RNS Number : 1253M
Steppe Cement Limited
17 September 2021
 

 

 

Steppe Cement Ltd

 

Interim Results for the Half Year ended 30 June 2021

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD6.2 million for the six months ended 30 June 2021, an increase of 52%.

 


6 months

ended

30 June 21

6 months

ended

30 June 20

% of change

Sales (Tonnes)

840,661

764,752

10%

Consolidated turnover KZT million

16,657

13,677

22%

Consolidated turnover (USD Million)

39.5

33.8

17%

Consolidated profit after tax (USD Million)

6.2

4.1

52%

Earnings per share (Cents)

2.8

1.9

47%

Average exchange rate (USD/KZT)

424

405

-5%

 

·    The Company managed to increase cement prices during the first half of 2021.

·    The average ex-factory price increased from 14,727 KZT /tonne (USD36 per tonne) to 16,571 KZT/tonne (USD39 per tonne) or 11% during the period.

·    Steppe Cement's gross margin increased from 40% to 46% in USD terms due to price increases.

·    Selling expenses per tonne increased in USD terms by 16% and in KZT by 21% due to increases in transportation prices from the national railways.

·    General and administrative expenses increased by 16% in USD.

·    The Kazakh Tenge average rate depreciated by 5% compared to the first half of 2020 but only translated in a small foreign exchange loss of USD 0.2 million as the company maintains very small loan balances in USD.

·    The Company generated operating profit before working capital changes of USD12.9 million in 1H 2021 against USD 11 million in 2020.

·    Kazakhstan GDP increased by 2.3% in 1H2021 compared to 1H2020 rebounding from a drop of 1.4% in the first quarter of 2021.

·    Reported inflation has been 7% up to the end of August 2021.

2. Production costs

·    Production costs increased by 5% in KZT mostly due to the higher electricity cost, diesel and spare parts for maintenance.

3. Update on the Kazakh cement market

·    The Kazakh cement market increased by 28% during the first half of the year. The increase is due mostly to the program set in place by the government that allows partial withdrawal from personal pension funds for real estate investment or health reasons. It was done to stimulate the economy and it may bring total cement consumption in 2021 to 10.5 to 11 million tonnes in 2021, an increase of more than 1 million tonnes from 2020.

·    Steppe Cement's local market share decreased from 16.5% in 1H2020 to 15% in 1H2021 due to the strong growth in the overall market. We expect to maintain this share for the full year. Exports represented 9% of the volumes in the 1H2021 from 11% last year.

·    Imports into Kazakhstan have increased to 0.4 million tonnes in 2021 and represent 7% of the market.

·    Exports from Kazakhstan have increased slightly to 0.97 million tonnes.

·    Exports from Kazakhstan represent 17% of local production from 18% last year.

·    Overall production of all factories in Kazakhstan has increased by 1 million tonnes to 5.7 million tonnes for the 1H2021 as closures in the smaller factories were balanced by increases in production by Gezhuoba Cement and Alacem.

·    Currently 82% of production in the country is manufactured from dry lines up from 80% in 2020.

 

4. Financing

·    Interest expenses on bank debt were reduced to USD 0.37 million from USD 0.41 million in 2020 mostly on subsidised loans while we reduced interest expenses on lease liabilities to USD 0.13 million from USD 0.35 million after the application of IFRS 16 on the 3 years wagon leases. The rental on those wagons was considered selling expenses previously.

·    Steppe Cement recorded a net cash position of USD7.4 million compared to net cash of USD6.4 million as of 30 June 2020.

·    The borrowings of the Company as of 30 June 2021 were USD6.1 million while we carried a cash balance of USD 13.5 million. For comparison, on 30 June 2020 we had USD3.2 million in borrowings and USD9.6 million in cash.

·    As of 15 September 2021 after paying the dividend, the financial debt was the equivalent of USD 5.6 million (all denominated in KZT) and the cash was USD10.5 million.

·    We have maintained the working capital lines available for the winter.

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 and broker is RFC Ambrian Limited.

Nominated Adviser: Contact Stephen Allen or Andrew Thomson at +61 8 9480 2500.

