MC for today's event. We are hosted by Roland van Wijnen, who is the Group CEO of PPC. He's also joined by his executive team. They're going to take us through the results presentation, but as usual, for those of you who are joining us on the webcast and also on the phones, you will be in listen-only mode. After the formal part of the presentation, we shall open the floor for question and answers. Those of you who are joining us on the webcast, there is a text box in the webcast, so you can type in your questions at any point during the presentation.
We will collate the questions, and then we'll pass it on to the team members after the presentation. For the guys who are joining us on the conference call, your operator will take you through the prompts on how to ask your questions when the floor is open for questions. Without taking too much of your time, let me hand over to Roland to take us through the results. Roland?
Thank you very much, Kwame. Good morning, ladies and gentlemen. It's a pleasure to share with you our results for the first six months of this financial year, together with my colleagues, Njombo, Brenda, and Mokate. As usual, I will open with a few of the highlights, a little bit of the backdrop of the industry, and then I will hand over to Brenda, who will unpack the financial results, followed by an operational update, where Njombo and Mokate will talk through the main developments in their respective markets. Before I start, within PPC, health and safety is important to us. I would like to share with you the main statistics that we look at. On the top of the slide, you see the lost time injury frequency rate.
That has been relatively stable, and we're not satisfied where we are, despite the fact that we are slightly better compared to last year. Of course, COVID-19 is still with us. As I speak to you, I regretfully have to inform you that since the outbreak of the pandemic, seven of our colleagues have lost their lives to the pandemic. In total, we had 836 confirmed cases throughout the group, of which 828 have fully recovered and returned to work. As vaccination becomes available, it is imperative for all of us to protect ourselves and our loved ones. Thanks to the vaccination drives that we have done in all our countries, I am relatively pleased to report to you that 60% of the staff that is working in our operations throughout Africa is now fully vaccinated.
Another 9% has had their first jab and will soon join the fully vaccinated group. That will bring us close to 70% before Christmas. That is not enough. We strive to come very close, if not fully, to a 100%, as vaccination is our best way out of the pandemic. While we were in the middle of capital restructure over the last two years, we have not stood still to look at the future. When we look at the future, we know with the recent completion of COP 26 in Glasgow, that climate change is upon us. We are therefore very proud that next week we will release our first report along the recommendations of the Task Force for Climate-related Financial Disclosures, TCFD. In that report, we will describe how climate change impacts our operations and what actions we will take to mitigate that.
Equally important, we recognize that we are a contributor to the CO₂ gases in our atmosphere, and therefore we will also be part of the solution. We have set out our carbon- intensity targets on the short and the medium term, joining the many companies that have a long-term commitment to net zero. While that long-term commitment is important, we also have to recognize our starting point as an African company. What we have set out to do is to reduce our carbon intensity by allocating capital to projects that are not only reducing the CO₂ impact, but are, at the same time, value accretive. On the medium term until 2030, we see a more important element of using waste to replace coal, for which we will work with the governments in the various countries where we operate to make that possible.
I'm very pleased to invite you to a webcast that we will be organizing next week, where we will go into the specifics of this important project. Looking at the highlights of our business over the last six months, I would like to read this slide from right to left, as in our opinion, the outcomes is ultimately what counts. I'm very pleased to say that we have delivered once more improved results and were able to repay debt. Brenda will unpack that, and in the operational review, we'll go into more detail as well. Two years ago, more or less, I had the pleasure to stand in front of many of you for the very first time, pre-COVID.
I was asked the question, "How will you restructure the debt of PPC, and will you need a capital raise to do so?" And I answered, in all honesty, "I don't know." As at that stage, we did not know. I also said that we will, as team PPC, do whatever we can to avoid the need for a rights issue. As I stand today in front of you, I can tell you that thanks to the contribution from many, from the board of PPC to the business unit managers across PPC, to the boiler makers in our plants. From the executives to the electricians, from the receptionist to the risk managers, and I can fill the whole alphabet if you would like me to.
What I want to say is this was a team effort, and I'm very pleased to stand in front of you to say that team PPC does not need a rights issue and has restructured its balance sheet. I already touched upon the third outcome, which is our climate strategy going forward. Our focus areas will remain very similar to what they have been, protecting our employees and PPC, making the company stronger as we move forward, helping to build society, improving our cash generation, addressing our capital structure through prudent capital allocation. We'll talk about that throughout the presentation as well, and reducing our environmental impact. We, of course, do that in the context of our industry.
Whilst we're pleased to see an emerging evidence that there is a sustained recovery of cement demand in all the markets where we operate, and we will be comparing both to COVID times as well as pre-COVID times throughout this presentation. We are very pleased that the South African government has recognized the necessity of a strong local manufacturing base, and therewith implemented the designation of cement to be used in government projects. At the same time, cement imports continued to surge on the back of some Asian countries dumping their materials below full cost price, benefiting from backhaul routes of the freight that goes from Africa into the Asian continent. I would like to stress one point. For every bag of cement that is not produced locally, a local producer is unable to contribute to the communities in which they operate.
