TIDMSTCM
RNS Number : 2006C
Steppe Cement Limited
09 June 2023
9 June 2023
Steppe Cement Ltd
CEO STATEMENT
Overall, the cement market in Kazakhstan remained stable in 2022
compared with the historical high achieved during 2021 and on a per
capital level, the consumption for the 2022 year of 630 kg per
capita is consistent with that which should be expected based on
actual GDP and the anticipated GDP growth rate.
The Kazak cement market remained stable at 11.6 million tonnes ,
with sales volume by Steppe Cement decreasing by 1% year on year,
due mostly to logistical problems in the railway system in the
third and fourth quarters. The blend of this was that domesticl
sales increased by 4% and exports reduced to virtually zero .
Imports into Kazakshtan decreased by 25% to 0.6 million tonnes,
being equivalent to 5% of the total market, with these coming
mostly from Russia. Exports from local producers decreased again by
33% to 1.1 million tonnes, with these being mostly to Uzbekistan
and Kyrgystan as new capacity has been commisioned in Uzbekistan.
Exports remain concentrated to the Tashkent and Bishkek areas.
The market demand in 2023 has shown a decrease in the first
quarter due to weather conditions, logistics and persistant high
inflation and we expect the market to improve in the coming
quarters. High interest rates will slow down the mortgage market
but the economy remains strong driven by commodities.
During 2021 and 2022 the government implemented incentives which
helped the construction industry, particularly the ability to
withdraw part of the individual pension funds and use them for real
estate acquisitions. The development of the main cities continues,
and the rate of urbanization is estimated to grow from the current
59% to 69% in the next 25 years. The banks are actively promoting
long term mortgages and the program has been very successful.
The political unrest at the beginning of 2022 as well as the
conflict in Ukraine have brought higher inflation and more populist
policies. After a phase of salary increases to compensate for
inflation, the government seems to be committed to lowering
inflation.
In 2022, Steppe Cement posted a net profit of USD17.9 million
while EBITDA remained stable at USD31 million. Higher pricing
compensated for the increase in costs and slightly lower volumes.
Steppe Cement's average cement selling prices increased by 12% in
KZT and 4% in USD, to USD52 per tonne delivered.
Steppe Cement operated both lines at 86% of their current
combined capacity (which is 1.1 million tonnes for line 5 and 0.85
million tonnes for line 6).
Shareholders' funds remained stable at USD65.1 million after the
dividend distribution USD12.6 million to shareholders (5 UK pence
per share).
Key financials Year ended Year ended Inc/(Dec)%
31- Dec-22 31- Dec-21
Sales (tonnes of cement) 1,670,174 1,688,544 (1%)
------------ ------------ -----------
Consolidated turnover (KZT million) 40,023 36,020 11%
------------ ------------ -----------
Consolidated turnover (USD million) 86.7 84.6 3%
------------ ------------ -----------
Consolidated profit before tax
(USD million) 21.7 21.4 1%
------------ ------------ -----------
Consolidated profit after tax
(USD million) 17.9 17.1 5%
------------ ------------ -----------
Profit per share (US cents) 8.2 7.8 5%
------------ ------------ -----------
Shareholders' funds (USD million) 65.1 65.6 (1%)
------------ ------------ -----------
Average exchange rate (KZT/USD) 461 426 (8%)
------------ ------------ -----------
Exchange rate as at year end
(KZT/USD) 462 434 (6%)
------------ ------------ -----------
Production and costs
Line 5 produced 60% 995,933 tonnes of cement while Line 6
produced 663,955 tonnes.
Line 5 performed at 90% capacity as it was limited by roller
maintenance while Line 6 was limited by reliability. In 2023 we
expect higher production from Line 6 and similar in Line 5.
Cost per tonne increased by 20% in KZT at slightly higher pace
than inflation. The average cash production cost of clinker
increased from USD20/tonne to USD23/tonne while cement cash cost
increased from USD23/tonne to USD26/tonne in 2022. The cost of
production increased by 20% in local currency in line with
inflation of 18.8% year on year. The devaluation of the currency
was limited to 8%.
Despite the increase of transportation costs, selling expenses,
reflecting mostly cement delivery costs, were reduced to
USD6.6/tonne as we focused in markets closer to the factory.
General and administrative expenses we reduced to USD6.4 million
from USD6.7 million in 2021 due to cost control measures.
