19 Sep 2023 09:00
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 30 June 2023 | 6 months ended 30 June 2022 | % of 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
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 |
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 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
Interest income | (98)
93 | 11,509
266 | 507
- | 505
- | |||||
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 Other comprehensive income | - - | - - | - 48 | 52 - | 52 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 losses
|
| Total | ||
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, plant and equipment | 2,837 | 3,203 | - | - | ||||||||
Depreciation of right-of-use assets | 3 | 823 | - | - | ||||||||
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 | ||||||
Steppe Cement (STCM)