REG - Steppe Cement Ltd - Half-year Report
19/09/2023 09:00
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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 6 months ended % of
30 June 2023 30 June 2022 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
(http://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 (http://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 (http://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 (98) 11,509 507 505
Interest income 93 266 - -
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 - - - 52 52
Other comprehensive income - - 48 - 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 Total
losses
USD'000 USD'000 USD'000
As at 1 January 2023 73,761 (4,220) 69,541
Total comprehensive income for the period - 525 525
As at 30 June 2023 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, 2,837 3,203 - -
plant and equipment
Depreciation of right-of-use 3 823 - -
assets
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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