Half-year Report

9 September 2026

Steppe Cement Ltd

("Steppe Cement" or the "Company")

Unaudited Interim Results for the Half Year Ended 30 June 2026, Market Update and Dividend

Steppe Cement Ltd (AIM: STCM), is pleased to announce its unaudited interim results for the half year ended 30 June 2026.

A copy of this announcement and the full interim financial statements are available on the Company's website at https://www.steppecement.com/investors/rns-announcements/

Unaudited Interim Results

During the six-month period to 30 June 2026 ("H1 2026" or the "Period"), the Company sold 978,950 tonnes of cement, generating consolidated turnover of KZT29,588 million (approximately USD61.1 million), compared with 850,424 tonnes and KZT20,717 million (approximately USD40.9 million) in H1 2025. Sales volume increased by 15% and turnover in KZT increased by 43%. The Group recorded a profit after tax of USD9.0 million, compared with a loss of USD0.5 million in H1 2025.

From the low of 550 KZT/USD in July 2025, the Kazakh Tenge has appreciated significantly against the USD. The effect on the accounts of Steppe Cement denominated in USD has been significant when compared to the accounts of the subsidiaries denominated in KZT.

The average delivered cement price for the Period was KZT30,224 per tonne (approximately USD62.1 per tonne), compared with KZT24,361 per tonne (approximately USD47.6 per tonne) in H1 2025. The ex-factory price was KZT27,747 per tonne (approximately USD57.1), compared with KZT21,126 per tonne (approximately USD41.3) in H1 2025. The average 5% appreciation of the KZT against the USD over the period contributed to the increase in the USD-denominated selling price.

Gross margin increased to 34% in H1 2026 from 21% in H1 2025, driven by higher selling prices and improved operating performance on bigger produced volumes. Selling expenses stayed constant in KZT but increased in USD terms by 7% to USD5.8 million, while administrative expenses increased by 14% to USD4.1 million. Transport and electricity costs continued to increase faster than inflation. The Company remained focused on markets close to the factory.

Profit from operations was USD11.8 million compared with USD0.01 million in H1 2025. Finance costs decreased to USD0.3 million from USD0.6 million. The Group recorded an income tax charge of USD2.5 million, resulting in profit after tax of USD9.0 million for the Period.

Production

· Production levels in H1 2026 were maintained at levels comparable to H1 2025. Property, plant and equipment additions during H1 2026 were USD2.1 million, compared with USD0.7 million in H1 2025.

· The production levels are maintained in July and August.

Capex

· The Company continued its project to expand production capacity to 2.5 million tonnes. USD2 million was spent in H1 2026 on advance payments. All the project contracts have been signed. Major demolition and foundation works are nearing completion and structural works have started in most project areas, with more than 250 workers on site. Commissioning remains planned for summer 2027 after a 3-month shutdown of line 6.

· The clay crusher bag filter, a significant ecological improvement, has been commissioned.

· The line 6 back-end filter is expected to be completed in October.

· The Company has signed a new agreement with the Ecological Department of the Government, committing to implementing BAT (best available technologies) over a period of ten years. This agreement involves investments of up to USD10 million over the period (2025 to 2035) but brings savings in ecological taxes of USD1.5 million per annum.

· The USD35 million capacity expansion project and related ecological improvements is currently being financed from cash flow, rather than the debt financing originally envisaged. The Company intends to consider debt financing only in scenarios where the current project is expanded. As the project contracts are mostly denominated in USD, the Company is hedging most of the related currency exposure by keeping USD deposits.

· Pictures of the progress on the site can be found in https://karcement.kz/project-l6-4500-2

Kazakh Cement Market Update

· In H1 2026, the domestic Kazakh cement market remained broadly flat year-on-year, with exports and imports also remaining at approximately H1 2025 levels.

· The Company's market share reached approximately 15% in the first half, an increase of 2% from the prior year.

· For the full year 2026, the Company anticipates sales of approximately 1.95 to 2 million tonnes of cement. This is slightly below 2025 levels, primarily due to the lower clinker inventory carried into the year.

· The Company expects the total Kazakh cement market for 2026 to remain broadly in line with 2025.

Financial Update

· Total finance costs for the period were USD0.3 million, including USD0.2 million of interest expense on borrowings.

· Net cash generated from operating activities increased to USD9.6 million from USD2.2 million in H1 2025.

· Total borrowings were USD2.1 million on 30 June 2026 and cash equivalents were USD18.8 million, resulting in a net cash position of approximately USD16.7 million.

· Inventories were USD20.6 million as of 30 June 2026, compared with USD19.0 million on 31 December 2025.

· The Group had USD6.2 million undrawn working capital facilities available under Halyk Bank JSC short-term loan facilities as of 30 June 2026.

Macroeconomic background

· Inflationary pressures moderated slightly in H1 2026, with inflation at 10.3% compared with 11.8% in H1 2025. The National Bank of Kazakhstan base rate stood at 17%, compared with 16.5% at the same point in 2025 and 18% between October 2025 and early June 2026. The National Bank of Kazakhstan cut rates to 16.75% in July and further to 16.25% in September.