For each bag that is imported, a local producer is unable to pay taxes that helps to drive society. For every bag that is imported, a company in, for example, Vietnam, is able to pay taxes and help their communities. As a global citizen, I shouldn't mind where the development takes place, whether we lift poverty in Vietnam or in South Africa. As a temporary resident of South Africa, it pains me to see that we're not doing the maximum to bring South Africa to the next level that it so much needs. Other backdrops in our industry are electricity supply. We are pleased that we continue to have very good cooperation with Eskom, as well as with the electricity supplier in Zimbabwe. However, we do see instability as a threat to our operations.
We have too much fluctuations in the electricity, not that it is necessarily not being supplied, but there are fluctuations as and when it is being supplied, which cause difficulties for our operations. I will also touch base on the inflation that is hitting us hard in the input cost. While we have increased prices in all the jurisdictions, we were unable to increase prices at the level with which our input costs have gone up. This is something that we will continue to address going forward. Overall, a resilient performance, I may say. On the left-hand slide, you see the main financial numbers, and I will not take the thunder from Brenda, so I leave it to her to unpack these in detail to you. I'll point you to the bottom, EBITDA margin of South Africa and Botswana Cement.
It has significantly increased from less than 14.5% in 2019 and 2020 first six months to a level of 18.7%. That is still not starting with a two. We still have work in front of us to make that happen. On the right-hand side, the significant progress made on the capital- restructure project, but I just want to highlight that post the reporting date of September 30th, we have received slightly more than ZAR 500 million out of the divestment of PPC Lime and Botswana Aggregates, and that money has been used to further reduce our South African debt that stood at ZAR 1.7 billion at the end of September. With that, we have put PPC back on solid footing when it comes to our balance sheet.
When I spoke to you last, we said that in our plans, we were looking at 2019 as a reference year, pre-COVID. Allow me to to share with you in this slide how cement volumes have evolved from 2019 to 2020 to 2021. You see here on the slide on the left, the South African and Botswana cement volumes, six months by six months. You see the erratic behavior last year, impacted by the lockdown, impacted by the strong recovery thereafter. If we, however, compare our current six months that we're reporting on with the six months of our financial year 2020, which is the calendar year 2019, we see a 5% increase, which is in line with our expectations. Njombo will unpack further where that growth is coming from.
If we look on the right-hand side, we see Rwanda and Zimbabwe, especially Zimbabwe with an enormous jump of 31% comparing 2019 to 2021. This is what we are seeing on the ground as well. This does cause us some challenges from time to time as well, and Mokate will unpack that when he talks about the Zimbabwe operations. Rwanda had a very strong first six months last year. On the back of government-induced projects to mitigate the impact of COVID, they rolled out a massive education building, school building program that CIMERWA benefited from. Even without that in these six months, our volumes remain stable and there is a healthy double-digit 10% growth compared to 2019. I touched upon our input cost, and I would like to share with you how our costs are composed.
This is an example of South African Cement, South African and Botswana Cement. A similar comparison can be made for Zimbabwe and Rwanda. The numbers will not change a lot. You see that by far, the largest costs are electricity and distribution, especially in the South African inland area, where we move goods around. On the right part, you see the percentage of changes in the prices of these input costs in the last 12 months. Electricity has gone up 16%. Distribution costs overall 12%, and fuel higher than that. If we calculate the average producer price index for PPC South African Cement, it stands at 9.2%. Our price increases on average are somewhere between 4% and 8%.
Therewith, the only reason that we have been able to increase our margin from 14.4% to 18.7% is on the back of the hard work done. I would like to recognize the people in Team PPC. I'll start with Kevin Odendaal, Head of Group Supply Chain, who plays a major role in improving our logistics and negotiating the right contracts. Also all our operational managers around the group, our business unit managers, Bheki in Inland, Johan in Coastal, Tuelo in Botswana, KB in Zimbabwe, Albert in Zimbabwe, and Iqbal in the DRC. Thanks to Team PPC, we are able to deliver what we have done. I'll hand over to Brenda to unpack the financials. Over to you. Thank you.
Thank you, Roland. Good morning, everybody. Maybe just an opening remark. All the commentary on the numbers relate to continuing operations and exclude PPC Lime, Botswana Aggregates, and PPC Barnet DRC, as that entity is still treated as an asset held for sale. Moving on to revenue. Revenue for the group increased by 20% period-on-period and by 25% compared to the six months ended September 2019. However, as usual, due to hyperinflation, the Zimbabwean results do distort the numbers, as can be seen from the 55% increase in Zimbabwean revenue. Revenue from the South African and Botswana Cement operations increased by 17%, supported by an increase in volumes of between 12% and 15%.
