RNS Number : 1446Z
Steppe Cement Limited
16 September 2020
Steppe Cement Ltd
Interim Results for the Half Year ended 30 June 2020
and General Market Update
1. Interim Results
Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD4.1 million for the six months ended 30 June 2020.
6 months ended 30 June 20
6 months ended 30 June 19
% of change
Sales (Tonnes)
764,752
780,315
-2%
Consolidated turnover KZT million
13,677
14,079
-3%
Consolidated turnover (USD Million)
33.8
37.1
-9%
Consolidated profit after tax (USD Million)
4.1
3.1
Earnings per share (Cents)
1.9
1.4
Average exchange rate (USD/KZT)
405
379
-7%
· The Company maintained prices from last summer until the Covid crisis affected the second quarter.
· The average ex-factory price decreased slightly from 15,148 KZT /tonne to 14,727 KZT/tonne or 3% during the period.
· Steppe Cement's gross margin increased from 37% to 40% in USD terms due to cost containment measures.
· Selling expenses per tonne decreased in USD terms by 20% and in KZT by 13% due to distribution in areas closer to the factory and the implementation of IFRS 16 as some of the rental fees for wagons have been transferred to financial leases reducing the transport costs.
· Administrative expenses remained constant in USD.
· The Kazakh Tenge depreciated by 7% compared to the first half of 2019 that translated in a foreign exchange loss of USD 0.6 million.
· The Company generated operating profit before working capital changes of USD 11 million in 1H 2020 against USD 7.9 million in 2019.
· Kazakhstan GDP increased by 2.7% in 1Q2020 but decreased -1.8% in 1H2020 because of Covid-19.
· Reported inflation has been 6.5% up to the end of July 2020.
2. Production costs
· Production costs decreased by 4% in KZT mostly due to the higher production of clinker and lower maintenance and coal costs.
3. Update on the Kazakh cement market
· The Kazakh cement market increased by 2% during the first half of the year. The increase happened mostly in the 1Q while 2Q was slightly below 2019. Steppe Cement currently expects a market of about 9.1 million tonnes for the full year 2020, an increase of 2% over 2019.
· Steppe Cement decreased its local market share from 17% in 1H2019 to 16.5% in 1H2020. We expect to maintain this share for the full year. Exports represented 11% of the volumes in the 1H2020 like last year.
· Imports into Kazakhstan have been reduced to 0.25 million tonnes in 2020 due to the closure of the market to Iranian exports. Imports represent 6% of the market.
· Exports from Kazakhstan have been maintained at 0.87 million tonnes.
· Exports from Kazakhstan represent 18% of local production from 19% last year.
· Overall production of all factories in Kazakhstan has increased by 2% to 4.7 million tonnes for the 1H2020 as closures in the smaller factures were balanced by increased in Kokshe and Gezhuoba.
· Currently 80% of production in the country is manufactured from dry lines.
4. Financing
· Interest expenses on bank debt were reduced to USD 0.41 million from USD 0.55 million in 2019 while we added interest expenses on lease liabilities of USD 0.35 million due to the application of IFRS 16. The rental on those wagons was considered selling expenses before.
· Steppe Cement recorded a net cash position of USD6.4 million compared to net debt of USD1.1 million as of 30 June 2019.
· The borrowings of the Company as of 30 June 2020 were USD3.2 million (USD 2.3 million current and USD 0.9 million long term) while we carried a cash balance of USD 9.6 million. For comparison, on 30 June 2019 we had USD10.1 million in borrowings and USD 9 million in cash.
· The USD loan outstanding to Halyk Bank for the purchase of the wagons and repayable monthly till November 2021 at 6.5% p.a. was subsequently repaid in August 2020 in advance.
· As of 31 August 2020 after paying the dividend, the financial debt was the equivalent of USD 2 million (all denominated in KZT) and the cash was USD 5.7 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
INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2020
(Unaudited)
(In United States Dollars)
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 2020 (UNAUDITED)
The Group
The Company
6 months ended
6 months ended
30 June 2020
30 June 2019
30 June 2020
30 June 2019
USD'000
USD'000
USD'000
USD'000
Revenue
33,786
37,122
701
629
Cost of sales
(20,285)
(23,515)
-
-
Gross profit
13,501
13,607
701
629
Selling expenses
(5,162)
(6,584)
-
-
General and administrative
expenses
(2,566)
(2,563)
(135)
(147)
Operating profit
5,773
4,460
566
482
Interest income
112
147
^
^
Finance costs
(766)
(554)
-
-
Net foreign exchange (loss)/gain
(571)
(36)
3
3
Other income, net
248
148
82
-
Profit before income tax
4,796
4,165
651
485
Income tax expense
(736)
(1,083)
-
-
Profit for the period
4,060
3,082
651
485
Attributable to:
Shareholders of the Company
4,060
3,082
651
485
Earnings per share:
Basic and diluted (cents)
1.9
1.4
^ Insignificant amount.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2020 (UNAUDITED)
The Group
The Company
6 months ended
6 months ended
30 June 2020
30 June 2019
30 June 2020
30 June 2019
USD'000
