REG - Steppe Cement Ltd - Interim Results

Steppe CementAnnouncement

18/09/2018 07:05

RNS Number : 0518B
Steppe Cement Limited
18 September 2018
 


 
 
 
Steppe Cement Ltd
Interim Results for the Half Year 30 June 2018
and General Market Update
 
1. Interim Results
Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD0.2 million for the six months ended 30 June 2018.
 




 


6 months
ended
30 June 18


6 months
ended
30 June 17


% of change




Sales (Tonnes)


738,228


650,333


14%




Consolidated turnover KZT million


10,539


8,553


23%




Consolidated turnover (USD Million)


32.8


26.8


22%




Consolidated profit (loss) after tax (USD Million)


0.2


(0.3)


 




Profit (loss) per share (Cents)


0.1


(0.2)


 




Average exchange rate (USD/KZT)


326


319


 




 
·     The Company continued its strategy of focusing on price rather than in volume until the summer.
·     The average ex-factory price increased from 11,147 KZT /tonne to 11,560 KZT /tonne or 4% during the period.
·     Steppe Cement's gross margin increased from 27% to 32% in USD terms mostly because of better pricing in markets further from the factory.
·     Selling expenses increased as sales to the south and exports grew significantly.
·     Administrative expenses were maintained relative to turnover and were increased compared to 2017 due to bonus payment.
·     The Kazakh Tenge depreciated slightly in the first half by 2% compared to the first half of 2017. The company booked foreign exchange losses of USD 0.5 million in the first half of 2018 compared to a gain of USD 0.57 million in 1H2017.
·     The company generated operating profit before working capital changes of USD 5.4 million in 1H 2018 against USD 4.9 million in 2017.
·     The Kazakhstan economy grew at 4.1% in the first half 2018.
·     Reported inflation has been 2.9% until the end of August 2018.

 
2. Production costs
·     Cement production costs per tonne were maintained in KZT as inflation was offset by the higher volumes achieved.

 
3. Update on the Kazakh cement market
·     The Kazakh cement market grew at 5% during the first half of the year. Steppe Cement expects a market of about 9 million tonnes for the full year 2018 similar to 2017.
·     Steppe Cement increased its local market share from 14.5% in 1H2017 to 15.5% in 1H2018. We expect to achieve 17% for the full year. Exports represented 12% of the volumes in the 1H2018 from 10% last year.
·     Imports into Kazakhstan have increased by 30% in 2018 to 0.34 million tonnes and they represent 8% of the market up from 6% last year.
·     Exports from Kazakhstan have increased from 0.45 million tonnes to 0.92 million tonnes in the first half of 2018, mostly due to demand from Uzbekistan.
·     Exports from Kazakhstan now represent 19% of local production up from 11% last year.
·     Overall production of all factories in Kazakhstan has increased by 14% to 4.8 million tonnes for the 1H2018. This increase will most likely not be maintained in the second half.
·    Currently 78% of production in the country is coming from dry lines, an increase of 4% compared to last year's level.
·     Construction remains strong particularly in the west and south of the country.
 
4. Financing
The debt position of the company as of 30 June 2018 comprised:
·     A capital loan of USD 4 million from Halyk bank at 6% p.a. interest due in 2019.
·     A long-term USD 7 million loan from Halyk Bank for the purchase of the wagons and repayable monthly till November 2021 at 6.5% p.a. and secured with the pledge of the wagons.
·     Loans of KZT1,688 million and KZT 580 million from Halyk Bank JSC subsidised by the government for capital investment at 6%.
·     We have maintained KZT3.9 billion of available working capital lines from Halyk Bank, Altyn Bank and VTB Bank. The current rates are 6% p.a. in USD and 12% p.a. in KZT.

As of 30 June 2018 we had the equivalent of USD 2.7 million outstanding from these working capital loans.
·     As of 31 August 2018, the first Halyk bank loan of USD 4 million had been repaid and the working capital lines reimbursed. The total bank debt net of cash amounted to USD11 million of which 64% is denominated in USD and the balance in KZT.
 
