20th Sep 2024 07:00
20 September 2024
Steppe Cement Ltd
("Steppe Cement" or the "Company")
Unaudited Interim Results for the Half Year Ended 30 June 2024 and General Market Update
Steppe Cement Ltd (AIM: STCM), is pleased to announce its unaudited interim results for the half year ended 30 June 2024, and a general market update.
A copy of this announcement and the full interim financial statements are available on the Company's website at www.steppecement.com
Unaudited Interim Results
During the six-month period to 30 June 2024 ("H1 2024" or the "Period"), the Group reported revenue of USD34.4 million, a 7% decrease from USD36.9 million in the corresponding period in 2023. This decline was mainly attributable to the 4% reduction in sales volume. Although the first quarter experienced a significant drop in volume of sales of 18%, this was offset by a 2% increase in the second quarter of the year, following price adjustments to align with market conditions. Volume of sales has continued to recover in the third quarter of 2024, and the price of cement has increased.
| 6 months ended 30 June 2024 | 6 months ended 30 June 2023 | % change |
Sales (Tonnes) | 719,294 | 749,034 | -4% |
Consolidated Turnover (KZT million) | 15,435 | 16,702 | -8% |
Consolidated Turnover (USD million) | 34.4 | 36.9 | -7% |
Consolidated (loss)/profit after tax (USD million) | (3.5) | 0.1 | -3,600% |
(Loss)/earnings per share (Cents) | (1.6) | 0.1 | -1,700% |
Average exchange rate (USD/KZT) | 449 | 454 | -1% |
The average sales price of cement for the Company was USD48 per tonne (KZT21,458 per tonne) compared with USD50 per tonne (KZT22,665 per tonne) in the corresponding period in 2023.
The gross margin decreased to 15% in the six-month period to 30 June 2024 compared with 26% in the same period last year due mostly to the 6% higher cost in electricity and maintenance in the period to 30 June 2024. Selling expenses and administration expenses remained constant, across the two periods, at USD6.1 million and USD3.4 million, respectively.
General inflation in Kazakhstan has eased to 8.4% during the Period.
The Group reported a net loss for the Period of USD3.5 million compared with USD0.1 million profit after tax in the same period in 2023.
Production and capex
· Cash production costs increased by 6% in KZT in the first half of 2024 as compared to the same period in 2023, primarily due to the higher electricity, diesel and consumable costs, as the Company changed all refractories in Line 5 for the first time since its start up. It is expected that production costs (which exclude depreciation costs) for the year will increase in line with inflation.
· Production volume of clinker increased by 7% in the first half of 2024 and is continuing to increase in the third quarter of 2024.
· The Company started the production and sale of a mineral powder, based on limestone. The product is an additive for other industries and allows the Company to use its spare mill capacity.
· A separator for cement mill number 2 was commissioned.
· Line 5 had an increased capex expenditure in the first half of 2024 as the kiln was completely revamped.
· Line 6 has now stabilised and is capable of producing approximately 2800-3000 tonnes of clinker per day.
Update on the Kazakh cement market
· During the first half of 2024, the Kazakh cement market reduced in size by 1.6% compared to the same period in 2023.
· The Company expects to maintain or increase its market share at around 14% for the full financial year ended 31 December 2024.
· Exports of cement from Kazakhstan in the first half of 2024 were reduced to 0.46 million tonnes compared to 0.55 million tonnes in 2023.
· Imports of cement in the Period represented 3.7% of the local market, 0.5% less than in 2023.
Finance
· Total finance costs for the Period were USD0.6 million, including interest expenses on bank debt of USD0.4 million, mostly from subsidised loans. The Company maintained interest expenses on lease liabilities at USD0.2 million following the application of IFRS 16 for the 2-year wagon leases which were previously classified as selling expenses.
· There is USD0.9 million in advanced income tax payments that is expected to be offset against future tax liabilities.
· As at 30 June 2024, the Company's borrowings totalled USD5.4 million, with a cash balance of USD2.0 million therefore net debt of USD3.4 million. For comparison, as at 30 June 2023 the Company had borrowings of USD6.7 million and a cash balance of USD6.0 million therefore net debt USD0.7 million. The cash was used to fund a reduction and repayment of capital of USD$4.16m, as announced on 5 April 2024, and to build a higher clinker and cement inventory, valued at USD5 million as of 30 June 2024.