USD'000
USD'000
USD'000
Profit for the period
4,060
3,082
651
485
Other comprehensive (loss)/income:
Item that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign subsidiary companies
(3,499)
759
-
-
Total other comprehensive (loss)/income for the period
(3,499)
759
-
-
Total comprehensive income for the period
561
3,841
651
485
Attributable to:
Shareholders of the Company
561
3,841
651
485
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020 (UNAUDITED)
The Group
The Company
Unaudited
Audited
Unaudited
Audited
30 June 2020
31 Dec 2019
30 June 2020
31 Dec 2019
USD'000
USD'000
USD'000
USD'000
Assets
Non-Current Assets:
Property, plant and equipment
51,614
55,808
-
-
Right-of-use assets
4,707
6,140
Investment in subsidiary companies
-
-
36,198
26,500
Loan to subsidiary company
-
-
30,140
30,140
Advances
12
6
-
-
Other assets
2,287
2,427
-
-
Total Non-Current Assets
58,620
64,381
66,338
66,338
Current Assets
Inventories
9,668
10,812
-
-
Trade and other receivables
6,173
5,790
9,710
8,848
Lease receivable
12
-
-
-
Income tax receivable
432
405
-
-
Loans and advances to subsidiary companies
-
-
20
30
Advances and prepaid expenses
4,186
3,683
26
16
Cash and cash equivalents
9,567
9,014
68
262
Total Current Assets
30,038
29,704
9,824
6,156
Total Assets
88,658
94,085
76,162
75,494
The Group
The Company
Unaudited
Audited
Unaudited
Audited
30 June 2020
31 Dec 2019
30 June 2020
31 Dec 2019
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
1,859
2,016
-
-
Translation reserve
(116,785)
(113,286)
-
-
Retained earnings
104,603
100,386
2,228
1,577
Total Equity
63,438
62,877
75,989
75,338
Non-Current Liabilities
Borrowings
2,300
3,893
-
-
Lease liabilities
3,147
4,307
-
-
Deferred taxes
4,828
4,652
-
-
Deferred income
1,308
1,421
-
-
Provision for site restoration
75
74
-
-
Total Non-Current Liabilities
11,658
14,347
-
-
Current liabilities
Trade and other payables
4,351
6,204
-
-
Accrued and other liabilities
5,033
1,405
173
156
Borrowings
910
6,420
-
-
Lease liabilities
1,988
2,191
-
-
Deferred income
76
81
-
-
Taxes payable
1,204
560
-
-
Total Current Liabilities
13,562
16,861
173
156
Total Liabilities
25,220
31,208
173
156
Total Equity and Liabilities
88,658
94,085
76,162
75,494
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2020 (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 2020
73,761
2,016
(113,286)
100,386
62,877
Profit for the period
-
-
-
4,060
4,060
Other comprehensive loss
-
-
(3,499)
-
(3,499)
Total comprehensive (loss)/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
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 2019
73,761
2,349
(116,266)
96,113
55,957
Profit for the period
-
-
-
3,082
3,082
Other comprehensive income
-
-
759
-
759
Total comprehensive income for the period
-
-
759
3,082
3,841
Dividend payable
-
-
-
(8,362)
(8,362)
Transfer of revaluation reserve relating to the depreciation of property, plant and equipment through use
-
(167)
-
167
-
Balance as at 30 June 2019
73,761
2,182
(115,507)
91,000
51,436
The Company
Share capital
Retained earnings/
Total
Accumulated losses
USD'000
USD'000
USD'000
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
Balance as at 1 January 2019
73,761
399
74,160
Total comprehensive loss for the period
-
485
485
Dividend payable
-
(8,362)
(8,362)
Balance as at 30 June 2019
73,761
(7,478)
66,283
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2020 (UNAUDITED)
The Group
The Company
6 months ended
6 months ended
30 June 2020
30 June 2019
30 June 2020
30 June 2019
USD'000
USD'000
USD'000
USD'000
OPERATING ACTIVITIES
Profit before income tax
4,796
4,165
651
485
Adjustments for:
Depreciation of property, plant and equipment
3,559
3,355
-
-
Depreciation of right-of-use assets
1,446
-
-
-
Adjustments for non-cash items
3,530
358
(329)
(631)
Operating Profit/(Loss) Before Working Capital Changes
10,993
7,878
322
(146)
(Increase)/ Decrease in:
Inventories
541
1,531
-
-
Trade and other receivables,
(1,411)
(3,401)
(430)
(430)
advances and prepaid expenses
Loans and advances from subsidiary companies
-
-
10
(27)
Increase in:
Trade and other payables,
2,251
1,517
16
34
accrued and other liabilities
Cash Generated From/(Used In) Operations
12,374
7,525
(524)
(569)
Income tax paid
(185)
(85)
-
-
Interest paid
(580)
(420)
-
-
Net Cash Generated From/(Used In) Operating Activities
11,609
7,020
(524)
(569)
INVESTING ACTIVITIES
Purchase of property, plant and equipment
(2,644)
(844)
-
-
Purchase of other assets
-
(29)
-
-
Interest received
112
147
330
629
Net Cash (Used In)/Generated From Investing Activities
(2,532)
(726)
330
629
FINANCING ACTIVITIES
Proceeds from borrowings
2,098
4,515
-
-
Repayment from borrowings
(9,003)
(5,805)
-
-
Payment of lease liabilities
(1,133)
-
-
-
Net Cash Used In Financing Activities
(8,038)
(1,290)
-
-
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
1,039
5,004
(194)
60
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES
(486)
54
-
-
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
9,014
5,719
262
23
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
9,567
10,777
68
83
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR GPUPUBUPUUCQ
