RNS Number : 5825A
Steppe Cement Limited
26 September 2022
 

 

 

Steppe Cement Ltd

Interim Results for the Half Year ended 30 June 2022

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD10.2 million for the six months ended 30 June 2022, an increase of 65% over the corresponding period for the previous year.

 


6 months

ended

30 June 22

6 months

ended

30 June 21

% of change

Sales (Tonnes)

837,063

840,661

0%

Consolidated turnover KZT million

19,779

16,657

19%

Consolidated turnover (USD million)

43.1

39.5

9%

Consolidated profit after tax (USD million)

10.2

6.2

65%

Earnings per share (Cents)

4.7

2.8

47%

Average exchange rate (USD/KZT)

449

424

-6%

 

·    The Company managed to increase prices in the first during the first half of 2022, with the average ex-factory price achieved increasing from 16,571 KZT /tonne (USD39 per tonne) to 20,485 KZT/tonne (USD 45 per tonne) or 18% compared with first half 2021.

·    Steppe Cement's gross margin increased from 44% to 46% in USD terms compared with first half 2021 due to the price increases.

·    Selling expenses per tonne decreased in USD terms by 20% compared with the corresponding period in 2021 primarily due to increased sales to markets closer to the factory.

·    Administrative expenses increased by 7% in USD terms compared with first half of 2021.

·    On average, the Kazakh Tenge depreciated by 6% compared to the first half of 2021 but only translated in a small foreign exchange loss of USD 0.2 million.

·    The Company generated operating profit before working capital changes of USD 16.3 million in 1H 2022 against USD 12.9 million in the corresponding period for 2021.

·    Kazakhstan GDP increased by 3.4% in the first half of 2022 compared to the first half of  2021. In the first quarter of 2022 the GDP growth was 4.6% despite the January and February local and international instability.

·    Reported inflation has been 15% up to the end of June 2022.

2. Production and capex

·    Production costs increased by 11% in KZT in the first half of 2022 primarily due to the higher electricity cost, diesel and spare parts for maintenance.

·    The separator of cement mill number 1 has been commissioned and work has started in the separator of cement mill number 2.

3. Update on the Kazakh cement market

·    The Kazakh cement market increased by 2% during the first half of the year as the government has maintained its incentives for construction.

·    Steppe Cement maintained its local market share at 14.5% in 1H2022. We expect to maintain or increase this share for the full year.

·    Exports at 0.54 million tonnes represented 10% of the volumes in the 1H2022 from 9% last year.

·    Imports into Kazakhstan have been decreased to 0.35 million tonnes in 2022 and represent 6% of the market.

·    Overall production of all factories in Kazakhstan has decreased by 0.4 million tonnes to 4.8 million tonnes for the 1H2022 as reductions in bigger factories were balanced by increased volumes in Gezhuoba and Alacem.

·    Currently 82% of production in the country is manufactured from dry lines a similar figure than last year.

 

4. Finance

·    Interest expenses on bank debt reduced to USD 0.2 million from USD 0.3 million in 2021 mostly on subsidised loans while we maintained interest expenses on lease liabilities at USD 0.1 million after to the application of IFRS 16 on the 3-year wagon leases. The rental on those wagons was previously treated as selling expenses. The contract to rent wagons is due for renewal in in the second half of 2022.

·    Steppe Cement recorded a net cash position of USD9.3 million compared to net cash of USD7.4 million as of 30 June 2021.

·    The borrowings of the Company as of 30 June 2022 were USD5.4 million while we carried a cash balance of USD14.7 million. For comparison, on 30 June 2021 the Company had USD6.1 million of borrowings and USD13.5 million in cash.

·    Pursuant to the announcement of the Company on 13 June 2022, the Company has reserved GBP11 million in cash (5p/share) for payment to shareholders through a dividend or alternative process such as a capital return, in respect of the results for the full year ended 31 December 2021.  The approach to be taken on how to proceed with payment of this amount to shareholders in the most tax effective way remains under consideration, however, the Company anticipates an announcement regarding this distribution and its timing will be made in November. 

 

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 2022 (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 2022 (UNAUDITED)

 

 



The Group


The Company



6 months ended


6 months ended



30 June 2022


30 June 2021


30 June 2022


30 June 2021



USD'000


USD'000


USD'000


USD'000










Revenue


43,125


39,534


670


691










Cost of sales


(23,148)


(22,082)


-


-










Gross profit


19,977


17,452


670


691










Selling expenses


(5,285)


(6,577)


-


-










General and administrative









expenses


(3,183)


(2,965)


(165)


(157)










Operating profit


11,509


7,910


505


534

Interest income


266


78


-


-

Finance costs


(435)


(475)


-


-

Net foreign exchange (loss)/gain


(246)


(147)


3


(1)

Other income, net


940


341


-


-










Profit before income tax


12,034


7,707


508


533










Income tax expense


(1,831)


(1,515)


-


-










Profit for the period


10,203


6,192


508


533










Attributable to:









Shareholders of the Company


10,203


6,192


508


533










Earnings per share:


















Basic and diluted (cents)


4.7


2.8





 

^ Insignificant amount.

