10th Sep 2012 07:00
10 September 2012
Steppe Cement Ltd
Interim Results for the Half Year 30 June 2012
and General Market Update
1. Interim Results
Steppe Cement Ltd ("Steppe Cement" or the "Company") posted a consolidated loss after tax of USD0.1 million for the six months ended 30 June 2012.
6 months ended 30 June 12 | 6 months ended 30 June 11 | % change | |
Sales (Tonnes) | 615,838 | 601,099 | 2.5% |
Consolidated turnover (USD Million) | 52.2 | 43.0 | 21.4% |
Consolidated loss after tax (USD Million) | (0.1) | (2.2) | |
Loss per share (Cents) | (0.1) | (1.3) | |
Average exchange rate (USD/KZT) | 148 | 146 |
·; Sales increased by 23% in Tenge ("KZT") while volumes increased by 2%. The average sales price increased from USD72/tonne to USD86/tonne during the period.
·; Production costs per tonne increased by 11% in USD. The increase is due to higher electricity, transportation and coal costs partly offset by productivity increases. The number of employees declined from 1,049 to 1,036 as at the end of June 2012 despite the increase in production.
·; Selling expenses have grown on a per tonne basis by 19% mostly due to the increase in wagons rental rates.
·; General and administrative expenses increased by 15% during the period partly due to the organization of works for line 5.
·; Steppe Cement generated USD8.6 million cash from operations in the 1H 2012 while managing to maintain inventories that will allow us to increase sales significantly during the second half of 2012.
·; The KZT has slightly depreciated during the last 12 months and currently stands at about 149KZT to 1USD.
·; The Kazakhstan economy is expected to grow at 5-6% in 2012.
2. Update on the Kazakh cement market
·; The Kazakhstan cement market increased by 16% during the first half of the year. Steppe Cement expects a market of 6.8 million tonnes for the full year 2012, an increase of 9.7% compared to the 6.2 million tonnes in 2011.
·; Prices are expected to increase in the 2H of 2012 when compared to the 1H of 2012.
·; Overall local production has increased by 20% in the first half of 2012 compared to 2011 while the share of the imported cement decreased from 17% to 14%.
·; Steppe Cement's market share decreased from 21% in 1H2011 to 19% in 1H2012 but Steppe Cement expects it to be around 20% for the full year 2012.
·; The Kazakhstan Government has continued its road building plan as well as significant infrastructure projects in the main cities.
·; There have been no new entrants in the market and the two factories that started in 2011 have ramped up capacity during the summer to cover increased demand.
3. Production and refurbishment progress
·; Dry line 6 production has increased by 24% when compared to last year while the wet lines production has decreased.
·; For the full year 2012 the volumes from the dry line are expected to reach 57% of total production.
·; The works on line 5 continue as we are taking advantage of the positive cash flows after fulfilling our financial obligations.
4. Financing
·; Steppe Cement continues to explore financing options from multilateral institutions as well as a potential bond issue in the local Kazakhstan Stock Market to finance the completion of line 5.
A pdf copy of the announcement and the full interim financial statements is available on the company's website at www.steppecement.com.
Steppe Cement's AIM nominated adviser is RFC Ambrian Limited.
Contact Stephen Allen or Trinity McIntyre at +61 8 94802500.
SUMMARY OF INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
(In United States Dollars)
The Notes to the Interim Financial Statements form an integral part of the Condensed Financial Statements. Please visit the Company's website at www.steppecement.com to view the full interim financial statements.