On 31 March 2023 the company had 799 employees a similar level
to 2022.
In 2022, finance costs remained stable at USD 1 million. Without
operating lease interest of USD0.2 million under IFRS 16, the
finance cost was USD0.8 million, mostly interest on loans.
Other income of USD2.4 million reflects the write-back of
receivables previously written down and the write-back of deferred
income from the government subsidied loans.
The factory receives an allocation CO(2) emissions from the
government and does not trade them as they are at a level similar
to historical production. There is a very limited market for
alternative fuels and the increase in additives in the cement is
not yet accepted beyond certain levels.
Capital investment increased significantly in 2022 but it will
be limited going forward
Capital investment was accelerated to USD10 million to complete
the work started in 2021 and to compensate for the slow down in
investment during 2019 and 2020 due to COVID19. Apart from the
traditional maintenance capex and purchase of key spares for USD3
million per year, we managed to complete a significant number of
projects in 2022:
- New FL Smith close circuit separator for cement mill number 1
with an investment of USD3.6 million. The mill capacity was
increased by 30%, slag content can be increased to 25%, power
consumption has been reduced and the quality and stability has
improved
- A similar separator for cement mill number 2,. The project was
started and USD1.5 million was spent in 2022. Commissioning will be
done between the winter 2023 and spring 2024.
- Replacement of one reducer for one cement mill at a cost of USD 0.9 million
- Bucket crane revamping to support summer sales USD 0.3 million
- Online monitoring of main stack emissions to comply with
ecological requirements USD0.15 million
- Coal dosing system to improve feeding reliability
- High tension drive motors to maintain key spares
- Additional gas analyzer for kiln system to maintain clinker stability
Those projects were financed by USD4.3 million in subsidized
loans and USD 3.5 million from internal cash flow.
We have plans for a further USD4 million investment in 2023 and
the first quarter of 2024 including:
- Complete the new separator for cement mill 2 for USD 2 million
- Preheater raiser duct extension by 24 meters to improve the preheater calcination in line 6
- Software upgrades to the ABB control system at a cost of
USD0.7 million to allow further automatisation of the factory and
prevent obsolescence
- Engineering of raw mill 3 separator conversion to dynamic
separator to support the increase in production of line 6 by 10%
when completed
- Upgrades to bag filters to improve maintenance and future enviroment requirements
The government has announced that the subsidized credit lines
will be limited as the focus shifts to the control of inflation. We
will try to complete the remaining capex planned with our cash flow
to avoid borrowings at commercial KZT rates as much as
possible.
Financial position: New debt will be limited as interest rates
in Kazakhstan have increased to 20% per annum in 2023
During the year, our total loans outstanding were stable at
USD6.7 million versus USD5.6 million in 2021. The loans had good
subsidized rates in KZT but the renewal will be most likely made at
near commercial rates and the company has an incentive to reduce
the borrowing in 2023. The company ended the year with net debt of
USD2.6 million, excluding IFRS 16 leases.
Long-term loans were increased from USD3.2million to
USD5.4million while short term loans were reduced from USD 2.3 to
USD 1.3million.
Despite the politically unstable environment in Kazakhstan at
the beginning of the year, the unpredictable situation in the
region and the surge in inflation, the KZT had only an 8%
devaluation against the USD and an average exchange rate of 461 vs
426 in 2021.
We maintain short term credit lines available as stand by:
- KZT 1 billion short term in a government subsidized program in
KZT at 6% per annum, but it will difficult to renew
- KZT 2 billion from Halyk Bank at 6% p.a. in USD or 20% in KZT.
Depreciation of property, plant and equipment decreased to
USD6.1 million in 2022 due to devaluation
Steppe Cement's effective income tax rate was 20% consistent
with last year.
Javier del Ser Perez
Chief Executive Officer
Annual Report 2022 and Annual General Meeting
Steppe Cement will release its Annual Report 2022 on its web
site at www.steppecement.com during the week commencing 20th June
2023. The Company's Annual General Meeting is expected to take
place at its Malaysian Office at Suite 10.1, 10th Floor, West Wing,
Rohas Perkasa, 8 Jalan Perak, Kuala Lumpur Malaysia on Wednesday,
12th July 2023 at 4 p.m.
Steppe Cement's AIM nominated adviser and broker is RFC Ambrian
Limited.