 
The following are the unaudited condensed consolidated statements of profit and loss, comprehensive income, financial position, changes in equity and cash flows. A copy of 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 94802500.
Broker: Contact Charlie Cryer at +44 20 3440 6800
 
SUMMARY OF INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2018 (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 2018 (UNAUDITED)
 
 




 


 


The Group


 


The Company




 


 


6 months ended


 


6 months ended




 


 


30 June 2018


 


30 June 2017


 


30 June 2018


 


30 June 2017




 


 


USD'000


 


USD'000


 


USD'000


 


USD'000




 


 


 


 


 


 


 


 


 




Revenue


 


32,838


 


26,839


 


50


 


50




 


 


 


 


 


 


 


 


 




Cost of sales


 


(22,114)


 


(20,050)


 


-


 


-




 


 


 


 


 


 


 


 


 




Gross profit


 


10,724


 


6,789


 


50


 


50




 


 


 


 


 


 


 


 


 




Selling expenses


 


(6,450)


 


(4,145)


 


-


 


-




 


 


 


 


 


 


 


 


 




General and administrative


 


 


 


 


 


 


 


 




expenses


 


(2,838)


 


(2,195)


 


(145)


 


(138)




 


 


 


 


 


 


 


 


 




Operating profit/(loss)


 


1,436


 


449


 


(95)


 


(88)




Interest income


 


15


 


16


 


^


 


^




Finance costs


 


(942)


 


(1,310)


 


-


 


-




Net foreign exchange (loss)/gain


 


(500)


 


572


 


21


 


47




Other income, net


 


396


 


278


 


-


 


-




 


 


 


 


 


 


 


 


 




Profit/(Loss) before income tax


 


405


 


5


 


(74)


 


(135)




 


 


 


 


 


 


 


 


 




Income tax expense


 


(199)


 


(346)


 


(2)


 


-




 


 


 


 


 


 


 


 


 




Profit/(Loss) for the period


 


206


 


(341)


 


(76)


 


(135)




 


 


 


 


 


 


 


 


 




Attributable to:


 


 


 


 


 


 


 


 




Shareholders of the Company


 


206


 


(341)


 


(76)


 


(135)




 


 


 


 


 


 


 


 


 




Profit/(Loss) per share:


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




Basic and diluted (cents)


 


0.1


 


(0.2)


 


 


 


 




 
^ Insignificant amount.
 
 
 
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2018 (UNAUDITED)
 
 
 
 




 


 


The Group


 


The Company


 




 


 


6 months ended


 


6 months ended


 




 


 


30 June 2018


 


30 June 2017


 


30 June 2018


 


30 June 2017


 




 


 


USD'000


 


USD'000


 


USD'000


 


USD'000


 




 


 


 


 


 


 


 


 


 


 




Profit/(Loss) for the period


 


206


 


(341)


 


(76)


 


(135)


 




 


 


 


 


 


 


 


 


 


 




Other comprehensive (loss)/income:


 


 


 


 


 


 


 


 


 




Item that may be reclassified subsequently to profit or loss


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 




Exchange differences arising on translation of foreign subsidiary companies


 


(1,756)


 


2,453


 


-


 


-


 




 


 


 


 


 


 


 


 


 


 




Total other comprehensive income for the period


 


(1,756)


 


2,453


 


-


 


-


 




 


 


 


 


 


 


 


 


 


 




Total comprehensive (loss)/income for the period


 


(1,550)


 


2,112


 


(76)


 


(135)


 




 


 


 


 


 


 


 


 


 


 




Attributable to:


 


 


 


 


 


 


 


 


 




Shareholders of the Company


 


(1,550)


 


2,112


 


(76)


 


(135)


 




 
 
 
 
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018 (UNAUDITED)
 
 




 


 


     The Group


 


The Company




 


 


 


Unaudited


 


Audited


 


Unaudited


 


Audited




 


 


 


30 June 2018


 


31 Dec 2017


 


30 June 2018


 


31 Dec 2017




 


 


 


USD'000


 


USD'000


 


USD'000


 


USD'000




Assets


 


 


 


 


 


 


 


 


 




Non-Current Assets:


 


 


 


 


 


 


 


 


 




Property, plant and equipment


 


 


64,597


 


67,358


 


-


 


-




Investment in subsidiary companies


 


 


