TIDMSTCM
RNS Number : 1253M
Steppe Cement Limited
17 September 2021
Steppe Cement Ltd
Interim Results for the Half Year ended 30 June 2021
and General Market Update
1. Interim Results
Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a
consolidated profit after tax of USD6.2 million for the six months
ended 30 June 2021, an increase of 52%.
6 months 6 months % of change
ended ended
30 June 30 June
21 20
Sales (Tonnes) 840,661 764,752 10%
------------- ------------- ----------------
Consolidated turnover KZT
million 16,657 13,677 22%
------------- ------------- ----------------
Consolidated turnover (USD
Million) 39.5 33.8 17%
------------- ------------- ----------------
Consolidated profit after
tax (USD Million) 6.2 4.1 52%
------------- ------------- ----------------
Earnings per share (Cents) 2.8 1.9 47%
------------- ------------- ----------------
Average exchange rate (USD/KZT) 424 405 -5%
------------- ------------- ----------------
-- The Company managed to increase cement prices during the first half of 2021.
-- The average ex-factory price increased from 14,727 KZT /tonne
(USD36 per tonne) to 16,571 KZT/tonne (USD39 per tonne) or 11%
during the period.
-- Steppe Cement's gross margin increased from 40% to 46% in USD terms due to price increases.
-- Selling expenses per tonne increased in USD terms by 16% and
in KZT by 21% due to increases in transportation prices from the
national railways.
-- General and administrative expenses increased by 16% in USD.
-- The Kazakh Tenge average rate depreciated by 5% compared to
the first half of 2020 but only translated in a small foreign
exchange loss of USD 0.2 million as the company maintains very
small loan balances in USD.
-- The Company generated operating profit before working capital
changes of USD12.9 million in 1H 2021 against USD 11 million in
2020.
-- Kazakhstan GDP increased by 2.3% in 1H2021 compared to 1H2020
rebounding from a drop of 1.4% in the first quarter of 2021.
-- Reported inflation has been 7% up to the end of August 2021.
2. Production costs
-- Production costs increased by 5% in KZT mostly due to the
higher electricity cost, diesel and spare parts for
maintenance.
3. Update on the Kazakh cement market
-- The Kazakh cement market increased by 28% during the first
half of the year. The increase is due mostly to the program set in
place by the government that allows partial withdrawal from
personal pension funds for real estate investment or health
reasons. It was done to stimulate the economy and it may bring
total cement consumption in 2021 to 10.5 to 11 million tonnes in
2021, an increase of more than 1 million tonnes from 2020.
-- Steppe Cement's local market share decreased from 16.5% in
1H2020 to 15% in 1H2021 due to the strong growth in the overall
market. We expect to maintain this share for the full year. Exports
represented 9% of the volumes in the 1H2021 from 11% last year.
-- Imports into Kazakhstan have increased to 0.4 million tonnes
in 2021 and represent 7% of the market.
-- Exports from Kazakhstan have increased slightly to 0.97 million tonnes.
-- Exports from Kazakhstan represent 17% of local production from 18% last year.
-- Overall production of all factories in Kazakhstan has
increased by 1 million tonnes to 5.7 million tonnes for the 1H2021
as closures in the smaller factories were balanced by increases in
production by Gezhuoba Cement and Alacem.
-- Currently 82% of production in the country is manufactured
from dry lines up from 80% in 2020.
4. Financing
-- Interest expenses on bank debt were reduced to USD 0.37
million from USD 0.41 million in 2020 mostly on subsidised loans
while we reduced interest expenses on lease liabilities to USD 0.13
million from USD 0.35 million after the application of IFRS 16 on
the 3 years wagon leases. The rental on those wagons was considered
selling expenses previously.
-- Steppe Cement recorded a net cash position of USD7.4 million
compared to net cash of USD6.4 million as of 30 June 2020.
-- The borrowings of the Company as of 30 June 2021 were USD6.1
million while we carried a cash balance of USD 13.5 million. For
comparison, on 30 June 2020 we had USD3.2 million in borrowings and
USD9.6 million in cash.
-- As of 15 September 2021 after paying the dividend, the
financial debt was the equivalent of USD 5.6 million (all
denominated in KZT) and the cash was USD10.5 million.