Nominated Adviser contact: Stephen Allen or Andrew Thomson on
+61 8 9480 2500.
Broker contact: Charlie Cryer at +44 20 3440 680
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2022
The Group The Company
Note 2022 2021 2022 2021
USD USD USD USD
Revenue 4 86,732,039 84,578,739 14,641,442 1,469,264
Cost of sales (49,107,243) (44,834,182) - -
------------- ------------- ------------ -----------
Gross profit 37,624,796 39,744,557 14,641,442 1,469,264
Selling expenses (10,997,920) (12,264,221) - -
General and
administrative
expenses (6,393,080) (6,761,722) (369,812) (324,207)
Interest income 573,913 401,619 - -
Finance costs 5 (1,048,888) (1,090,949) - -
Net foreign exchange
loss 6 (435,204) (227,951) (330,675) (825)
Other income, net 2,367,459 1,616,216 - 112,940
Profit before income
tax 7 21,691,076 21,417,549 13,940,955 1,257,172
Income tax expense 8 (3,807,706) (4,352,182) - -
------------- ------------- ------------ -----------
Profit for the
year 17,883,370 17,065,367 13,940,955 1,257,172
============= ============= ============ ===========
Attributable to
shareholders of
the
Company 17,883,370 17,065,367 13,940,955 1,257,172
============= ============= ============ ===========
Earnings per share:
Basic and diluted
(cents) 9 8.2 7.8
============= =============
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
The Group The Company
2022 2021 2022 2021
USD USD USD USD
Profit for the year 17,883,370 17,065,367 13,940,955 1,257,172
------------- ------------- ------------ -----------
Other comprehensive
(loss)/income:
Items that may not
be
reclassified subsequently
to
profit or loss:
Revaluation gain on
property,
plant and equipment, - - - -
net of
tax
Gain on recovery of
impaired - 15,373 - -
assets
Increase in provision
for
site restoration - (23,611) - -
Items that may be
reclassified
subsequently to profit
or
loss:
Exchange differences
arising from translation
of
foreign operations (5,829,119) (1,923,738) - -
------------- ------------- ------------ -----------
Total other comprehensive
loss (5,829,119) (1,931,976) - -
------------- ------------- ------------ -----------
Total comprehensive
income for the year 12,054,251 15,133,391 13,940,955 1,257,172
============= ============= ============ ===========
Attributable to the
shareholders of the
Company 12,054,251 15,133,391 13,940,955 1,257,172
============= ============= ============ ===========
.
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF FINANCIAL POSITION
AS OF 31 DECEMBER 2022
The Group The Company
Note 2022 2021 2022 2021
USD USD USD USD
Assets
Non-Current Assets
Property, plant
and
equipment 10 49,361,749 48,437,801 - -
Right-of-use assets 11 5,525 1,700,510 - -
Investment in subsidiary
companies 12 - - 36,199,599 36,199,599
Loans to subsidiary
company 27 - - 30,050,000 30,080,000
Other assets 13 1,530,916 155,132 - -
Total Non-Current
Assets 50,898,190 50,293,443 66,249,599 66,279,599
------------ ------------ ------------ ------------
Current Assets
Inventories 14 20,646,156 16,023,541 - -
Trade and other
receivables 15 2,045,004 1,751,720 2,372,114 1,724,364
Other assets 13 1,081,719 2,258,501 - -
Income tax recoverable 602,734 911,395 - -
Loans and advances
to
subsidiary companies 27 - - 60,352 49,536
Advances and prepaid
expenses 16 8,577,714 5,233,894 7,305 4,971
Cash and cash
equivalents 17 4,143,953 10,136,022 1,239,827 614,225
Total Current Assets 37,097,280 36,315,073 3,679,598 2,393,096
Total Assets 87,995,470 86,608,516 69,929,197 68,672,695
============ ============ ============ ============
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF FINANCIAL POSITION
AS OF 31 DECEMBER 2022 (CONTINUED)
The Group The Company
Note 2022 2021 2022 2021
USD USD USD USD
Equity and Liabilities
Capital and Reserves
Share capital 18 73,760,924 73,760,924 73,760,924 73,760,924
Revaluation reserve 19 1,795,426 2,068,114 - -
Translation reserve 19 (126,267,201) (120,438,082) - -
Retained earnings/