-


 


-


 


26,500


 


26,500




Advances and prepaid expenses


 


 


226


 


509


 


-


 


-




Other assets


 


 


537


 


1,248


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Total Non-Current Assets


 


 


65,360


 


69,115


 


26,500


 


26,500




 


 


 


 


 


 


 


 


 


 




Current Assets


 


 


 


 


 


 


 


 


 




Inventories


 


 


14,016


 


13,014


 


-


 


-




Trade and other receivables


 


 


5,469


 


3,102


 


3,435


 


3,435




Income tax receivable


 


 


179


 


127


 


-


 


-




Loans and advances to subsidiary companies


 


 


-


 


-


 


39,467


 


39,605




Advances and prepaid expenses


 


 


3,707


 


3,477


 


19


 


9




Cash and cash equivalents


 


 


3,654


 


3,045


 


90


 


13




 


 


 


 


 


 


 


 


 


 




Total Current Assets


 


 


27,025


 


22,765


 


43,011


 


43,060




 


 


 


 


 


 


 


 


 


 




Total Assets


 


 


92,385


 


91,880


 


69,511


 


69,560




 
 




 


 


            The Group


 


The Company




 


 


 


Unaudited


 


Audited


 


Unaudited


 


Audited




 


 


 


30 June 2018


 


31 Dec 2017


 


30 June 2018


 


31 Dec 2017




 


 


 


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


 


 


2,494


 


2,680


 


-


 


-




Translation reserve


 


 


(108,497)


 


(106,741)


 


-


 


-




Retained earnings/ (Accumulated loss)


 


 


87,318


 


89,817


 


(8,242)


 


(5,275)




 


 


 


 


 


 


 


 


 


 




Total Equity


 


 


55,076


 


59,517


 


65,519


 


68,486




 


 


 


 


 


 


 


 


 


 




Non-Current Liabilities


 


 


 


 


 


 


 


 


 




Borrowings


 


 


9,013


 


9,835


 


-


 


-




Deferred taxes


 


 


794


 


638


 


-


 


-




Deferred income


 


 


1,866


 


1,519


 


-


 


-




Provision for site restoration


 


 


69


 


67


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Total Non-Current Liabilities


 


 


11,742


 


12,059


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 


 


 




Trade and other payables


 


 


9,583


 


7,684


 


2,891


 


-




Accrued and other liabilities


 


 


6,147


 


2,229


 


1,094


 


1,069




Borrowings


 


 


8,759


 


10,195


 


-


 


-




Taxes payable


 


 


1,078


 


196


 


7


 


5




 


 


 


 


 


 


 


 


 


 




Total Current Liabilities


 


 


25,567


 


20,304


 


3,992


 


1,074




 


 


 


 


 


 


 


 


 


 




Total Liabilities


 


 


37,309


 


32,363


 


3,992


 


1,074




 


 


 


 


 


 


 


 


 


 




Total Equity and Liabilities


 


 


92,385


 


91,880


 


69,511


 


69,560





 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2018 (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 2018


73,761


 


2,680


 


(106,741)


 


89,817


 


59,517




Profit for the period


-


 


-


 


-


 


206


 


206




Other comprehensive loss


-


 


-


 


(1,756)


 


-


 


(1,756)




Total comprehensive (loss)/income for the period


-


 


-


 


(1,756)


 


206


 


(1,550)




Dividend payable


-


 


-


 


-


 


(2,891)


 


(2,891)




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


-


 


(186)


 


-


 


186


 


-




 


 


 


 


 


 


 


 


 


 




Balance as at 30 June 2018


73,761


 


2,494


 


(108,497)


 


87,318


 


55,076




 
 
 
 




 


 


 


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 2017


73,761


 


3,062


 


(106,985)


 


88,203


 


58,041




Loss for the period


-


 


-


 


-


 


(341)


 


(341)




Other comprehensive income


-


 


-


 


2,453


 


-


 


2,453




Total comprehensive income/(loss) for the period


-


 


-


 


2,453


 


(341)


 


2,112




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


-


 


(197)


 


-


 


197


 


-




 


 


 


 


 


 


 


 


 


 




Balance as at 30 June 2017


73,761


 