For further information, please contact:
Steppe Cement Ltd | www.steppecement.com |
Javier del Ser Pérez, Chief Executive Officer | Tel: +(603) 2166 0361 |
Strand Hanson Ltd (Nominated & Financial Adviser and Broker) | www.strandhanson.co.uk |
James Spinney / Ritchie Balmer / Robert Collins | Tel: +44 20 7409 3494 |
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS
FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
| The Group |
| The Company | ||||||
| 6 months ended |
| 6 months ended | ||||||
| 30 June 2024 |
| 30 June 2023 |
| 30 June 2024 |
| 30 June 2023 | ||
Note | USD'000 |
| USD'000 |
| USD'000 |
| USD'000 | ||
Revenue | 7 | 34,376 | 36,882 | 738 | 683 | ||||
Cost of sales | (29,158) | (27,405) | - | - | |||||
Gross profit | 5,218 | 9,477 | 738 | 683 | |||||
Selling expenses | (6,138) | (6,154) | - | - | |||||
General and administrative | |||||||||
expenses | (3,417) | (3,421) | (199) | (176) | |||||
Operating (loss)/profit
Interest income | (4,337)
119 | (98)
93 | 539
88 | 507
- | |||||
Finance costs | 8 | (614) | (483) | - | - | ||||
Net foreign exchange (loss)/gain |
(251) |
(14) |
(4) |
18 | |||||
Other income, net | 641 | 563 | - | - | |||||
(Loss)/Profit before income tax | (4,442) | 61 | 623 | 525 | |||||
Income tax credit/(expense) | 9 | 938 | (9) | - | - | ||||
(Loss)/Profit for the period | (3,504) | 52 | 623 | 525 | |||||
Attributable to shareholders | |||||||||
of the Company | (3,504) | 52 | 623 | 525 | |||||
(Loss)/Earning per share: | |||||||||
Basic and diluted (cents) | 10 | (1.6) | 0.1 | ||||||
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
The Group |
| The Company | |||||||||
6 months ended |
| 6 months ended | |||||||||
30 June 2024 |
| 30 June 2023 |
| 30 June2024 |
| 30 June 2023 | |||||
USD'000 |
| USD'000 |
| USD'000 |
| USD'000 | |||||
| |||||||||||
(Loss)/Profit for the period | (3,504) | 52 | 623 | 525 |
| ||||||
| |||||||||||
Other comprehensive income/ (loss): |
| ||||||||||
Item that may not be reclassified subsequently to profit or loss |
| ||||||||||
Exchange differences arising on translation of foreign operations |
(3,140) |
48 |
- |
- |
| ||||||
| |||||||||||
Total comprehensive (loss)/ income for the period |
(6,644) |
100 |
623 |
525 |
| ||||||
| |||||||||||
Attributable to shareholders |
| ||||||||||
of the Company |
(6,644) |
100 |
623 |
525 |
| ||||||
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024 (UNAUDITED)
|
|
|
| The Group |
| The Company | |||||
|
|
|
| Unaudited |
| Audited |
| Unaudited |
| Audited | |
|
|
|
| 30 June 2024 |
| 31 Dec 2023 |
| 30 June 2024 |
| 31 Dec 2023 | |
|
|
| Note | USD'000 |
| USD'000 |
| USD'000 |
| USD'000 | |
Assets | |||||||||||
Non-Current Assets | |||||||||||
Property, plant and equipment |
|
46,475 |
50,543 |
- |
- | ||||||
Right-of-use assets | 2,551 | - | - | - | |||||||
Investment in subsidiary companies |
- |
- |
36,200 |
36,200 | |||||||
Loan to subsidiary company |
- |
- |
30,010 |
30,020 | |||||||
Other assets | 213 | 223 | - | - | |||||||
Total Non-Current Assets |
49,239 |
50,766 |
66,210 |
66,220 | |||||||
Current Assets | |||||||||||
Inventories | 22,791 | 28,957 | - | - | |||||||
Trade and other receivables |
|
1,609 |
1,737 |
894 |
- | ||||||
Other assets | 2,363 | 2,853 | - | - | |||||||
Income tax receivable | 2,945 | 2,168 | - | - | |||||||
Loans and advances to subsidiary companies |
- |
- |
66 |
66 | |||||||
Advances and prepaid expenses |