-- We have maintained the working capital lines available for the winter.
A pdf copy of the announcement and 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 9480 2500.
Broker: Contact Charlie Cryer at +44 20 3440 6800
SUMMARY OF INTERIM FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2021 (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 PERIODED 30 JUNE 2021 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2021 30 June 2020 30 June 30 June
2021 2020
USD'000 USD'000 USD'000 USD'000
Revenue 39,534 33,786 691 701
Cost of sales (21,230) (20,285) - -
----------------- ----------------- ------------ ------------
Gross profit 18,304 13,501 691 701
Selling expenses (6,577) (5,162) - -
General and administrative
expenses (2,965) (2,566) (157) (135)
----------------- ----------------- ------------ ------------
Operating profit 8,762 5,773 534 566
Interest income 78 112 - ^
Finance costs (475) (766) - -
Net foreign exchange
(loss)/gain (147) (571) (1) 3
Other income, net (511) 248 - 82
----------------- ----------------- ------------ ------------
Profit before income
tax 7,707 4,796 533 651
Income tax expense (1,515) (736) - -
----------------- ----------------- ------------ ------------
Profit for the period 6,192 4,060 533 651
================= ================= ============ ============
Attributable to:
Shareholders of the
Company 6,192 4,060 533 651
Earnings per share:
Basic and diluted
(cents) 2.8 1.9
================= =================
^ Insignificant amount.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE PERIODED 30 JUNE 2021 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2021 30 June 2020 30 June 2021 30 June
2020
USD'000 USD'000 USD'000 USD'000
Profit for the period 6,192 4,060 533 651
Other comprehensive
loss:
Item that may be reclassified
subsequently to profit
or loss
Exchange differences
arising on translation
of foreign subsidiary
companies (902) (3,499) - -
Total other comprehensive
loss for the period (902) (3,499) - -
----------------- ----------------- ----------------- ------------
Total comprehensive
income for the period 5,290 561 533 651
================= ================= ================= ============
Attributable to:
Shareholders of the
Company 5,290 561 533 651
================= ================= ================= ============
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021 (UNAUDITED)
The Group The Company
Unaudited Audited Unaudited Audited
30 June 2021 31 Dec 2020 30 June 2021 31 Dec 2020
USD'000 USD'000 USD'000 USD'000
Assets
Non-Current Assets:
Property, plant
and equipment 49,461 48,856 - -
Right-of-use assets 2,571 3,483
Investment in subsidiary
companies - - 36,307 36,294
Loan to subsidiary
company - - 30,100 30,110
Advances 11 - - -
Other assets 1,887 1,901 - -
Total Non-Current
Assets 53,930 54,240 66,407 66,404
----------------- ---------------- ----------------- ----------------
Current Assets
Inventories 11,766 11,098 - -
Trade and other
receivables 3,438 2,332 7,807 6,776
Other assets - 305 - -
Income tax receivable 1,037 1,435 - -
Loans and advances
to subsidiary companies - - 40 40
Advances and prepaid
expenses 4,915 3,644 18 6
Cash and cash equivalents 13,470 8,214 846 1,353
Total Current Assets 34,626 27,028 8,711 8,175
----------------- ---------------- ----------------- ----------------
Total Assets 88,556 81,268 75,118 74,579
================= ================ ================= ================
The Group The Company
Unaudited Audited Unaudited Audited
30 June 2021 31 Dec 2020 30 June 31 Dec 2020
2021
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 2,222 2,370 - -
Translation reserve (119,416) (118,514) - -
Retained earnings 106,665 100,325 1,164 631
----------------- ---------------- -------------- ----------------
Total Equity 63,232 57,942 74,925 74,392
----------------- ---------------- -------------- ----------------
Non-Current Liabilities
Borrowings 3,587 2,368 - -
Lease liabilities 1,057 2,077 - -
Deferred taxes 4,728 4,560 - -
Deferred income 1,762 1,492 - -
Provision for site
restoration 177 151 - -
Total Non-Current
Liabilities 11,311 10,648 - -
----------------- ---------------- -------------- ----------------