In Rwanda, as Roland mentioned, volumes were flat, and the decrease in revenue of 18% is by and large, due to the strengthening of the rand against the Rwandan franc by some 19%. Cost of sales increased by 24% period-on-period, but is again distorted by Zimbabwe. Excluding Zimbabwe's costs as well as depreciation for the rest of the group, cost of sales increased by 9%, which is slightly below the increase in the group's main volumes of 11%, also excluding Zimbabwe. If one were to convert the costs to a cost per ton of cement, the cost was flat period-on-period, notwithstanding input- cost inflation of 9.2% in South Africa. Stringent cost control remains a key focus and is delivering. Moving on to EBITDA.
Group EBITDA increased by 13% period-on-period and by 28% if one excludes Zimbabwe. The South African and Botswana EBITDA showed very strong growth, increasing by 67%, and in Rwanda, the EBITDA declined due to rand strength and the timing of plant maintenance, which was incurred in the current period versus H2 in the prior year. Adjusting for this maintenance, Rwanda's EBITDA was flat period-on-period in its functional currency. The Zimbabwean EBITDA increased in its functional currency, both pre and post hyperinflation. However, the ZWL depreciated by some 83% against the rand, and this had a negative impact on the disclosed rand EBITDA. As usual, PPC has quite a number of material non-cash items, and this slide shows the period-on-period key non-cash items affecting the earnings.
The current period earnings were positively impacted by ZAR 667 million compared to ZAR 85 million in a comparable period. The significant variances are ZAR 368 million due to fair value and foreign exchange movements. In excess of ZAR 200 million of this variance is due to a reduction in the foreign exchange losses on conversion of U.S.-denominated monetary items. This is due to a significant depreciation of the ZWL against the dollar in the prior period of some 226%, compared to only 44% in the current period. In addition, the actual net monetary liabilities have decreased period-on-period.
There's a ZAR 98 million variance which goes the other way, and that is due to a lower fair value gain on the Zimbabwe financial asset relating to the legacy debt, which decreased from ZAR 9.2 million in the prior period to ZAR 4.2 million in the current period. A + ZAR 114 million variance is due to the increase in the net monetary gain when hyperinflating Zimbabwe's numbers. Lastly, a ZAR 189 million variance, which is the net profit resulting on both the sale of the lime and the Botswana Aggregates businesses. I will deal with the effective tax rate next and then show you the after-tax impact of the non-cash items I just discussed. As can be seen, our effective tax rate reduces by almost 16% due to the non-monetary items I talked about on the previous slide.
The two increases are due to underprovision of tax in prior periods, resulting from the conclusion of a tax audit on PPC Cement by SARS. Lastly, certain entities in the group have tax losses on which deferred tax is not raised, which negatively affects the effective tax rate by 2%. Normalizing the earnings now for non-cash items after tax. The only non-cash item that has a tax impact is the foreign exchange losses in Zimbabwe. As can be seen on an after-tax normalized basis, earnings increased by 19% compared to the prior period. The slide depicts the evolution of CapEx in the group over a number of years. Important to note that since March 2020, the amounts depicted are all only for continuing operations and therefore exclude the DRC, Lime, and Botswana Aggregates.
The focus for CapEx spend is on maintenance and improvement. CapEx of ZAR 279 million being spent in the current period under review. Of this ZAR 279 million, less than 30% was spent in the South African operations, with spend in Zimbabwe making up the majority of the amount. The guidance for the year remains between ZAR 500 million and ZAR 550 million. Right, moving now to the cash flow for the six months. The group generated strong cash flow of ZAR 849 million after working- capital movements. After funding the CapEx I've just talked about, free cash flow amounted to ZAR 502 million. ZAR 330 million was used to further deleverage the balance sheet, which I will deal with on the next slide.
Right, this shows the continuous good progressing on deleveraging the group across the operations. Gross debt has reduced from ZAR 2.6 billion at March 31 2021 to ZAR 2.3 billion at September 30 2021. The proceeds from the sale of PPC Lime and Botswana Aggregates of some ZAR 500 million will further deleverage the balance sheet in the second half. I will briefly deal with the credit metrics on the next slide, and then close with progress of the group restructuring and refinancing project, which includes progress to restructure our South African debt facilities. The two key covenants of interest cover and gross debt to EBITDA are more than 2x and less than 5x, respectively. As can be seen at September 30 2021, the South African Obligor group is well within these covenants, with further improvements post-period as the proceeds from PPC Lime and Botswana Aggregates are received.