2,865


 


(104,532)


 


88,059


 


60,153




 
 
 
 




 


 


 


 


 


 




The Company


Share capital


 


Accumulated losses


 


Total




 


USD'000


 


USD'000


 


USD'000




 


 


 


 


 


 




Balance as at 1 January 2018


73,761


 


(5,275)


 


68,486




Total comprehensive loss for the period


-


 


(76)


 


(76)




Dividend payable


-


 


(2,891)


 


(2,891)




Balance as at 30 June 2018


73,761


 


(8,242)


 


65,519




 


 


 


 


 


 




Balance as at 1 January 2017


73,761


 


(8,454)


 


65,307




Total comprehensive loss for the period


-


 


(135)


 


(135)




Balance as at 30 June 2017


73,761


 


(8,589)


 


65,172




 
 
          

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2018 (UNAUDITED)
 
 




 


 


 


The Group


 


The Company




 


 


 


6 months ended


 


6 months ended




 


 


 


30 June 2018


 


30 June 2017


 


30 June 2018


 


30 June 2017




 


 


 


USD'000


 


USD'000


 


USD'000


 


USD'000




 


 


 


 


 


 


 


 


 


 




OPERATING ACTIVITIES


 


 


 


 


 


 


 


 


 




Profit/(Loss) before income tax


 


 


405


 


5


 


(73)


 


(135)




Adjustments for non-cash items


 


 


4,870


 


4,898


 


(21)


 


47




 


 


 


 


 


 


 


 


 


 




Operating Profit/(Loss) Before Working Capital Changes


 


 


5,275


 


4,903


 


(94)


 


(88)




 


 


 


 


 


 


 


 


 


 




(Increase)/ Decrease in:


 


 


 


 


 


 


 


 


 




Inventories


 


 


(1,309)


 


(1,741)


 


-


 


-




Trade and other receivables,


 


 


(2,169)


 


(2,878)


 


(12)


 


(11)




advances and prepaid expenses


 


 


 


 


 


 


 


 


 




Loans and advances to subsidiary companies


 


 


-


 


-


 


-


 


88




Increase/(Decrease) in:


 


 


 


 


 


 


 


 


 




Trade and other payables,


 


 


4,038


 


1,234


 


45


 


67




accrued and other liabilities


 


 


 


 


 


 


 


 


 




Loans and advances to subsidiary companies


 


 


-


 


-


 


138


 


-




 


 


 


 


 


 


 


 


 


 




Cash Generated From Operations


 


 


5,835


 


1,518


 


77


 


56




Income tax paid


 


 


-


 


(51)


 


-


 


-




Interest paid


 


 


(947)


 


(1,303)


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Net Cash Generated From  Operating Activities


 


 


4,888


 


164


 


77


 


56




 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 




INVESTING ACTIVITIES


 


 


 


 


 


 


 


 


 




Purchase of property, plant and equipment


 


 


(2,437)


 


(740)


 


-


 


-




Purchase of other assets


 


 


(28)


 


(32)


 


-


 


-




Interest received


 


 


15


 


16


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Net Cash Used In Investing Activities


 


 


(2,450)


 


(756)


 


-


 


-




 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 




FINANCING ACTIVITIES


 


 


 


 


 


 


 


 


 




Proceeds from borrowings


 


 


7,253


 


13,611


 


-


 


-




Repayment from borrowings


 


 


(9,013)


 


(12,319)


 


-


 


-




 


 


 


 


 


 


 


 


 


 




Net Cash (Used In)/Generated From Financing Activities


 


 


(1,760)


 


1,292


 


-


 


-




 


 


 


 


 


 


 


 


 


 




NET INCREASE IN CASH AND CASH EQUIVALENTS


 


 


678


 


700


 


77


 


56




EFFECTS OF FOREIGN EXCHANGE RATE CHANGES


 


 


(69)


 


30


 


-


 


-




CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD


 


 


3,045


 


1,023


 


13


 


74




 


 


 


 


 


 


 


 


 


 




CASH AND CASH EQUIVALENTS AT END OF THE PERIOD


 


 


3,654


 


1,753


 


90


 


130




 


 


 


 


 


 


 


 


 


 




 




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