REG - Steppe Cement Ltd - Half-year Report
20/09/2024 07:00
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RNS Number : 9658E Steppe Cement Limited 20 September 2024
20 September 2024
Steppe Cement Ltd
("Steppe Cement" or the "Company")
Unaudited Interim Results for the Half Year Ended 30 June 2024 and General
Market Update
Steppe Cement Ltd (AIM: STCM), is pleased to announce its unaudited interim
results for the half year ended 30 June 2024, and a general market update.
A copy of this announcement and the full interim financial statements are
available on the Company's website at (http://www.steppecement.com/)
www.steppecement.com (http://www.steppecement.com/)
(http://www.steppecement.com/)
Unaudited Interim Results
During the six-month period to 30 June 2024 ("H1 2024" or the "Period"), the
Group reported revenue of USD34.4 million, a 7% decrease from USD36.9 million
in the corresponding period in 2023. This decline was mainly attributable to
the 4% reduction in sales volume. Although the first quarter experienced a
significant drop in volume of sales of 18%, this was offset by a 2% increase
in the second quarter of the year, following price adjustments to align with
market conditions. Volume of sales has continued to recover in the third
quarter of 2024, and the price of cement has increased.
6 months ended 6 months ended % change
30 June 2024 30 June 2023
Sales (Tonnes) 719,294 749,034 -4%
Consolidated Turnover (KZT million) 15,435 16,702 -8%
Consolidated Turnover (USD million) 34.4 36.9 -7%
Consolidated (loss)/profit after tax (USD million) (3.5) 0.1 -3,600%
(Loss)/earnings per share (Cents) (1.6) 0.1 -1,700%
Average exchange rate (USD/KZT) 449 454 -1%
The average sales price of cement for the Company was USD48 per tonne
(KZT21,458 per tonne) compared with USD50 per tonne (KZT22,665 per tonne) in
the corresponding period in 2023.
The gross margin decreased to 15% in the six-month period to 30 June 2024
compared with 26% in the same period last year due mostly to the 6% higher
cost in electricity and maintenance in the period to 30 June 2024. Selling
expenses and administration expenses remained constant, across the two
periods, at USD6.1 million and USD3.4 million, respectively.
General inflation in Kazakhstan has eased to 8.4% during the Period.
The Group reported a net loss for the Period of USD3.5 million compared with
USD0.1 million profit after tax in the same period in 2023.
Production and capex
· Cash production costs increased by 6% in KZT in the first half of
2024 as compared to the same period in 2023, primarily due to the higher
electricity, diesel and consumable costs, as the Company changed all
refractories in Line 5 for the first time since its start up. It is expected
that production costs (which exclude depreciation costs) for the year will
increase in line with inflation.
· Production volume of clinker increased by 7% in the first half of
2024 and is continuing to increase in the third quarter of 2024.
· The Company started the production and sale of a mineral powder,
based on limestone. The product is an additive for other industries and allows
the Company to use its spare mill capacity.
· A separator for cement mill number 2 was commissioned.
· Line 5 had an increased capex expenditure in the first half of 2024
as the kiln was completely revamped.
· Line 6 has now stabilised and is capable of producing approximately
2800-3000 tonnes of clinker per day.
Update on the Kazakh cement market
· During the first half of 2024, the Kazakh cement market reduced in
size by 1.6% compared to the same period in 2023.
· The Company expects to maintain or increase its market share at
around 14% for the full financial year ended 31 December 2024.
· Exports of cement from Kazakhstan in the first half of 2024 were
reduced to 0.46 million tonnes compared to 0.55 million tonnes in 2023.
· Imports of cement in the Period represented 3.7% of the local market,
0.5% less than in 2023.
Finance
· Total finance costs for the Period were USD0.6 million, including
interest expenses on bank debt of USD0.4 million, mostly from subsidised
loans. The Company maintained interest expenses on lease liabilities at USD0.2
million following the application of IFRS 16 for the 2-year wagon leases which
were previously classified as selling expenses.
· There is USD0.9 million in advanced income tax payments that is
expected to be offset against future tax liabilities.
· As at 30 June 2024, the Company's borrowings totalled USD5.4 million,
with a cash balance of USD2.0 million therefore net debt of USD3.4 million.
For comparison, as at 30 June 2023 the Company had borrowings of USD6.7
million and a cash balance of USD6.0 million therefore net debt USD0.7
million. The cash was used to fund a reduction and repayment of capital of
USD$4.16m, as announced on 5 April 2024, and to build a higher clinker and
cement inventory, valued at USD5 million as of 30 June 2024.