Just to close our second last slide on the group capital restructure. Three critical milestones have been achieved during the six months. As you're all aware, we have undertaken to sell PPC Lime, and that has been achieved, as Roland mentioned as well, and the need for an equity raise has gone. We have also proactively engaged with our banks to renegotiate the structure and tenure of facilities, and non-binding term sheets have been signed in this regard for some ZAR 2.1 billion of debt, of which ZAR 1.5 billion is long-term, with tenures of between three and five years. We are currently in the process of preparing binding long-form agreements and expect these to be signed before the close of the calendar year.
The finalization of the DRC long-form agreements is taking longer than expected, but the recapitalization of PPC Lime's balance sheet has commenced and is expected to conclude by December 31 2021. It's important to note again that there's no further recourse to PPC Limited's balance sheet, regardless of the progression of the long-form agreements. To close, the highlights for the six months are improved financial performance, further de-gearing of the balance sheet. However, importantly, we have not lost focus on the imperative to continue to improve the internal financial controls. Good progress has already been made in this regard, but it will continue to be a focus area across the group. Thank you very much. I'll hand you back to Roland.
Thank you, Brenda. The next chapter in our presentation is around the operational results in the various jurisdictions where we operate. Before I hand over to Njombo to talk about South Africa and Botswana, I'll slightly pause at this particular overview, where you see revenue and EBITDA, as well as EBITDA margin for all our different operations. I will not dwell upon the fact that we have major increases compared to last year, as there was obviously lockdown into the last year. If you look overall on the right-hand side, and you compare our EBITDA margin achieved in the financial year 2020 compared to what we're currently having in financial year 2022, you will note the strong increase in South Africa cement. I would also like to highlight to you our materials business.
I'd like to particularly congratulate the Materials Business Unit of South Africa under the leadership of Dave Miles. They have managed to turn the business around under difficult circumstances. As the infrastructure spend of the government is yet to truly kick in, we see that our ready-mix concrete volumes are below 2019. They have, nevertheless, made a tremendous turnaround and are now able to report an EBITDA margin above 6%, and I think that is well done. You will see the significant drop of the Zimbabwe EBITDA margin. You might recall that when we were reporting to you EBITDA margins above 40%, we did notice that we believe those were not sustainable and largely a result of the hyperinflation environment.
While Mokate will unpack the details, we have seen the normalization of EBITDA margin that was further impacted by the fact that Zimbabwe, as I mentioned to you before, required to import clinker from South Africa, mainly. Without further ado, let me hand over to Njombo to talk you through South Africa and Botswana. Njombo, the floor is yours.
Thank you, Roland. Afternoon or morning. As Roland mentioned, behind this performance, there is a highly passionate and dedicated Jabali team behind the results. On that note, I would like to echo his words and thank the people of PPC and the Jabali family in terms of their contribution. Without further ado, I'll just talk about our business and, firstly focus on the industry itself. We're still starting to see a normalization on the retail sector, but the business itself is still carried mainly by the rural and the informal markets. We're starting to normalize towards the 2019 volumes, in terms of the retail.
The industry itself welcomes the classification of designation of the cement, and this is very positive for the industry in terms of, like, giving some kind of confidence on the government support to the sustainability of the industry in South Africa. It also gives us an encouragement that our quest to try and reduce the number of imports coming into the country, it's something that the government will be able to work with us. While we do not see adequate improvement in terms of the government infrastructure rollout, we're starting to see some green shoots coming through. However, the industrial sector has shown some significant growth of about 28%, be it coming from a very low base.
What is encouraging is the fact that there is a lot of private- sector investment that is going into the industrial sector, and I'll talk about that later on. In terms of our focus area, one of the areas that we have been focusing on was the optimization of our assets, improving our footprint in relation to our profitability, and we've made very good progress in that, as indicated on the numbers. From our total value proposition, our product range, we've managed to really bed down the consistent product quality. At the moment, we feel that we're leading in terms of the service in the industry and the ability to utilize our assets in delivering that value.
We also focused on entrenching our route- to- market strategies with a very specific value offering in terms of the products and the customer diversification, which ensures a value proposition to our customers. In terms of the outcomes, despite the cost pressures that we're seeing, the operational efficiencies in our organization or in terms of the business, we have improved. Roland mentioned the optimal sourcing that we have done with the supply chain. It is an area that has gotten a huge impact in our costs. At this stage, we feel that is very well controlled. It has been a focus area in terms of ensuring that we get sustainable margins, so we optimize the sourcing and the distribution with a very special focus on implementing technology to drive our supply- chain business.
One of the other positives is our ability to be agile so that we could secure opportunistic saves. That agility was built into our Three Mega Plant strategy, which is starting to pay off in the sense that when the demand picked up, we were able to bring in new capacity to meet that demand. When we look at our volumes, we've spoken about the 12%-15% increase in terms of the period. Earlier, Roland highlighted the 5% increase in our volumes going back to the 2019 comparative. That has resulted in a very good improvement in terms of the revenue at 17%. What is most important is, despite the cost pressures, we were still able to show an improvement on our margin as has been stated before.