Broker: Contact Charlie Cryer at +44 20 3440 6800



SUMMARY OF INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2021 (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 STATEMENT OF PROFIT AND LOSS

FOR THE PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

 

 



The Group


The Company



6 months ended


6 months ended



30 June 2021


30 June 2020


30 June 2021


30 June 2020



USD'000


USD'000


USD'000


USD'000










Revenue


39,534


33,786


691


701










Cost of sales


(21,230)


(20,285)


-


-










Gross profit


18,304


13,501


691


701










Selling expenses


(6,577)


(5,162)


-


-










General and administrative









expenses


(2,965)


(2,566)


(157)


(135)










Operating profit


8,762


5,773


534


566

Interest income


78


112


-


^

Finance costs


(475)


(766)


-


-

Net foreign exchange (loss)/gain


(147)


(571)


(1)


3

Other income, net


(511)


248


-


82










Profit before income tax




533


651










Income tax expense


(1,515)


(736)


-


-










Profit for the period


6,192


4,060


533


651










Attributable to:









Shareholders of the Company


6,192


4,060


533


651










Earnings per share:


















Basic and diluted (cents)


2.8


1.9





 

^ Insignificant amount.

 

 



CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

 

 

 

 



The Group


The Company




6 months ended


6 months ended




30 June 2021


30 June 2020


30 June 2021


30 June 2020




USD'000


USD'000


USD'000


USD'000












Profit for the period


6,192


4,060


533


651












Other comprehensive loss:




















Item that may be reclassified subsequently to profit or loss




















Exchange differences arising on translation of foreign subsidiary companies


(902)


(3,499)


-


-












Total other comprehensive loss for the period


(902)


(3,499)


-


-












Total comprehensive income for the period


5,290


561


533


651












Attributable to:










Shareholders of the Company


5,290


561


533


651


 

 

 



CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2021 (UNAUDITED)

 

 



     The Group


The Company




Unaudited


Audited


Unaudited


Audited




30 June 2021


31 Dec 2020


30 June 2021


31 Dec 2020




USD'000


USD'000


USD'000


USD'000

Assets










Non-Current Assets:










Property, plant and equipment



49,461


48,856


-


-

Right-of-use assets



2,571


3,483





Investment in subsidiary companies



-


-


36,307


36,294

Loan to subsidiary company



-


-


30,100


30,110

Advances



11


-


-


-

Other assets



1,887


1,901


-


-











Total Non-Current Assets



53,930


54,240


66,407


66,404











Current Assets










Inventories



11,766


11,098


-


-

Trade and other receivables



3,438


2,332


7,807


6,776

Other assets



-


305


-


-

Income tax receivable



1,037


1,435


-


-

Loans and advances to subsidiary companies



-


-


40


40

Advances and prepaid expenses



4,915


3,644


18


6

Cash and cash equivalents



13,470


8,214


846


1,353











Total Current Assets



34,626


27,028


8,711


8,175











Total Assets



88,556


81,268


75,118


74,579



 



            The Group


The Company




Unaudited


Audited


Unaudited


Audited




30 June 2021


31 Dec 2020


30 June 2021


31 Dec 2020




USD'000


USD'000


USD'000


USD'000











Equity and Liabilities




















Capital and Reserves










Share capital



73,761


73,761


73,761


73,761

Revaluation reserve



2,222


2,370


-


-

Translation reserve



(119,416)


(118,514)


-


-

Retained earnings



106,665


100,325


1,164


631











Total Equity



63,232


57,942


74,925


74,392











Non-Current Liabilities










Borrowings



3,587


2,368


-


-

Lease liabilities



1,057


2,077


-


-

Deferred taxes



4,728


4,560


-


-

Deferred income



1,762


1,492


-


-

Provision for site restoration



177


151


-


-











Total Non-Current Liabilities



11,311


10,648


-


-











Current liabilities










Trade and other payables



5,116


4,075


-


-

Accrued and other liabilities



3,139


1,638


193


187

Borrowings



2,470


4,429


-


-

Lease liabilities



1,914


1,831


-


-

Taxes payable



1,374


705


-


-











Total Current Liabilities



14,013


12,678


193


187











Total Liabilities



25,324


23,326


193


187











Total Equity and Liabilities



88,556


81,268


75,118


74,579


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2021 (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











