Half-year Report

15 September 2025

Steppe Cement Ltd

("Steppe Cement" or the "Company")

Unaudited Interim Results for the Half Year Ended 30 June 2025 and General Market Update

Steppe Cement Ltd (AIM: STCM), is pleased to announce its unaudited interim results for the half year ended 30 June 2025, 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 2025 ("H1 2025" or the "Period"), the Group reported revenue of USD40.9 million, a 19% increase from USD34.4 million in the corresponding period in 2024. This increase was attributable to the 18% increase in sales volume. Volume of sales has been stable in the third quarter of 2025, and the price of cement has slightly increased as is typical during the high season.

The average sales price of cement delivered for the Company was USD48 per tonne (KZT24,361 per tonne) the same in USD as in 2024.

The gross margin increased by 21% in the six-month period to 30 June 2025 compared with 15% in the same period last year due mostly to the higher production and selling price in Kazakhstani Tenge ("KZT"). The cost of electricity continues to increase well above inflation however selling expenses have fallen by 13% as the Company concentrates on markets closer to the factory, while administration expenses have increased by 6%. 

General inflation in Kazakhstan has increased to 11.8% in H1 2025 vs 8.4% the previous year. The increase is due to higher prices of utilities (water, electricity and heating), food and imported goods following a 13% depreciation of the KZT. In response, the National Bank of Kazakhstan increased the refinancing rate in KZT to 16.5% in March 2025 to try to reduce inflation. 

The Group reported a net loss for the Period of USD0.5 million compared with a loss of USD3.5 million after tax in the same period in 2024. 

Production and Capex 

• Cash production costs remained flat in KZT terms in the H1 2025 compared to the same period in 2024, as higher production levels offset increased electricity, diesel and consumable costs. In H2 2025, further increases in electricity tariffs and continued general inflation is expected. The government has announced an inflation target of 11% to 12% for the full year.

• Clinker production volume increased by 4% in H1 2025 and continued to increase in the third quarter of 2025 with a full year growth target growth of 8%.

• Capex has been focused on compliance with ecological requirements, particularly the installation of filters.

• A new dynamic separator for raw mill number 3 has been commissioned.

• The Company is exploring the opportunities to further increase clinker production in Line 6 as well as other options to optimise our assets.

Kazakh Cement Market Update 

• During H1 2025, the Kazakh cement market increased in size by 19% compared to the same period in 2025 due to weather conditions, general economic growth, infrastructure projects, population growth and subsidised lending for private mortgages. The growth has been mostly concentrated in South Kazakhstan. We expect slower growth in the second half of 2025.

• The Company expects to maintain its market share at approximately 14% for the full financial year ended 31 December 2025 and volumes of 1.8 to 1.85 million tonnes. 

• Exports of cement from Kazakhstan in the first half of 2025 declined to 0.4 million tonnes compared to 0.45 million in the same period of 2024.

• Imports of cement in the Period represented 7.7% of the local market, 1.5 times higher than in 2024. A significant built up of capacity in Uzbekistan has led to lower prices, resulting in reduced exports to Uzbekistan and increased imports into South Kazakhstan.

Financial Update

• Total finance costs for the Period were USD0.6 million, including interest expenses on bank debt of USD0.5 million, mostly from subsidised loans.

• The Company recorded USD0.1 million in advanced income tax payments, which are expected to be offset against future tax liabilities. 

• As at 30 June 2025, the Company's borrowings totalled USD4.8 million, with a cash balance of USD7.3 million. Inventories of clinker and cement were also valued at USD7.3 million as at 30 June 2025.

For further information, please contact:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS

FOR THE PERIOD ENDED 30 JUNE 2025 (UNAUDITED)

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

CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2025 (UNAUDITED)

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

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2025 (UNAUDITED)

(Cont'd)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2025 (UNAUDITED)

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

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2025 (UNAUDITED)

(Cont'd)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2025 (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2025 (UNAUDITED)

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2025 (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 STATEMENTS

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 2024. 

The condensed interim financial statements of the Group and the Company were authorised for issue by the Board of Directors on 10 September 2025.

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 2024, except for the adoption of new standards effective as of 1 January 2025.

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 2025, the Group posted revenue of USD40.9 million, an increase of 19% from USD34.4 million in the corresponding period of 2024. The growth in revenue was mainly attributable to an 18% increased in sales volume, particularly in regions nearer to the plant. 

The average sales price in tenge was KZT24,656 per tonne compared with KZT21,458 per tonne in the same period of 2024. However, in USD terms, the average price remained unchanged at USD48 per tonne.

The gross margin improved to 21% in the six-month period to 30 June 2025, compared with 15% in the same period last year, driven by higher volumes, increased selling prices and production efficiencies despite higher costs. Selling expenses decreased by USD0.7 million or 13% to USD5.4 million, while general and administration expenses increased by 6% (USD0.2 million) to USD3.6 million.

As a result, the Group recorded a lower net loss of USD0.5 million, compared with a loss after tax of USD3.5 million in the same period of 2024.

5. SEASONAL OR CYCLICAL FACTORS

The Group's revenue is closely linked to the construction sector which experiences seasonal, significant slow-down in construction activities due to extreme, cold temperature 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 the central region of the Republic of Kazakhstan. 

7. REVENUE

8. FINANCE COSTS

9. INCOME TAX EXPENSE