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
AND ITS SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
The Group | The Company | |||||||
6 months ended | 6 months ended | |||||||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | |||||
USD'000 | USD'000 | USD'000 | USD'000 | |||||
Revenue | 52,155 | 43,059 | 50 | 50 | ||||
Cost of sales | (34,099) | (30,757) | - | - | ||||
Gross profit | 18,056 | 12,302 | 50 | 50 | ||||
Selling expenses | (9,653) | (7,886) | - | - | ||||
General and administrative | ||||||||
expenses | (5,242) | (4,573) | (264) | (261) | ||||
Operating income/(loss) | 3,161 | (157) | (214) | (211) | ||||
Investment income | - | 17 | - | - | ||||
Finance costs | (2,268) | (2,673) | - | - | ||||
Other expense, net | (502) | (25) | (9) | (19) | ||||
Profit/(Loss) before income tax | 391 | (2,838) | (223) | (230) | ||||
Income tax (expense)/credit | (500) | 600 | - | - | ||||
Loss for the period | (109) | (2,238) | (223) | (230) | ||||
Attributable to: | ||||||||
Shareholders of the Company | (109) | (2,238) | (223) | (230) | ||||
Loss per share: | ||||||||
Basic (cents) | (0.1) | (1.3) | ||||||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
The Group | The Company | ||||||||
6 months ended | 6 months ended | ||||||||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | ||||||
USD'000 | USD'000 | USD'000 | USD'000 | ||||||
Loss for the period | (109) | (2,238) | (223) | (230) | |||||
Other comprehensive (loss)/income: | |||||||||
Exchange differences arising on translation of foreign subsidiary companies | (899) | 1,357 | - | - | |||||
Total comprehensive loss for the period | (1,008) | (881) | (223) | (230) | |||||
Attributable to: | |||||||||
Shareholders of the Company | (1,008) | (881) | (223) | (230) | |||||
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012 (UNAUDITED)
The Group | The Company | ||||||||
Unaudited | Audited | Unaudited | Audited | ||||||
30 June 2012 | 31 Dec 2011 | 30 June 2012 | 31 Dec 2011 | ||||||
USD'000 | USD'000 | USD'000 | USD'000 | ||||||
Assets | |||||||||
Non-Current Assets: | |||||||||
Property, plant and equipment | 130,743 | 134,761 | - | - | |||||
Investment in subsidiary companies | - | - | 26,500 | 26,500 | |||||
Advances paid | 906 | 993 | - | - | |||||
Other assets | 31,169 | 28,162 | - | - | |||||
Total Non-Current Assets | 162,818 | 163,916 | 26,500 | 26,500 | |||||
Current Assets | |||||||||
Inventories, net | 20,703 | 21,373 | - | - | |||||
Trade receivables, net | 5,303 | 2,582 | - | - | |||||
Amount owing by subsidiary companies | - | - | 28,939 | 29,151 | |||||
Other receivables, advances and prepaid expenses | 11,325 | 11,391 | - | - | |||||
Cash and bank balances | 8,322 | 494 | 159 | 103 | |||||
Total Current Assets | 45,653 | 35,840 | 29,098 | 29,254 | |||||
Total Assets | 208,471 | 199,756 | 55,598 | 55,754 | |||||
The Group | The Company | |||||||
Unaudited | Audited | Unaudited | Audited | |||||
30 June 2012 | 31 Dec 2011 | 30 June 2012 | 31 Dec 2011 | |||||
USD'000 | USD'000 | USD'000 | USD'000 | |||||
Equity and Liabilities | ||||||||
Capital and Reserves | ||||||||
Share capital | 58,298 | 58,298 | 58,298 | 58,298 | ||||
| Revaluation reserve | 8,751 | 9,477 | - | - | ||||
Translation reserve | (20,908) | (20,009) | - | - | ||||
Retained earnings/ (Accumulated loss) | 79,838 | 79,221 | (3,659) | (3,436) | ||||
Total Equity | 125,979 | 126,987 | 54,639 | 54,862 | ||||
Non-Current Liabilities | ||||||||
Loans | 37,160 | 43,212 | - | - | ||||
Deferred tax liabilities | 6,617 | 6,176 | - | - | ||||
Total Non-Current Liabilities | 43,777 | 49,388 | - | - | ||||
Current liabilities | ||||||||
Trade payables | 6,481 | 7,841 | - | - | ||||
Other payables and accrued liabilities | 9,665 | 3,661 | 959 | 892 | ||||
Loans | 22,206 | 11,435 | - | - | ||||
Taxes payable | 363 | 444 | - | - | ||||
Total Current Liabilities | 38,715 | 23,381 | 959 | 892 | ||||
Total Liabilities | 82,492 | 72,769 | 959 | 892 | ||||
Total Equity and Liabilities | 208,471 | 199,756 | 55,598 | 55,754 | ||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
Non-distributable | Distributable | ||||||||||||
The Group | Share capital | Share Premium | Revaluation reserve | Translation reserve | Retained earnings | Total/Net | |||||||