There is so much talk around the local designation. As an industry, we welcome that from just the fact that it is an indication of the seriousness and the commitment of the government to protect local manufacturing. Obviously, PPC is a beneficiary, but what is most important is the industry as a beneficiary in the whole, designation and the country as a whole. If we look at the value chain, the amount of jobs that we can grow and retain in South Africa because of the local capacity being utilized. Just as an example, if you work out the imports that have come into the country. That's equivalent to about ZAR 900 million that has gone out to pay for those imports coming into the country. It is a significant improvement.
As a business itself, it is beneficial to ourselves, to our stakeholders, in a sense that we can be able to do all those community aspirations that we have. Most of all, we've currently been busy with the Construction Master Plan, which will help to define what South Africa is going to be doing in the space of construction and creation of those jobs for its recovery. One of those designation impacts is the fact that it starts defining the pipeline in terms of the infrastructure and us being able to take advantage of it. Next slide. Just to give a flavor of what the imports have done to our business, they continue to bother us. If we look at the total imports, a combination of cement and clinker, that has increased by about 30%.
Just to give you context, the volume that we indicate and estimate that we're gonna end at the end of the year is basically an equivalent of one unit in our operation in the Western Cape, which we could actually get up and running and be able to supply jobs in our local economy. Lastly, I would like to talk about the materials. Roland has given all the accolades to the team, and it is a very well-deserved accolade in a sense that the improvement with regards to the volumes is not that significant as our materials is very dependent on the infrastructure rollout. However, if we look at the industry itself, it has benefited from the increased distribution centers that are being built, especially in the Gauteng area, which has improved the volume.
The fly ash has shown a bit of a decrease relative to last year. Obviously, that is related to the retail sector having slowed down. Also last year, we went through a period where the extenders were in a shortage, which gave an opportunity for fly ash to increase in terms of the supply. However, the fly ash volumes are higher than the previous six months ended September 2019. In terms of the forecast, the material teams have been able to reduce their operating costs, and this is also with a very special focus on higher margin markets. Also did very well in terms of the route- to- market strategy, focusing on the expansion into the informal sector, in line with our diversified strategy of market approach.
While we paid special attention on the margin and value creation in the business, we also took advantage of group synergies in terms of delivering value, ensuring that the customers are receiving our product on time, but also taking advantage of the fact that we can at least be able to give a packaged offering to the customers. In terms of the outcomes, we've seen the restructure in the materials business, which entails relocations of plants, focusing on the most profitable plants and also the capacity utilization of plants. We're seeing the results coming through. The aggregates business, we actually focused on the micro- RMPs and going direct to those micro- RMPs, and we're quite pleased with the results in terms of improved margin and also increased volumes coming from there.
The one focus area in terms of the entrenching of the basket offering has actually created adequate value and competitive advantage in many instances on the materials business. As Roland mentioned earlier, in terms of the margins that we are managing to get from the materials business, this has come with very little in terms of the volume increase. If we compare year-on-year, 27% obviously coming from a COVID year, it's actually a very good increase. The fly ash volumes decreased. This is coming from a very high base that was related to the previous year. All in all, it's an improvement from the materials business coming from a loss position and showing an EBITDA of ZAR 37 million at a very good EBITDA margin. Thank you.
I'll hand over to Mokate.
Thank you, Njombo. I think my colleagues, both Roland and Brenda, they've given you a glimpse of our operating conditions in Zimbabwe. I think what we've seen in Zimbabwe, the operating conditions has been challenging. We've seen frequent monetary and policy changes that has really created uncertainty in the market. The good thing is what we've seen, the market, domestic market in Zimbabwe grew by roughly 18%-22%, and PPC volumes during the same period grew by the same percentage, and we've been able to maintain our market share in Zimbabwe above 57%. However, the overall industry performance has really allowed for imports to continue entering the Zimbabwean market. We've seen imports growing compared to the last first half by more than 100%, due to the performance of the overall industry.
The good thing is we've been able to secure more than 50% of our volumes in foreign currency. As I've mentioned previously, with the introduction of multicurrency and free funds in Zimbabwe, it allows us to trade in both the rand, the pula, and the U.S. dollar. We've seen us gaining volumes of almost 50% in foreign currency. What we've done. Oh, sorry, I haven't turned the slides. I thought, Njombo. My apologies. I didn't realize that you are still on the wrong slide. My apologies for that. What we've done in Zimbabwe, we've also secured fly ash. You've seen Roland, when he started, he spoke about decarbonization. It is a priority for us in Zimbabwe. We've secured future fly ash that will come up in the second half of the next calendar year.