5,485 |
2,903 |
24 |
10 | |||||||
Cash and cash equivalents |
|
2,043 |
6,435 |
125 |
4,624 | ||||||
Total Current Assets | 37,236 | 45,053 | 1,109 | 4,700 | |||||||
Total Assets | 86,475 | 95,819 | 67,319 | 70,920 | |||||||
(Cont'd)
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024 (UNAUDITED)
The Group |
| The Company |
| ||||||||
Unaudited |
| Audited |
| Unaudited |
| Audited |
| ||||
30 June 2024 |
| 31 Dec 2023 |
| 30 June 2024 |
| 31 Dec 2023 |
| ||||
Note | USD'000 |
| USD'000 |
| USD'000 |
| USD'000 |
| |||
Equity and Liabilities |
| ||||||||||
| |||||||||||
Capital and Reserves |
| ||||||||||
Share capital | 69,600 | 73,761 | 69,600 | 73,761 | |||||||
Revaluation reserve | 1,406 | 1,516 | - | - | |||||||
Translation reserve | (128,318) | (125,178) | - | - | |||||||
Retained earnings / (Accumulated losses) |
117,202 |
120,596 |
(2,525) |
(3,148) | |||||||
Total Equity |
59,890 |
70,695 |
67,075 |
70,613 | |||||||
Non-Current Liabilities | |||||||||||
Borrowings | 1,714 | 2,846 | - | - | |||||||
Deferred taxes | 2,246 | 3,168 | - | - | |||||||
Deferred income Lease Payable | 2,381 2,735 | 2,351 - | - - | - - | |||||||
Provision for site restoration |
193 |
193 |
- |
- | |||||||
Total Non-Current Liabilities |
9,269 |
8,558 |
- |
- | |||||||
Current liabilities | |||||||||||
Trade and other payables |
8,253 |
9,873 |
- |
- | |||||||
Accrued and other liabilities |
5,340 |
2,425 |
154 |
163 | |||||||
Amount due to a subsidiary company |
- |
- |
90 |
144 | |||||||
Borrowings | 3,687 | 3,638 | - | - | |||||||
Lease liabilities | 97 | - | - | - | |||||||
Deferred income | - | 195 | - | - | |||||||
Taxes payable | (61) | 435 | - | - | |||||||
Total Current Liabilities |
17,316 |
16,566 |
244 |
307 | |||||||
Total Liabilities | 26,585 | 25,124 | 244 | 307 | |||||||
| |||||||||||
Total Equity and Liabilities |
86,475 |
95,819 |
67,319 |
70,920 | |||||||
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
|
|
| Non-distributable |
|
| Distributable |
|
| ||||
The Group | Share capital |
| Revaluation reserve |
| Translation reserve |
|
| Retained earnings |
| Total | ||
| USD'000 |
| USD'000 |
| USD'000 |
|
| USD'000 |
| USD'000 | ||
As at 1 January 2024 | 73,761 | 1,516 | (125,178) | 120,596 | 70,695 |
| ||||||
Loss for the period Other comprehensive (loss) | - - | - - | - (3,140) | (3,504) - | (3,504) (3,140) |
| ||||||
Total comprehensive (loss) for the period Capital Reduction |
- (4,161) |
- - |
(3,140) |
(3,504) - |
(6,644) (4,161) |
| ||||||
Transfer of revaluation reserve relating to property, plant and equipment through use |
- |
(110) |
- |
110 |
- |
| ||||||
| ||||||||||||
As at 30 June 2024 | 69,600 | 1,406 | (128,318) | 117,202 | 59,890 |
| ||||||
(Cont'd)
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
|
|
| Non-distributable |
|
| Distributable |
|
| ||||
The Group | Share capital |
| Revaluation reserve |
| Translation reserve |
|
| Retained earnings |
| Total | ||
| USD'000 |
| USD'000 |
| USD'000 |
|
| USD'000 |
| USD'000 | ||
As at 1 January 2023 | 73,761 | 1,795 | (126,267) | 115,791 | 65,080 |
| ||||||
Profit for the period | - | - | - | 52 | 52 |
| ||||||
Other comprehensive income | - | - | 48 | - | 48 |
| ||||||
Total comprehensive income for the period |
- |
- |
48 |
52 |
100 |
| ||||||
Transfer of revaluation reserve relating to property, plant and equipment through use |
- |
(46) |
- |
46 |
- |
| ||||||
| ||||||||||||