 

 



CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2022 (UNAUDITED)

 

 

 

 



The Group


The Company




6 months ended


6 months ended




30 June 2022


30 June 2021


30 June 2022


30 June 2021




USD'000


USD'000


USD'000


USD'000












Profit for the period


10,203


6,192


508


533












Other comprehensive loss:










 










Item that may be reclassified subsequently to profit or loss




















Exchange differences arising on translation of foreign subsidiary companies


(4,941)


(902)


-


-











Total other comprehensive loss for the period


(4,941)


(902)


-


-












Total comprehensive income for the period


5,262


5,290


508


533












Attributable to:










Shareholders of the Company


5,262


5,290


508


533


 

 

 



CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022 (UNAUDITED)

 

 



     The Group


The Company




Unaudited


Audited


Unaudited


Audited




30 June 2022


31 Dec 2021


30 June 2022


31 Dec 2021




USD'000


USD'000


USD'000


USD'000

Assets










Non-Current Assets:










Property, plant and equipment



44,599


48,438


-


-

Right-of-use assets



792


1,700





Investment in subsidiary companies



-


-


36,200


36,200

Loan to subsidiary company



-


-


30,114


30,080

Advances



6


-


-


-

Other assets



161


155


-


-











Total Non-Current Assets



45,558


50,293


66,314


66,280











Current Assets










Inventories



17,356


16,024


-


-

Trade and other receivables



4,544


1,752


1,265


1,724

Other assets



2,076


2,258


-


-

Income tax receivable



846


911


-


-

Loans and advances to subsidiaries companies



-


-


39


50

Advances and prepaid expenses



8,439


5,234


17


5

Cash and cash equivalents



14,694


10,136


1,602


614











Total Current Assets



47,955


36,315


2,923


2,393











Total Assets



93,513


86,608


69,237


68,673



 



            The Group


The Company




Unaudited


Audited


Unaudited


Audited




30 June 2022


31 Dec 2021


30 June 2022


31 Dec 2021




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



1,931


2,068


-


-

Translation reserve



(125,379)


(120,438)


-


-

Retained earnings



120,530


110,190


(5,098)


(5,606)











Total Equity



70,843


65,581


68,663


68,155











Non-Current Liabilities










Borrowings



3,621


1,941


-


-

Lease liabilities



4


9


-


-

Deferred taxes



3,654


4,319


-


-

Deferred income



1,868


1,588


-


-

Provision for site restoration



172


180


-


-











Total Non-Current Liabilities



9,319


8,037


-


-











Current liabilities










Trade and other payables



5,803


5,062


-


-

Accrued and other liabilities



3,369


1,553


284


228

Amount due to subsidiary company



-


-


290


290

Borrowings



1,807


3,615


-


-

Lease liabilities



966


2,018


-


-

Deferred income



100


103


-


-

Taxes payable



1,306


639


-


-











Total Current Liabilities



13,351


12,990


574


518











Total Liabilities



22,670


21,027


574


518











Total Equity and Liabilities



93,513


86,608


69,237


68,673


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2022 (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 2022

73,761


2,068


(120,438)


110,190


65,581

Profit for the period

-


-


-


10,203


10,203

Other comprehensive loss

-


-


(4,941)


-


(4,941)

Total comprehensive income for the period

-


-


(4,941)


10,203


5,262

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

-


(137)


-


137


-











Balance as at 30 June 2022

73,761


1,931


(125,379)


120,530


70,843

 

 



 

 

 




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



 







 

The Company

Share capital


(Accumulated losses)/ Retained earnings


Total








USD'000


USD'000


USD'000







Balance as at 1 January 2022

73,761


(5,606)


68,155

Total comprehensive income for the period

-


508


508

Balance as at 30 June 2022

73,761


(5,098)


68,663







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

 

 

          


CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2022 (UNAUDITED)

 

 




The Group


The Company




6 months ended


6 months ended




30 June 2022


30 June 2021


30 June 2022


30 June 2021




USD'000


USD'000


USD'000


USD'000

 










OPERATING ACTIVITIES










Profit before income tax



12,034


7,707


508


533











Adjustments for:










Depreciation of property, plant and equipment



3,203


3,733


-


-

Depreciation of right-of-use assets



823


1,031


-


-

Non-cash items



218


478


(1,090)


(1,030)











Operating Profit/(Loss) Before Working Capital Changes



16,278


12,949


(582)


(497)











(Increase)/ Decrease in:










Inventories



(2,922)


(1,607)


-


-

Trade and other receivables,



(6,444)


(2,175)


(12)


(12)

advances and prepaid expenses










Loans and advances from subsidiary companies



-


-


(24)


(3)

Increase in:










Trade and other payables,



3,494


3,317


56


5

accrued and other liabilities




















Cash Generated From/(Used In) Operations



10,406


12,484


(562)


(507)

Income tax paid



(1,785)


(730)


-


-

Interest paid



(198)


(299)


-


-











Net Cash Generated From/(Used In) Operating Activities



8,423


11,455


(562)


(507)





















INVESTING ACTIVITIES










Purchase of property, plant and equipment



(2,870)


(4,529)


-


-

Purchase of other assets



(18)


(18)


-


-

Interest received



267


78


1,550


-











Net Cash (Used In)/Generated From Investing Activities



(2,621)


(4,469)


1,550


-





















FINANCING ACTIVITIES










Proceeds from borrowings



3,346


3,350


-


-

Repayment from borrowings



(2,815)


(4,089)


-


-

Payment of lease liabilities



(1,090)


(877)


-


-











Net Cash Used In Financing Activities



(559)


(1,616)


-


-











NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS



5,243


5,370


988


(507)

EFFECTS OF FOREIGN EXCHANGE RATE CHANGES



(685)


(114)


-


-

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD



10,136


8,214


614


1,353











CASH AND CASH EQUIVALENTS AT END OF THE PERIOD



14,694


13,470


1,602


846











 

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