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | ||||||||
Balance as at 1 January 2011 | 58,298 | - | 10,940 | (18,944) | 74,425 | 124,719 | |||||||
Loss for the period | - | - | - | - | (2,238) | (2,238) | |||||||
Exchange differences arising on translation of foreign subsidiary companies | - | - | - | 1,357 | - | 1,357 | |||||||
Total comprehensive income/(loss) for the period | - | - | - | 1,357 | (2,238) | (881) | |||||||
Balance as at 30 June 2011 | 58,298 | - | 10,940 | (17,587) | 72,187 | 123,838 | |||||||
Non-distributable | Distributable |
| |||||||||||||||
The Group | Share capital | Share Premium | Revaluation reserve | Translation reserve | Retained earnings | Total/Net |
| ||||||||||
USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | USD'000 |
| |||||||||||
Balance as at 1 January 2012 | 58,298 | - | 9,477 | (20,009) | 79,221 | 126,987 |
| ||||||||||
Loss for the period | - | - | - | - | (109) | (109) |
| ||||||||||
Exchange differences arising on translation of foreign subsidiary companies | - | - | - | (899) | - | (899) |
| ||||||||||
Total comprehensive loss for the period | - | - | - | (899) | (109) | (1,008) |
| ||||||||||
Depreciation transfer on revaluation reserve | - | - | (726) | - | 726 | - |
| ||||||||||
| |||||||||||||||||
Balance as at 30 June 2012 | 58,298 | - | 8,751 | (20,908) | 79,838 | 125,979 |
| ||||||||||
Non-distributable | Distributable | ||||||||
The Company | Share capital | Share Premium | Retained earnings | Total/Net | |||||
USD'000 | USD'000 | USD'000 | USD'000 | ||||||
Balance as at 1 January 2011 | 58,298 | - | (3,038) | 55,260 | |||||
Total comprehensive loss for the period | - | - | (230) | (230) | |||||
Balance as at 30 June 2011 | 58,298 | - | (3,268) | 55,030 | |||||
Balance as at 1 January 2012 | 58,298 | - | (3,436) | 54,862 | |||||
Total comprehensive loss for the period | - | - | (223) | (223) | |||||
Balance as at 30 June 2012 | 58,298 | - | (3,659) | 54,639 | |||||
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)
The Group | The Company | |||||||||||
6 months ended | 6 months ended | |||||||||||
30 June 2012 | 30 June 2011 | 30 June 2012 | 30 June 2011 | |||||||||
USD'000 | USD'000 | USD'000 | USD'000 | |||||||||
| OPERATING ACTIVITIES | ||||||||||||
Profit/(Loss) before tax | 391 | (2,838) | (223) | (230) | ||||||||
Adjustments for non-cash items | 7,612 | 6,621 | 7 | - | ||||||||
Operating Profit/(Loss) Before Working Capital Changes | 8,003 | 3,783 | (216) | (230) | ||||||||
(Increase)/ Decrease in: | ||||||||||||
Inventories | 2,038 | 1,411 | - | - | ||||||||
Trade receivables | (2,720) | (414) | - | - | ||||||||
Other receivable and prepaid expenses | (1,124) | (1,399) | - | 1 | ||||||||
Amount owing by subsidiary companies | - | - | 213 | (350) | ||||||||
Increase/ (Decrease) in: | ||||||||||||
Trade payables | (1,421) | 1,531 | - | - | ||||||||
Other payables and accrued liabilities | 6,135 | 4,840 | 59 | 106 | ||||||||
Cash Generated From/(Used In) Operations | 10,911 | 9,752 | 56 | (473) | ||||||||
Income tax paid | (518) | (107) | - | - | ||||||||
Interest paid | (1,784) | (2,343) | - | - | ||||||||
Net Cash Generated From/(Used In) Operating Activities | 8,609 | 7,302 | 56 | (473) | ||||||||
INVESTING ACTIVITIES | ||||||||||||
Proceeds from disposal of property, plant and equipment | - | - | - | - | ||||||||
Purchase of property, plant and equipment | (1,755) | (280) | - | - | ||||||||
Purchase of non-current assets | (3,139) | (162) | - | - | ||||||||
Interest received | - | 17 | - | - | ||||||||
Net Cash Used In Investing Activities | (4,894) | (425) | - | - | ||||||||
FINANCING ACTIVITIES | ||||||||||||
Proceeds from borrowings | 8,223 | 6,171 | - | - | ||||||||
Repayment from borrowings | (4,107) | (2,910) | ||||||||||
Net Cash From by Financing Activities | 4,116 | 3,261 | - | - | ||||||||
NET INCREASE/(DECREASE)/ IN CASH AND CASH EQUIVALENTS | 7,831 | 10,138 | 56 | (473) | ||||||||
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES | (3) | 85 | - | - | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | 494 | 9,532 | 103 | 964 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 8,322 | 19,755 | 159 | 491 | ||||||||
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Steppe Cement