As at 30 June 2023 | 73,761 | 1,749 | (126219) | 115,889 | 65,180 |
| ||||||
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
|
|
|
|
|
| |||
The Company | Share capital |
| Accumulated losses
|
| Total | |||
| USD'000 |
| USD'000 |
| USD'000 | |||
As at 1 January 2024 | 73,761 | (3,148) | 70,613 |
| ||||
Total comprehensive income for the period Capital Reduction | - (4,161) | 623 - | 623 (4,161) |
| ||||
| ||||||||
As at 30 June 2024 | 69,600 | (2,525) | 67,075 |
| ||||
As at 1 January 2023 | 73,761 | (4,220) | 69,541 | |||
Total comprehensive income for the period | - | 525 | 525 | |||
As at 30 June 2023 | 73,761 | (3,695) | 70,066 |
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2024 (UNAUDITED)
The Group |
| The Company |
| ||||||||||
6 months ended |
| 6 months ended |
| ||||||||||
30 June 2024 |
| 30 June 2023 |
| 30 June 2024 |
| 30 June 2023 |
| ||||||
USD'000 |
| USD'000 |
| USD'000 |
| USD'000 |
| ||||||
| |||||||||||||
OPERATING ACTIVITIES |
| ||||||||||||
(Loss)/Profit before income tax | (4,442) | 61 | 623 | 525 | |||||||||
Adjustments for:
| |||||||||||||
Depreciation of property, plant and equipment |
2,898 |
2,837 |
- |
- | |||||||||
Depreciation of right-of-use Assets
|
3
|
3
|
-
|
-
| |||||||||
Other non-cash items | (2,413) | 578 | (1,094) | (1,088) | |||||||||
Operating Profit/(Loss) Before Working Capital Changes | (3,954) | 3,479 | (471) | (563) | |||||||||
| |||||||||||||
(Increase)/Decrease in: |
| ||||||||||||
Inventories | 5,096 | 345 | - | - |
| ||||||||
Trade and other receivables, advances and prepaid expenses |
(1,725) |
(22) |
(9) |
(9) |
| ||||||||
Loans and advances from subsidiary companies |
- |
- |
(67) |
(20) |
| ||||||||
| |||||||||||||
Increase in: |
| ||||||||||||
Trade and other payables, accrued and other liabilities |
1,879 |
3,622 |
(4,152) |
4 |
| ||||||||
| |||||||||||||
Cash Generated From/(Used In) Operations | 1,296 | 7,424 | (4,699) | (588) |
| ||||||||
Income tax paid | (926) | (1,777) | - | - |
| ||||||||
Interest paid | (224) | (483) | - | - |
| ||||||||
| |||||||||||||
Net Cash Generated From/(Used In) Operating Activities |
146 |
5,164 |
(4,699) |
(588) |
| ||||||||
| |||||||||||||
(Cont'd) |
| ||||||||||||
The Group |
| The Company | ||||||||
6 months ended |
| 6 months ended | ||||||||
30 June 2024 |
| 30 June 2023 |
| 30 June 2024 |
| 30 June 2023 | ||||
USD'000 |
| USD'000 |
| USD'000 |
| USD'000 | ||||
INVESTING ACTIVITIES | ||||||||||
Purchase of property, plant and equipment |
(2,171) |
(2,721) |
- |
- | ||||||
Purchase of other assets | 7 | (24) | - | - | ||||||
Interest received | 119 | 93 | 200 | - | ||||||
Net Cash (Used In)/Generated From Investing Activities |
(2,045) |
(2,652) |
200 |
- | ||||||
FINANCING ACTIVITIES | ||||||||||
Proceeds from borrowings | 9,629 | 1,703 | - | - | ||||||
Repayment from borrowings | (10,752) | (1,980) | - | - | ||||||
Payment of lease liabilities | - | (363) | - | - | ||||||
Net Cash Used In Financing Activities | (1,123) | (640) |
- |
- | ||||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
(3,022) |
1,872 |
(4,499) |
(588) | ||||||
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES |
(1,370) |
(14) |
- |
- | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD |
6,435 |
4,144 |
4,624 |
1,240 | ||||||
| ||||||||||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD (NOTE 15) |
2,043 |
6,002 |
125 |
652 | ||||||
Related Shares:
Steppe Cement