This will really assist us in driving decarbonization in Zimbabwe and obviously also reduce our costs. In terms of industrial performance, you've seen last year I mentioned that volumes grew quite substantially post-lockdown. The reason for that growth or the impact of that growth was that we had to shift our maintenance shutdown on the Colleen Bawn Kiln. As you may all know, a kiln shutdown is quite an annual event and is quite critical to ensure reliability of your plant. The deferment of this kiln shutdown could not continue, so in the beginning of this first half, we made a deliberate decision to execute a shutdown. To support the growing demand in the market, we exported 60,000 tons of clinker, of which 48,000 tons, thanks to my colleague, Njombo from South Africa, enabled us to execute the maintenance shutdown successfully.
We've done also quite a lot around people as we realize that cement skills overall is becoming a very scarce resource. We've brought in highly competent Zimbabwean diasporas to come and support the team in Zimbabwe, and we're starting to see the results in terms of industrial performance. I would like to really thank the Zimbabwean team because they operate under very difficult conditions, but the performance and what we're seeing in the market is testament of all their efforts. As Brenda alluded earlier, our margins in Zimbabwe are really distorted by, you know, hyperinflationary accounting and also depreciation of the ZWL against the rand has had an impact on our EBITDA. Moving next to Rwanda.
Roland mentioned earlier in Rwanda, the first half of last year, we had upsurge in volumes in quarter two of the first half, mainly driven by the volumes that went into government infrastructure projects to mitigate against COVID. Those volumes, those projects, that project actually ended in quarter three of the last financial year. If you compare this half and last year's half, quarter two was quite abnormal in terms of the volumes. What we've overall seen in terms of the industry, the industry volumes demand shrank by 4%-6%, and we've seen a similar trend in terms of our domestic volumes. What you'll see is our overall volumes showing they are relatively flat.
The reason for that, when we saw the decline in the domestic market, we aggressively went into the exports, and we've seen growth above 30% in the export market, particularly in the eastern part of the DRC. Rwandan economy, like many other economies, faced difficulties with COVID, and we're seeing a rebound of the GDP from -3% to above 6% going forward. We've seen some green shoots with new projects that are coming up. We've recently secured the Bugesera Airport, where we expect the volumes to come on stream in the second half of this financial year. Secondly, in Rwanda, what we've also done, we've really started phase one of our debottlenecking or phase two of our debottlenecking.
We've done quite a lot of work in the first half compared to last year, where we actually ran our plant full steam in the first half. We did a shutdown in the first half.
Where you see when you compare the performance of last year and this year, striking difference in terms of our EBITDA, mainly coming from the release of OpEx in the first half to address our maintenance shutdown. Secondly, lastly, we actually had a fatality last year in Rwanda, and this was for us an eyesore. We took this very seriously. We started this very aggressive safety initiative program in Rwanda. To date, Rwanda has actually performed quite well. We had an unfortunate LTI, which was really minor, slippery. Overall, we're seeing a much better safety performance across all our markets purely because of the focus that we have put in place. Thank you.
Thank you very much, Mokate. Thank you, Njombo. Ladies and gentlemen, with that, we are coming to the end of our presentation. Allow me to summarize in four bullet points. I hope you will concur with us that Team PPC has delivered a solid performance operationally as well as financially, reflecting the efforts that we have done over the last years to reposition our business, to resize our business to the environment in which we operate. We will therefore continue to play a meaningful role in building societies and delivering on our purpose: to empower people to experience a better quality of life. I smiled at the second bullet point. Focus will be on completing the capital restructure because I am blessed to be in a position where I might enter early, but I also exit a little bit early.
For me, the financial restructure is done. I know, and I appreciate that colleagues such as Chrissie Moloseni, our CFO International, Kevin Ross, our Head of Legal, and to a certain extent, Brenda and Igor Omar, are still very busy with the administrative ending of this project. I think we are looking now forward. We're looking forward to growing our business on stable footing. That growth will partially come out of the reduction of our carbon intensity, our search for new revenue streams that are related to our business, but not necessarily in the core of our cement business. That is where our materials business in South Africa is gonna play an important role. Concrete is known that it can absorb CO2 during its life cycle, and we will continue to need concrete as we go as a country through the transition into a greener economy.
We have to bear in mind that that transition has economic and socio-economic consequences. Within the continent of Africa, we cannot be held accountable for solving a problem that wasn't created here. Lastly, the inflationary pressures are there to stay with us for the near time, and we will therefore have to regularly adjust our prices and do our homework on the cost side in order to further expand the margins and earn the return on the capital that has been provided to us by shareholders and banks. With that, I'd like to close, and we'll pause for a short moment, and then we'll take questions. Thank you very much.
Thank you, Roland. If we can cross to the teleconference just to see if there are any questions on the conference line.
At the moment, we have no questions on the teleconference.
