RNS Number : 9106M
Steppe Cement Limited
19 September 2023
 

19 September 2023

 

 

Steppe Cement Limited

("Steppe Cement" or the "Company")

Interim Results for the Half Year Ended 30 June 2023 and General Market Update

 

 

1. Interim Results

During the six-month period to 30 June 2023, the Group posted revenue of USD36.9 million, a decline of 14% from USD43.1 million in the corresponding period in 2022. The decline was mainly attributable to the 11% lower sales volume. The drop was concentrated in the first few months of the year when cement prices were maintained. Consequently the Company decided to adjust pricing to recover the volumes. 

 


6 months ended

30 June 2023

6 months ended

30 June 2022

% of

 change

Sales (Tonnes)

   749,034

      837,063

            -11%

Consolidated Turnover (KZT million)

     16,702

        19,779

            -16%

Consolidated Turnover (USD million)

         36.9

           43.1

            -14%

Consolidated profit after tax (USD million)

           0.1

           10.2

            -99%

Earnings per share (Cents)

           0.1

             4.7

            -99%

Average exchange rate (USD/KZT)

          454

            449

               1%

 

The average sales price was USD50 (KZT22,665) per tonne compared with USD52 (KZT23,391) per tonne in the corresponding period in 2022.

 

The gross margin was reduced to 26% in the six-month period to 30 June 2023 compared with 46% in the same period last year due to the combination of higher production costs, lower volumes and  a lower selling price. Selling expenses increased by USD0.9 million or 16% to USD6.2 million, while general and administration expenses increased 7% by USD0.2 million to USD3.4 million.

Volumes are recovering in the second half of the current year and prices have been slightly increased, while the cost of production is improving as well.

General inflation in Kazakhstan was 17% during the period, but the situation has improved in the second half of 2023.

 

The Group posted a small net profit for the period of USD0.1 million compared with USD10.2 million profit after tax in the same period in 2022.

 

 

2. Production and capex

·    Cash production costs increased by 11% in KZT in the first half of 2023 primarily due to the higher electricity, diesel and spare parts for maintenance costs together with lower production volumes and significant repairs in line 5.

·    There were significant stoppages and repairs in the first half of 2023 as a consequence of the unexpectedly cold weather during the general stoppage of November 2022.

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

the separator of cement mill number 2. Together these two projects will allow the increase of slag usage, reduce power consumption and improve cement quality and stability.

 

 

 

 

3. Update on the Kazakh cement market

·    The Kazakh cement market during the first half of 2023 reduced by 5.6% compared to the same period last year.

·    The Company expects to maintain its market share at around 14% for the full year.

·    Exports from Kazakhstan [in the first half of 2023] remained the same as in the corresponding period in 2022 at 0.55 million tonnes.

·    Imports in the current period represented 4.3% of the local market, 2% less than in 2022.

 

4. Finance

·    Total finance costs for the period were USD 0.5 million with interest expenses on bank debt falling to USD 0.2 million mostly on subsidised loans while the Company maintained interest expenses on lease liabilities at USD 0.1 million after 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 the second half of 2023.

·    The borrowings of the Company as at 30 June 2023 were USD6.7 million while we

carried a cash balance of USD6.0 million. For comparison, on 30 June 2022 the

Company had USD5.4 million of borrowings and USD14.7 million in cash.

 

 

 

A pdf copy of the announcement and the full interim financial statements is available on the company's website at www.steppecement.com

 

 

 

For further information, please contact:

Steppe Cement Limited

www.steppecement.com

Javier del Ser Pérez, Chief Executive Officer

Tel: +(603) 2166 0361



Strand Hanson Limited (Nominated & Financial Adviser and Broker)

www.strandhanson.co.uk

James Spinney / Ritchie Balmer / Robert Collins

Tel: +44 20 7409 3494

 

                                                                                                                      

 

 

 

 

 

 

 

 

 

 



   SUMMARY OF INTERIM FINANCIAL STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2023 (UNAUDITED)

                        (In United States Dollars)

 

 

The Notes to the Interim Financial Statements form an integral part of the Condensed Financial Statement. 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 2023 (UNAUDITED)

 

 



 

The Group

 

The Company



 

6 months ended

 

6 months ended



 

30 June 2023

 

30 June 2022

 

30 June 2023

 

30 June 2022



 