(Accumulated losses) 19 115,791,111 110,190,323 (4,220,191) (5,605,876)
------------- ------------- ------------- -------------
Net Equity 65,080,260 65,581,279 69,540,733 68,155,048
------------- ------------- ------------- -------------
Non-Current Liabilities
Borrowings 20 3,913,689 1,941,383 - -
Lease liabilities 21 - 8,571 - -
Deferred taxes 22 3,266,775 4,318,652 - -
Deferred income 23 2,572,552 1,588,098 - -
Provision for site
restoration 178,420 180,314 - -
Total Non-Current
Liabilities 9,931,436 8,037,018 - -
------------- ------------- ------------- -------------
Current Liabilities
Trade and other
payables 24 7,348,587 5,061,705 - -
Accrued and other
liabilities 25 2,250,689 1,552,778 143,808 227,897
Amount owing to
a
subsidiary company 27 - - 244,656 289,750
Borrowings 20 2,814,525 3,614,801 - -
Lease liabilities 21 58,960 2,017,879 - -
Deferred income 23 140,259 103,720 - -
Taxes payable 26 370,754 639,336 - -
Total Current Liabilities 12,983,774 12,990,219 388,464 517,647
------------- ------------- ------------- -------------
Total Liabilities 22,915,210 21,027,237 388,464 517,647
------------- -------------
Total Equity and
Liabilities 87,995,470 86,608,516 69,929,197 68,672,695
============= ============= ============= =============
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Non-distributable
Distributable
Share Revaluation Translation Retained
The Group capital reserve reserve earnings Net*
USD USD USD USD USD
As of 1 January
2022 73,760,924 2,068,114 (120,438,082) 110,190,323 65,581,279
Profit for the
year - - - 17,883,370 17,883,370
Other
comprehensive
loss - - (5,829,119) - (5,829,119)
----------------------- --------------------------------------------------
Total
comprehensive
income for the
year - - (5,829,119) 17,883,370 12,054,251
Other
transactions
impacting
equity:
Dividends paid
(Note 19) - - - (12,555,270) (12,555,270)
Transfer of
revaluation
reserve
relating to
property,
plant and
equipment
through
use - (272,688) - 272,688 -
As of 31
December 2022 73,760,924 1,795,426 (126,267,201) 115,791,111 65,080,260
=========== ======================= ================================================== ============== =============
* Attributable to the shareholders of the Company
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022 (CONTINUED)
Non-distributable
Distributable
Share Revaluation Translation Retained
The Group capital reserve reserve earnings Net*
USD USD USD USD USD
As of 1
January 2021 73,760,924 2,370,706 (118,514,344) 100,325,002 57,942,288
Profit for the
year - - - 17,065,367 17,065,367
Other
comprehensive
loss - (8,238) (1,923,738) - (1,931,976)
----------------------- --------------------------------------------------
Total
comprehensive
income for
the
year - (8,238) (1,923,738) 17,065,367 15,133,391
Other
transactions
impacting
equity:
Dividends
paid (Note
19) - - - (7,494,400) (7,494,400)
Transfer of
revaluation
reserve
relating to
property,
plant and
equipment
through
use - (294,354) - 294,354 -
As of 31
December 2021 73,760,924 2,068,114 (120,438,082) 110,190,323 65,581,279
=========== ======================= ================================================== ============== ============
* Attributable to the shareholders of the Company
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
(Accumulated
losses)/
Distributable
Share Retained
The Company Capital earnings Net
USD USD USD
As of 1 January 2022 73,760,924 (5,605,876) 68,155,048
Total comprehensive income
for the year - 13,940,955 13,940,955
Dividends paid (Note 19) - (12,555,270) (12,555,270)
As of 31 December 2022 73,760,924 (4,220,191) 69,540,733
=========== =============== =============
As of 1 January 2021 73,760,924 631,352 74,392,276
Total comprehensive income
for the year - 1,257,172 1,257,172
Dividends paid (Note 19) - (7,494,400) (7,494,400)
As of 31 December 2021 73,760,924 (5,605,876) 68,155,048
=========== =============== =============
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022
The Group The Company