Thank you. We'll move over to the webcast questions. The first question comes from Stefan Clintworth of DNI. Government has recently banned the use of imported cement for government projects. Is the company expecting this decision to have a material impact on revenue going forward?
Thank you very much for that question. I'll hand it to Njombo, who is closest to the impact of that. Njombo, over to you.
Yeah. Actually, we do expect it to have an impact. However, this is all dependent on the delivery of the infrastructure project. The country announced ZAR 595 billion that is set aside for infrastructure projects. If you estimate about 7%-8% usage of cement in that and our basic share of about 25%-30% in that particular space on the industrial side, then you're thinking about, say, a contribution of 15% or so on our revenue line. However, on a recent study, we probably have spent, as a country, about ZAR 19 billion of the ZAR 595 billion. It is mostly the impact is dependent on that rollout of the infrastructure.
Thank you, Njombo. The next question comes from David Fraser of Peregrine Capital. The net finance cost in SA of ZAR 12 million appears low. Can you unpack the ZAR 159 million finance income into its components?
Brenda, can you?
Of course I can, Roland. I wish our net finance costs were as well. David, I think one mustn't net those two numbers that you see in the segmentals. Then you get that very distorted picture. The actual finance costs have come down from last year, and one would expect them to because our facilities, the utilization is probably less than half. The confusion I think comes in in the investment income of ZAR 159 million. That is simply an intra-group income. If you look across the page, you'll see it clicks out in group services and other. That distorts the South African Cement operations, if that helps you.
Thank you, Brenda. The next question comes from Shoaib Vayej of Afena Capital. Does CapEx guidance incorporate the climate CapEx of ZAR 664 million over five years? Or will this be additional to typical stay-in-business CapEx levels? The second question, why was clinker only recently added to the ITAC application?
Okay. Thank you, Shoaib. Allow me to take the first question. The ZAR 664 million CapEx over the cycle until FY 2025 largely stays within our normal CapEx envelope. Those are projects that we would have done anyhow. There is approximately 40% of that related to one particular project that is currently under feasibility, that will allow us to significantly reduce clinker factor and postpone future investments. Positive in the NPV. We are currently going through the process of finalizing technical feasibility, and I'll invite you to our session on Monday where we will unpack some of these technical projects in more detail. The question why clinker was only recently added to the ITAC application is a very good one, so I'll ask Njombo to answer that.
I think it goes without saying that when you're considering tariffs, basically you're considering what is the cost of production in country. The biggest risk that comes with that is once you put on tariffs on cement, basically the input material, which is clinker, also starts being a viable solution for importers. We've seen it in East Africa, and there is also a potential risk in South Africa in terms of the grinding stations. When we put the application with the ITAC, one of the questions was, how is this going to impact the in-process material and the beneficiation in country? That's what led to us extending that into the clinker.
Thank you both. Just in keeping with imports, Mark Neramore from Excelsior Capital has asked, where do you expect total imports to be for 2021 from a volume perspective?
In terms of the imports, we expect that they will be in excess of 1.4 million tons, and that is about 10% or in excess of 10% of the local demand with regards to cement.
Thank you. We have another question related to imports. That is from Stephen Hurwitz of 36ONE Asset Management. Despite government only using local cement going forward, imports will still arrive from overseas. Does this mean imports will just displace market share in the retail market?
Yes, imports does have an impact on the retail market. However, we expect that South Africans also understand the impact of imports in terms of buying local and using local products. Yes, it will have an impact on the retail market space.
Thank you, Njombo. The next question comes from Rohan Gula of Cronax Research. Are you taking a leadership role in pricing? Will you hold prices even if competitors discount? Can you get real price increases over the next year? We have a similar line of questioning from Zaid Paruk of Aeon Investment Management. How do you see pricing changing over the next period? Do you think customers are able to take additional increases, and will this affect volumes?
Thank you, Zayd. Thank you, Rohan. I would claim that we take leadership roles not just in pricing. We take leadership roles in all we do, and we have been doing so and will continue to do so. The price increase that we see necessary for January is in the range of 5%. In my opinion, it should actually be a little bit higher to compensate the inflationary input costs. We are in a competitive landscape, number one, so we will not simply hold prices if everybody else discounts. We have a certain market share. We're happy with our current market share. We don't wanna see it coming down. We will hold prices, similar to what Njombo has done already two years ago. I think it's necessary that as a leader in the industry, we play that role.
We also expect that we see following from other players in the market because we know that nobody is, at the moment, earning their cost of capital. At the same time, we're of course, also sensitive to the fact that given the designation of cement to be used in government projects, we will be watched carefully for so-called predatory pricing, which is something that we're not planning to do. We're looking at passing on cost increases that we have in our input materials. Whether we think that customers are able to take additional increases, whether this will affect volumes, it could affect volumes and therefore we have not yet increased our prices with the amount that our input costs have increased, as we've done good on cost management as well.
