LONDON (Alliance News) - Steppe Cement Ltd on Friday said its pretax loss narrowed in the first half of 2015 despite revenue taking a hit from the devaluation of the Kazakh tenge against the dollar and lower cement prices.
The construction materials producer in Kazakhstan reported a USD2.3 million pretax loss in the first six months of 2015, narrowing from the USD6.4 million loss reported a year, earlier as revenue dropped to USD44.7 million from USD51.8 million.
Revenue shrunk despite sales volumes increasing to 717,654 tonnes of cement from 709,459 tonnes. Due to the devaluation of the tenge against the dollar, revenue dropped by 14% in dollar terms. In tenge terms, revenue fell 9% year-on-year as average prices declined by around 10% in the period.
Although selling prices fell, Steppe improved its gross margin by 1% compared to last year as its operating costs fell 12% from a year ago. Selling expenses per tonne also dropped by 13% year-on-year.
The overall Kazakh cement market grew by 10% during the first half of 2015, and for the full year Steppe is expecting the Kazakh market to use 9.4 million tonnes of cement, compared to the 8.4 million tonne demand in 2014.
Steppe was not able to fully participate in the market growth, as its market share slipped to 17% at the end of first half from 19% at the end of July 2014.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Steppe Cement (STCM)