USD'000

 

USD'000

 

USD'000

 

USD'000











Revenue



36,882


43,125


683


670











Cost of sales



(27,405)


(23,148)


-


-











Gross profit



9,477


19,977


683


670











Selling expenses



(6,154)


(5,285)


-


-











General and administrative










expenses



(3,421)


(3,183)


(176)


(165)











Operating (loss)/profit

 

Interest income



(98)

 

93


11,509

 

266


   507

 

-


505

 

-

Finance costs



(483)


(435)


-


-

Net foreign exchange     (loss)/gain



 

(14)


 

(246)


 

18


 

3

Other income, net



563


940


-


-











Profit before income tax



61


12,034


525


508











Income tax expense



(9)


(1,831)


-


-











Profit for the period



52


10,203


525


508











Attributable to shareholders










of the Company



52


10,203


525


508











Earning per share:




















Basic and diluted (cents)



0.1


4.7





 

 

 



 

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 2023 (UNAUDITED)

 

 

 



The Group

 

The Company




6 months ended

 

6 months ended




30 June 2023

 

30 June 2022

 

30 June 2023

 

 30 June 2022




USD'000

 

USD'000

 

USD'000

 

USD'000












 

Profit for the period


52


10,203


525


508


 











 

Other comprehensive income/ (loss):










 

 

Item that may not be reclassified subsequently to profit or loss










 

 

Exchange differences arising on translation of foreign operations


 

 

 

 

48


 

 

 

 

(4,941)


 

 

 

 

-


 

 

 

 

-


 











 

Total comprehensive income for the period


 

100


 

5,262


 

525


 

508


 











 

Attributable to shareholders










 

of the Company


 

100


 

5,262


 

525


 

508


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 2023 (UNAUDITED)

 

 

 

 

 

 

The Group

 

The Company

 

 

 

 

Unaudited

 

Audited

 

Unaudited

 

Audited

 

 

 

 

30 June 2023

 

31 Dec 2022

 

30 June 2023

 

31 Dec 2022

 

 

 

 

USD'000

 

USD'000

 

USD'000

 

USD'000

Assets











Non-Current Assets











Property, plant and equipment



 

 

 

49,822


 

49,362


 

-


 

-

Right-of-use assets




3


5


-


-

Investment in subsidiary companies




 

-


 

-


 

36,200


 

36,200

Loan to subsidiary company




 

-


 

-


 

30,040


 

30,050

Other assets




196


1,531


-


-












Total Non-Current Assets




 

50,021


 

50,898


 

66,240


 

66,250












Current Assets











Inventories




21,190


20,646


-


-

Trade and other receivables



 

 

 

1,938


 

2,045


 

3,461


 

2,372

Other assets




2,409


1,082


-


-

Income tax receivable




1,421


603


-


-

Loans and advances to subsidiary companies




 

-


 

-


 

60


 

60

Advances and prepaid expenses




 

8,687


 

8,577


 

16


 

7

Cash and cash equivalents



 

 

 

6,002


 

4,144


 

652


 

1,240












Total Current Assets




41,647


37,097


4,189


3,679












Total Assets




91,668


87,995


70,429


69,929

 

 



 

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 2023 (UNAUDITED)




The Group

 

The Company

 




Unaudited

 

Audited

 

 Unaudited

 

Audited

 




30 June 2023

 

31 Dec 2022

 

30 June 2023

 

31 Dec 2022

 



 

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



1,747


1,793


-


-


Translation reserve



(125,804)


(125,852)


-


-


Retained earnings /

(Accumulated losses)



 

115,476


 

115,378


 

(3,695)


 

(4,220)


 

Total Equity



 

65,180


 

65,080


 

70,066


 

69,541













Non-Current Liabilities











Borrowings



5,104


3,914


-


-


Deferred taxes



2,460


3,267


-


-


Deferred income



2,700


2,713


-


-


Provision for site restoration



 

182


 

178


 

-


 

-













Total Non-Current Liabilities



 

10,446


 

10,072


 

-


 

-













Current liabilities











Trade and other payables



 

10,402


 

7,348


 

-


 

-


Accrued and other liabilities



 

3,568


 

2,251


 

148


 

144


Amount due to a subsidiary company



 

-


 

-


 

215


 