Balancing everything, as I said to you before, for South Africa and Botswana Cement, their challenge is to deliver an EBITDA margin that starts with a two, and that will need price increases.
Thank you, Roland. The next question from Mark Neramore of Excelsior Capital. Would you expect similar EBITDA margins in the second half for SA Cement?
Well, it wouldn't get us to the two, Mark, but let me ask Njombo.
We just dealt with the question around the selling- price increases. Obviously, that has got a huge impact in terms of the margins, and yes, we are expecting to stay within that. As we indicated earlier, our average increase or inflationary increase on inputs is much higher than what we can expect to get from the market. Therefore, that will put a lot of strain on the margins. However, an increase in capacity utilization in our operations has got a positive impact in terms of the cost. Which is why things like designation gives us a chance to be able to be competitive without actually just depending on the price to improve the profitability.
Thank you, Njombo. The next question comes from Clifford Mateve, the private investor. Is the proposed separate listing of PPC SA in Botswana and PPC and the rest of Africa going ahead?
Thank you, Clifford. To my knowledge, we've never spoken about separate listing of the two entities. What we have spoken about as a first step is to separate the balance sheet of South Africa from the balance sheets of the individual countries in PPC International. That has now effectively been done. We've also said that we understand that the PPC International business is in a high growth area that will require further capital to participate in the growth, and that we might be looking for an external investor in that particular business. Now that we're coming out of the recent restructure work, we'll seriously apply our mind as to how and when we will grow our international business without tapping into funds that are being generated from our South African business.
Thank you, Roland. The next question comes from Charles Boles of Titanium Capital. The industry is not at its cost of capital. The outlook for GDP growth is muted, so about 1.5%. Can the industry achieve an acceptable cost of capital without industry consolidation?
Thank you, Charles. I think it can. That's part of the answer. The other part of the answer is that I don't think consolidation is the holy answer to this question. For us, it is all about making sure that we have our cost base properly under control, that we leverage from the increasing volumes. Whether they come slowly or fast, they will come over time, and we're sitting on at least 30% volume that can still be released in the market without significantly increasing our cost. This is a cyclical business, so I do think that the industry can achieve at least PPC. Let's speak for PPC, can achieve an acceptable cost of capital recovery without consolidation.
Thank you, Roland. The next question comes from Chris Reddy of All Weather Capital. He's actually got two questions. I'll start with the second one because it's also similar to a question from Clifford Mateve, the private investor. At what stage would you look to reinstate the dividend? And the similar one from Clifford, when are you focusing to pay your first dividend based on current projected cash flows?
Brenda.
I wouldn't like to give a precise date. It is something very much on our minds. As you know, right now, we're still precluded from declaring dividends. That will change when the long-form agreements that I referred to with the banks are entered into. I think it's something that we'd like to discuss possibly with our board before formally communicating to the market. We definitely have an aspiration to restart dividends.
Thank you, Brenda. The next question comes from Chris Reddy of All Weather Capital again. Please, can you give us an indication of the new interest rates that you're looking to sign with the facilities being refinanced? It's the ZAR 2.1 billion. He's looking for guidance on further interest savings going forward.
Brenda, it's for you.
Sure, Chris. I can give you a bit of guidance. I think two things. The absolute use of the facility is going to be significantly lower. Although we have ZAR 2.1 billion of the sub-facilities, as you would have noticed from the slides, at September, we were only ZAR 1.7 billion drawn, less the ZAR 500 million is ZAR 1.2 billion. Much lower utilization than in the past. On the interest rate itself, on a weighted average basis across all facilities, and we'll obviously try and use them optimally, but even if you just look at it in that way, probably between 115 and 120 basis points cheaper.
Thank you, Brenda. If we can just check again on the conference line, are there any questions?
There are no questions on the telephone line.
Thank you. Just a reminder to those on the webcast that you can type your questions in the box on the page. It appears that there are no further questions.
Thank you very much. Thank you for your questions. Thank you for your interest in PPC. We would like therewith to close the session. One more question.
One more question has just come through from Zaid Paruk of Aeon Investment Management. Could you provide some insights on what you're seeing from the government infrastructure program? Are projects gaining traction?
Njombo, you wanna take it?
Yeah. The SANRAL, which is busy with the roads, there is some advancement in there, and we've seen some projects coming through. Currently, there is a lot of tender activity that is going on. We're looking and saying, with the recent elections, will there be any projects coming from the local municipality? Yes, with the water projects that the repairs have started, we're expecting some of those tender activities to result in projects kicking off.
All right. Thank you everyone for joining us. This is the end of our presentation. For any of you who have additional questions, kindly direct them to myself or Louise. Our emails are available on PPC's website at the Investor Relations section, and we'll promptly address it for you. I think that's it. Thank you very much and enjoy the rest of your day.