16th Sep 2020 12:17
(Alliance News) - Steppe Cement Ltd on Wednesday posted a rise in profit for the first half of 2020 as it forecast an improvement in the Kazakhstan cement market for the year as a whole.
Shares in the construction materials firm were trading 0.9% higher at 24.21 pence each midday Wednesday in London.
For the six months ended June 30, Steppe Cement posted pretax profit of USD4.8 million, up 14% year-on-year from USD4.2 million. This was despite an 9% fall in revenue to USD33.8 million from USD37.1 million, as sales volume fell 2% to 760,000 tonnes
Earnings per share was 1.9 cents, up 36% from 1.4 cents the year prior.
The London-listed, Malaysian-incorporated, Kazakhstan-focused company said it maintained prices from last summer until the Covid-19 crisis affected the second quarter, which led to the average ex-factory price decreasing by 3% to KZT14,727 - around USD34 - per tonne.
Gross margin increased to 40% from 37% in dollar terms due to cost-containment measures.
Selling expenses decreased by 20% per tonne in dollar terms due to distribution in areas closer to the factory, as well as the implementation of the IFRS 16 accounting rule relating to leases, as some of the rental fees for wagons had been transferred to financial leases, reducing the transport costs.
Administrative expenses were unchanged at USD2.6 million.
"The Kazakh cement market increased by 2% during the first half of the year. The increase happened mostly in the first quarter, while the second quarter was slightly below 2019. Steppe Cement currently expects a market of about 9.1 million tonnes for the full year 2020, an increase of 2% over 2019," Steppe Cement said.
Cash held as at June end was USD9.6 million.
By Ife Taiwo; [email protected]
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