244


Borrowings



1,651


2,814


-


-


Lease liabilities



421


59


-


-


Taxes payable



-


371


-


-













Total Current Liabilities



 

16,042


 

12,843


 

363


 

388













Total Liabilities



26,488


22,915


363


388


 











Total Equity and Liabilities



 

91,668


 

87,995


 

70,429


 

69,929


 


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 2023 (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












As at 1 January 2023

73,761


1,793


(125,852)



115,378


65,080

Profit for the period

Other comprehensive income

-

-


-

-


-

48



52

-


52

48

Total comprehensive income for the period

 

-


 

-


 

48



 

52


 

100

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

 

 

-


 

 

(46)


 

 

-



 

 

46


 

 

-












As at 30 June 2023

73,761


1,747


(125,804)



115,476


65,180

 



 

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 2023 (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












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 (loss)/income for the period

 

-


 

-


 

(4,941)



 

10,203


 

5,262

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

 

 

-


 

 

(137)


 

 

-



 

 

137


 

 

-












As at 30 June 2022

73,761


1,931


(125,379)



120,530


70,843



 

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 2023 (UNAUDITED)

 

  

 

 

 

 

 

 

The Company

Share capital

 

Accumulated

losses

 

 

Total


USD'000

 

USD'000

 

USD'000






73,761



(4,220)


69,541

-



525


525








73,761



(3,695)


70,066


As at 1 January 2022

73,761



(5,606)


68,155

Total comprehensive income for the period

-



508


508








As at 30 June 2022

73,761



(5,098)


68,663

 

       


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 2023 (UNAUDITED)

 




The Group

 

The Company


 




6 months ended

 

6 months ended


 




30 June 2023

 

30 June 2022

 

30 June 2023

 

30 June 2022


 




USD'000

 

USD'000

 

USD'000

 

USD'000


 

 











 

OPERATING ACTIVITIES











 

Profit before income tax



61


12,034


525


508


 

Adjustments for:

 











Depreciation of property,

 plant and equipment



2,837


3,203


-


-


Depreciation of right-of-use

 assets



 3


823


-


-


Other non-cash items



               578


218


(1,088)


(1,090)













Operating Profit/(Loss) Before Working Capital Changes



3,479


16,278


(563)


(582)













 

(Increase)/Decrease in:











 

Inventories



345


(2,922)


-


-


 

Trade and other receivables, advances and prepaid expenses



(22)


(6,444)


(9)


(12)


 

Loans and advances from subsidiary companies



 

-


 

-


 

(20)


 

(24)


 












 

Increase in:











 

Trade and other payables, accrued and other liabilities



 

3,622


 

3,494


 

4


 

56


 












 

Cash Generated From/(Used In) Operations



7,424


10,406


(588)


(562)


 

Income tax paid



(1,777)


(1,785)


-


-


 

Interest paid



(483)


(198)


-


-


 












 

Net Cash Generated From/(Used In) Operating Activities



 

5,164


 

8,423


 

(588)


 

(562)


 












 












 



 

 




The Group

 

The Company





6 months ended

 

6 months ended





30 June 2023

 

30 June 2022

 

30 June 2023

 

30 June 2022





USD'000

 

USD'000

 

USD'000

 

USD'000


INVESTING ACTIVITIES











Purchase of property, plant and equipment



 

(2,721)


 

(2,870)


 

-


 

-


Purchase of other assets



(24)


(18)


-


-


Interest received



93


267


-


1,550













Net Cash (Used In)/Generated From Investing Activities



 

(2,652)


 

(2,621)


 

-


 

1,550
























FINANCING ACTIVITIES











Proceeds from borrowings



1,703


3,346


-


-


Repayment from borrowings



(1,980)


(2,815)


-


-


Payment of lease liabilities



(363)


(1,090)


-


-













Net Cash Used In Financing Activities



 

(640)


 

(559)


 

-


 

-













NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS



 

1,872


 

5,243


 

(588)


 

988


EFFECTS OF FOREIGN EXCHANGE RATE CHANGES



 

 

(14)


 

 

(685)


 

 

-


 

 

-


CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD



 

 

 

4,144


 

 

 

10,136


 

 

 

1,240


 

 

 

614


 











CASH AND CASH EQUIVALENTS AT END OF THE PERIOD



 

 

6,002


 

 

14,694


 

 

652


 

 

1,602













 

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