· The KZT appreciated by approximately 7% against the USD from June 2025 to June 2026, from approximately KZT520/USD to KZT486/USD and KZT453/USD at the time of writing this update. The appreciation of the KZT and the high interest has attracted foreign investors into the sovereign debt market. Non-residents held approximately 8% of outstanding government debt securities as of end June 2026, an all-time high.

Corporate

· The Company completed the restructuring of the holding companies by closing the Netherlands based holding company and Mechanical and Electrical Sdn Bhd in Malaysia.

· The Kazakh subsidiaries are now held directly by the Steppe Cement Sdn Bhd in Malaysia, itself owned 100% by the listed entity Steppe Cement Ltd in Labuan. Further improvements to the structure are still under consideration.

· This structure allows the Company to pay a dividend with an effective withholding tax on dividends of 5% or 10% depending on the amount. Smaller dividends are subject to lower taxation in Kazakhstan.

· The local subsidiary Karcement has issued a bond that is progressively being bought by the holding company, replacing a direct loan that has been outstanding from 2008. At the end of June 2026 USD15 million of bonds have been purchased. This is considered internal debt, so it does not appear at the consolidated level.

· The Board of Directors has resolved that the Company will pay an interim dividend of 2p per ordinary share. The dividend will be paid in the month of October 2026.

· The Company will give a presentation on the H1 unaudited results on 15 September 2026 at 10AM Londontime via InvestorMeet.

For further information, please contact:

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 2026 (UNAUDITED)

The accompanying notes form an integral part of the Condensed Financial Statements.

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 2026 (UNAUDITED)

The accompanying notes form an integral part of the Condensed Financial Statements.

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 2026 (UNAUDITED)

(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 2026 (UNAUDITED)

The accompanying notes form an integral part of the Condensed Financial Statements.

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 2026 (UNAUDITED)

(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 2026 (UNAUDITED)

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 2026 (UNAUDITED)

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 2026 (UNAUDITED)

The accompanying notes form an integral part of the Condensed Financial Statements.

STEPPE CEMENT LTD

(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)

AND ITS SUBSIDIARY COMPANIES

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL INFORMATION

Steppe Cement Ltd ("the Company") is incorporated and domiciled in Malaysia. The Company's and its subsidiaries' ("the Group") principal place of business is located at Aktau village, Karaganda region, Republic of Kazakhstan. The Company's shares are listed on the AIM Market of the London Stock Exchange plc.

The registered office of the Company is located at Brumby Centre, Lot 42, Jalan Muhibbah, 87000 Labuan FT, Malaysia.

2. BASIS OF PREPARATION OF CONDENSED INTERIM FINANCIAL STATEMENT

Basis of presentation

The condensed interim financial statements of the Group and the Company are unaudited and have been prepared in accordance with International Financial Reporting Standards ("IFRS").

The condensed interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the audited financial statements for the year ended 31 December 2025. 

The condensed interim financial statements of the Group and the Company were authorised for issue by the Board of Directors on 4 September 2026.

Use of estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Due to the inherent uncertainty in making those estimates, actual results reported in future periods could differ from such estimates.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Group and the Company have been prepared under the historical cost convention except the revaluation of land and building to fair values in accordance with IAS 16 "Property, Plant and Equipment" (Note 11).

The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2025, except for the adoption of new standards effective as of 1 January 2026.

The adoption of these Amendments did not have an impact on the Group's condensed consolidated interim financial statements.

The principal closing rates used in translation of foreign currency amounts are as follows:

4. REVIEW OF RESULTS FOR THE PERIOD

During the six-month period ended 30 June 2026, the Group posted revenue of USD61.1 million, an increase of 49% from USD40.9 million in the corresponding period of 2025. The growth in revenue was mainly attributable to an 15% increase in sales volume, particularly in regions nearer to the plant. 

The average sales price in tenge was USD62 (KZT30,224) per tonne compared with USD48 (KZT24,361) per tonne in the same period of 2025.

The gross margin improved to 34% in the six-month period to 30 June 2026, compared with 21% in the same period last year, driven by higher volumes, increased selling prices and production efficiencies despite higher costs. Selling expenses increased by USD0.4 million or 7% to USD5.8 million, while general and administration expenses increased by 14% (USD0.5 million) to USD4.1 million.

As a result, the Group recorded a higher net profit of USD9.0 million, compared with a loss after tax of USD0.5 million in the same period of 2025.

5. SEASONAL OR CYCLICAL FACTORS

The Group's revenue is closely linked to the construction sector which experiences significant seasonal slow-down in construction activities due to extremely cold temperatures, especially during the months of December, January and February in most parts of Kazakhstan. Each year, the Group's sales improve after winter and typically peak during the summer months.

6. SEGMENTAL REPORTING

No industry and geographical segmental reporting are presented as the Group's primary business is in the production and sale of cement, which is located in Karaganda region, Republic of Kazakhstan. 

7. REVENUE

8. FINANCE COSTS

9. INCOME TAX EXPENSE