Balance as at 1 January 2021

73,761


2,370


(118,514)


100,325


57,942

Profit for the period

-


-


-


6,192


6,192

Other comprehensive loss

-


-


(902)


-


(902)

Total comprehensive income/(loss) for the period

-


-


(902)


6,192


5,290

Transfer of revaluation reserve relating to the depreciation of property, plant and equipment through use

-


(148)


-


148


-











Balance as at 30 June 2021

73,761


2,222


(119,416)


106,665


63,232

 

 



 




Non-distributable




Distributable



The Group

Share capital


Revaluation reserve


Translation reserve


Retained earnings


Total


USD'000


USD'000


USD'000


USD'000


USD'000











Balance as at 1 January 2020

73,761


2,016


(113,286)


100,386


62,877

Profit for the period

-


-


-


4,060


4,060

Other comprehensive (loss)/income

-


-


(3,499)


-


(3,499)

Total comprehensive income for the period

-


-


(3,499)


4,060


561

Transfer of revaluation reserve relating to the depreciation of property, plant and equipment through use

-


(157)


-


157


-











Balance as at 30 June 2020

73,761


1,859


(116,785)


104,603


63,438

 

 



 







 

The Company

Share capital


Retained earnings


Total








USD'000


USD'000


USD'000







Balance as at 1 January 2021

73,761


631


74,392

Total comprehensive income for the period

-


533


533

Balance as at 30 June 2021

73,761


1,164


74,925







Balance as at 1 January 2020

73,761


1,577


75,338

Total comprehensive income for the period

-


651


651

Balance as at 30 June 2020

73,761


2,228


75,989

 

 

          


CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2021 (UNAUDITED)

 

 




The Group


The Company




6 months ended


6 months ended




30 June 2021


30 June 2020


30 June 2021


30 June 2020




USD'000


USD'000


USD'000


USD'000

 










OPERATING ACTIVITIES










Profit before income tax



7,707


4,796


533


651











Adjustments for:










Depreciation of property, plant and equipment



3,733


3,559


-


-

Depreciation of right-of-use assets



1,031


1,446


-


-

Adjustments for non-cash items



478


1,192


(1,030)


(329)











Operating Profit/(Loss) Before Working Capital Changes



12,949


10,993


(497)


322











(Increase)/ Decrease in:










Inventories



(1,607)


541


-


-

Trade and other receivables,



(2,175)


(1,411)


(12)


(872)

advances and prepaid expenses










Loans and advances from subsidiary companies



-


-


(3)


10

Increase in:










Trade and other payables,



3,317


2,251


5


16

accrued and other liabilities




















Cash Generated From/(Used In) Operations



12,484


12,374


(507)


(524)

Income tax paid



(730)


(185)


-


-

Interest paid



(299)


(580)


-


-











Net Cash Generated From/(Used In) Operating Activities



11,455


11,609


(507)


(524)





















INVESTING ACTIVITIES










Purchase of property, plant and equipment



(4,529)


(2,644)


-


-

Purchase of other assets



(18)


-


-


-

Interest received



78


112


-


330











Net Cash (Used In)/Generated From Investing Activities



(4,469)


(2,532)


-


330





















FINANCING ACTIVITIES










Proceeds from borrowings



3,350


2,098


-


-

Repayment from borrowings



(4,089)


(9,003)


-


-

Payment of lease liabilities



(877)


(1,133)


-


-











Net Cash Used In Financing Activities



(1,616)


(8,038)


-


-











NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS



5,370


1,039


(507)


(194)

EFFECTS OF FOREIGN EXCHANGE RATE CHANGES



(114)


(486)


-


-

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD



8,214


9,014


1,353


262











CASH AND CASH EQUIVALENTS AT END OF THE PERIOD



13,470


9,567


846


68











 

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