2022 2021 2022 2021
USD USD USD USD
CASH FLOWS FROM/ (USED
IN) OPERATING ACTIVITIES
Profit before income
tax 21,691,076 21,417,549 13,940,955 1,257,172
Adjustments for:
Depreciation of property,
plant and equipment 6,135,236 7,039,116 - -
Depreciation of right-of-use
assets 1,587,293 1,716,748 - -
Dividend income - - (13,309,140) -
Gain on disposal of
property, plant (27,725) - - -
and equipment
Interest income (573,913) (401,619) (1,332,302) (1,469,264)
Finance costs 1,048,888 1,090,949 - -
Net unrealised foreign
exchange
loss 538,663 227,951 - -
Provision for obsolete
inventories 167,628 142,387 - -
Credit loss allowance
for
doubtful receivables 174,650 594,901 - -
Allowance for advances
paid
to third parties 157,723 11,676 - -
Deferred income (140,259) (105,947) - -
Reversal of allowance
for trade receivable
no longer required (172,464) (769,654) - -
------------- ------------- ------------ -----------
Operating cash flows
before
movements in working
capital 30,586,796 30,964,057 (700,487) (212,092)
Movement in working capital:
(Increase)/Decrease in:
Inventories (8,501,824) (6,054,197) - -
Trade and other receivables (427,760) 302,194 (865,000) (90,000)
Loans and advances to
subsidiary companies - - 19,184 20,176
Advances, prepaid expenses
and
other assets (5,608,461) (2,820,912) (2,334) 877
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2022 (CONTINUED)
The Group The Company
2022 2021 2022 2021
USD USD USD USD
Increase/(Decrease) in:
Trade and other payables 2,097,417 659,458 - -
Accrued and other liabilities 786,440 54,890 (84,089) 41,149
Cash Generated From/(Used
In)
Operations 18,932,608 23,105,490 (1,632,726) (239,890)
Income tax paid (4,599,594) (3,985,384) - -
Net Cash From/(Used In)
Operating
Activities 14,333,014 19,120,106 (1,632,726) (239,890)
-------------- -------------- -------------- -------------
CASH FLOWS (USED IN)/
FROM INVESTING ACTIVITIES
Purchase of property,
plant and
equipment (7,768,695) (6,215,744) - -
Contribution to site
restoration
fund (334) (18,414) - -
Proceeds from disposal
of
property, plant and
equipment 85,599 118,234 - -
Dividends received from
subsidiary - - 13,309,140 6,610,895
Interest received 573,913 401,619 1,549,552 -
-------------- -------------- -------------- -------------
Net Cash (Used In)/From
Investing Activities (7,109,517) (5,714,305) 14,858,692 6,610,895
-------------- -------------- -------------- -------------
CASH FLOWS FROM/
(USED IN) FINANCING
ACTIVITIES
(Repayment to)/Advance
from a subsidiary company - - (45,094) 289,750
Return of net investment
from a
subsidiary company - - - 94,920
Proceeds from borrowings* 7,299,722 5,502,753 - -
Repayment of borrowings* (4,472,018) (6,345,979) - -
Repayment of lease liabilities* (1,838,949) (1,805,362) - -
Dividends paid (12,555,270) (7,494,400) (12,555,270) (7,494,400)
Interest paid (1,038,335) (1,081,123) - -
-------------- -------------- -------------- -------------
Net Cash Used In Financing
Activities (12,604,850) (11,224,111) (12,600,364) (7,109,730)
-------------- -------------- -------------- -------------
Company No. LL04433
STEPPE CEMENT LTD
(Incorported in Labuan FT, Malaysia under Labuan Companies Act,
1990)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONTINUED)
The Group The Company
2022 2021 2022 2021
USD USD USD USD
NET (DECREASE)/INCREASE
IN CASH AND CASH
EQUIVALENTS (5,381,353) 2,181,690 625,602 (738,725)
EFFECTS OF FOREIGN
EXCHANGE RATE
CHANGES (610,716) (259,348) - -
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 10,136,022 8,213,680 614,225 1,352,950
CASH AND CASH
EQUIVALENTS AT
END OF YEAR (Note 17) 4,143,953 10,136,022 1,239,827 614,225
============= ============ =========== ===========
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FLMJTMTBMMFJ
(END) Dow Jones Newswires
June 09, 2023 02:00 ET (06:00 GMT)
Steppe Cement (LSE:STCM)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Steppe Cement (LSE:STCM)
Gráfica de Acción Histórica
De May 2023 a May 2024