For further information, please contact:
Steppe Cement Ltd www.steppecement.com (http://www.steppecement.com)
Javier del Ser Pérez, Chief Executive Officer Tel: +(603) 2166 0361
Strand Hanson Ltd (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
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 2024 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June 2024 30 June 2023
Note USD'000 USD'000 USD'000 USD'000
Revenue 7 34,376 36,882 738 683
Cost of sales (29,158) (27,405) - -
Gross profit 5,218 9,477 738 683
Selling expenses (6,138) (6,154) - -
General and administrative
expenses (3,417) (3,421) (199) (176)
Operating (loss)/profit (4,337) (98) 539 507
Interest income 119 93 88 -
Finance costs 8 (614) (483) - -
Net foreign exchange (loss)/gain
(251) (14) (4) 18
Other income, net 641 563 - -
(Loss)/Profit before income tax (4,442) 61 623 525
Income tax credit/(expense) 9 938 (9) - -
(Loss)/Profit for the period (3,504) 52 623 525
Attributable to shareholders
of the Company (3,504) 52 623 525
(Loss)/Earning per share:
Basic and diluted (cents) 10 (1.6) 0.1
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 2024 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June2024 30 June 2023
USD'000 USD'000 USD'000 USD'000
(Loss)/Profit for the period (3,504) 52 623 525
Other comprehensive income/ (loss):
Item that may not be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations
(3,140) 48 - -
Total comprehensive (loss)/ income for the period
(6,644) 100 623 525
Attributable to shareholders
of the Company
(6,644) 100 623 525
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 2024 (UNAUDITED)
The Group The Company
Unaudited Audited Unaudited Audited
30 June 2024 31 Dec 2023 30 June 2024 31 Dec 2023
Note USD'000 USD'000 USD'000 USD'000
Assets
Non-Current Assets
Property, plant and equipment
46,475 50,543 - -
Right-of-use assets 2,551 - - -
Investment in subsidiary companies
- - 36,200 36,200
Loan to subsidiary company
- - 30,010 30,020
Other assets 213 223 - -
Total Non-Current Assets
49,239 50,766 66,210 66,220
Current Assets
Inventories 22,791 28,957 - -
Trade and other receivables
1,609 1,737 894 -
Other assets 2,363 2,853 - -
Income tax receivable 2,945 2,168 - -
Loans and advances to subsidiary companies
- - 66 66
Advances and prepaid expenses
5,485 2,903 24 10
Cash and cash equivalents
2,043 6,435 125 4,624
Total Current Assets 37,236 45,053 1,109 4,700
Total Assets 86,475 95,819 67,319 70,920
(Cont'd)
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 2024 (UNAUDITED)
The Group The Company
Unaudited Audited Unaudited Audited
30 June 2024 31 Dec 2023 30 June 2024 31 Dec 2023
Note USD'000 USD'000 USD'000 USD'000
Equity and Liabilities
Capital and Reserves
Share capital 69,600 73,761 69,600 73,761
Revaluation reserve 1,406 1,516 - -
Translation reserve (128,318) (125,178) - -
Retained earnings /
(Accumulated losses) 117,202 120,596 (2,525) (3,148)
Total Equity 59,890 70,695 67,075 70,613
Non-Current Liabilities
Borrowings 1,714 2,846 - -
Deferred taxes 2,246 3,168 - -
Deferred income 2,381 2,351 - -
Lease Payable 2,735 - - -
Provision for site restoration
193 193 - -
Total Non-Current Liabilities
9,269 8,558 - -
Current liabilities
Trade and other payables
8,253 9,873 - -
Accrued and other liabilities
5,340 2,425 154 163
Amount due to a subsidiary company
- - 90 144
Borrowings 3,687 3,638 - -
Lease liabilities 97 - - -
Deferred income - 195 - -
Taxes payable (61) 435 - -
Total Current Liabilities
17,316 16,566 244 307
Total Liabilities 26,585 25,124 244 307
Total Equity and Liabilities
86,475 95,819 67,319 70,920
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 2024 (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 2024 73,761 1,516 (125,178) 120,596 70,695
Loss for the period - - - (3,504) (3,504)
Other comprehensive (loss) - - (3,140) - (3,140)
Total comprehensive (loss) for the period
Capital Reduction - - (3,140) (3,504) (6,644)
(4,161) - - (4,161)
Transfer of revaluation reserve relating to property, plant and equipment
through use
- (110) - 110 -
As at 30 June 2024 69,600 1,406 (128,318) 117,202 59,890
(Cont'd)
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 2024 (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 1,795 (126,267) 115,791 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 1,749 (126219) 115,889 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 2024 (UNAUDITED)
The Company Share capital Accumulated Total
losses
USD'000 USD'000 USD'000
As at 1 January 2024 73,761 (3,148) 70,613
Total comprehensive income for the period - 623 623
Capital Reduction (4,161) - (4,161)
As at 30 June 2024 69,600 (2,525) 67,075
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
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 2024 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June 2024 30 June 2023
USD'000 USD'000 USD'000 USD'000
OPERATING ACTIVITIES
(Loss)/Profit before income tax (4,442) 61 623 525
Adjustments for:
Depreciation of property,
plant and equipment 2,898 2,837 - -
Depreciation of right-of-use
Assets 3 3 - -
Other non-cash items (2,413) 578 (1,094) (1,088)
Operating Profit/(Loss) Before Working Capital Changes (3,954) 3,479 (471) (563)
(Increase)/Decrease in:
Inventories 5,096 345 - -
Trade and other receivables, advances and prepaid expenses
(1,725) (22) (9) (9)
Loans and advances from subsidiary companies
- - (67) (20)
Increase in:
Trade and other payables, accrued and other liabilities
1,879 3,622 (4,152) 4
Cash Generated From/(Used In) Operations 1,296 7,424 (4,699) (588)
Income tax paid (926) (1,777) - -
Interest paid (224) (483) - -
Net Cash Generated From/(Used In) Operating Activities
146 5,164 (4,699) (588)
(Cont'd)
The Group The Company
6 months ended 6 months ended
30 June 2024 30 June 2023 30 June 2024 30 June 2023
USD'000 USD'000 USD'000 USD'000
INVESTING ACTIVITIES
Purchase of property, plant and equipment
(2,171) (2,721) - -
Purchase of other assets 7 (24) - -
Interest received 119 93 200 -
Net Cash (Used In)/Generated From Investing Activities
(2,045) (2,652) 200 -
FINANCING ACTIVITIES
Proceeds from borrowings 9,629 1,703 - -
Repayment from borrowings (10,752) (1,980) - -
Payment of lease liabilities - (363) - -
Net Cash Used In Financing Activities (1,123) (640)
- -
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
(3,022) 1,872 (4,499) (588)
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES
(1,370) (14)
- -
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
6,435 4,144 4,624 1,240
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD (NOTE 15)
2,043 6,002 125 652
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