Current liabilities
Trade and other
payables 5,116 4,075 - -
Accrued and other
liabilities 3,139 1,638 193 187
Borrowings 2,470 4,429 - -
Lease liabilities 1,914 1,831 - -
Taxes payable 1,374 705 - -
Total Current Liabilities 14,013 12,678 193 187
----------------- ---------------- -------------- ----------------
Total Liabilities 25,324 23,326 193 187
----------------- ---------------- ----------------
Total Equity and
Liabilities 88,556 81,268 75,118 74,579
================= ================ ============== ================
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2021 (UNAUDITED)
Non-distributable Distributable
The Group Share Revaluation Translation Retained Total
capital reserve reserve earnings
USD'000 USD'000 USD'000 USD'000 USD'000
Balance as at
1 January
2021 73,761 2,370 (118,514) 100,325 57,942
------------- ---------------------- ---------------- ------------------ ------------
Profit for the
period - - - 6,192 6,192
Other
comprehensive
loss - - (902) - (902)
------------- ---------------------- ---------------- ------------------ ------------
Total
comprehensive
income/(loss)
for the
period - - (902) 6,192 5,290
Transfer of
revaluation
reserve
relating to
the
depreciation
of property,
plant and
equipment
through
use - (148) - 148 -
------------- ---------------------- ---------------- ------------------ ------------
Balance as at
30 June
2021 73,761 2,222 (119,416) 106,665 63,232
============= ====================== ================ ================== ============
Non-distributable Distributable
The Group Share Revaluation Translation Retained Total
capital reserve reserve earnings
USD'000 USD'000 USD'000 USD'000 USD'000
Balance as at
1 January
2020 73,761 2,016 (113,286) 100,386 62,877
------------- ---------------------- ---------------- ------------------ ------------
Profit for the
period - - - 4,060 4,060
Other
comprehensive
(loss)/income - - (3,499) - (3,499)
------------- ---------------------- ---------------- ------------------ ------------
Total
comprehensive
income
for the
period - - (3,499) 4,060 561
Transfer of
revaluation
reserve
relating to
the
depreciation
of property,
plant and
equipment
through
use - (157) - 157 -
------------- ---------------------- ---------------- ------------------ ------------
Balance as at
30 June
2020 73,761 1,859 (116,785) 104,603 63,438
============= ====================== ================ ================== ============
The Company Share capital Retained earnings Total
USD'000 USD'000 USD'000
Balance as at 1 January 2021 73,761 631 74,392
Total comprehensive income for the
period - 533 533
Balance as at 30 June 2021 73,761 1,164 74,925
================== ========================== ==============
Balance as at 1 January 2020 73,761 1,577 75,338
Total comprehensive income for the
period - 651 651
Balance as at 30 June 2020 73,761 2,228 75,989
================== ========================== ==============
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2021 (UNAUDITED)
The Group The Company
6 months ended 6 months ended
30 June 2021 30 June 30 June 2021 30 June
2020 2020
USD'000 USD'000 USD'000 USD'000
OPERATING ACTIVITIES
Profit before income
tax 7,707 4,796 533 651
Adjustments for:
Depreciation of property,
plant and equipment 3,733 3,559 - -
Depreciation of right-of-use
assets 1,031 1,446 - -
Adjustments for non-cash
items 478 1,192 (1,030) (329)
----------------- ------------ ----------------- ------------
Operating Profit/(Loss)
Before Working Capital
Changes 12,949 10,993 (497) 322
(Increase)/ Decrease
in:
Inventories (1,607) 541 - -
Trade and other receivables, (2,175) (1,411) (12) (872)
advances and prepaid
expenses
Loans and advances from
subsidiary companies - - (3) 10
Increase in:
Trade and other payables, 3,317 2,251 5 16
accrued and other liabilities
Cash Generated From/(Used
In) Operations 12,484 12,374 (507) (524)
Income tax paid (730) (185) - -
Interest paid (299) (580) - -
----------------- ------------ ----------------- ------------
Net Cash Generated From/(Used
In) Operating Activities 11,455 11,609 (507) (524)
----------------- ------------ ----------------- ------------
INVESTING ACTIVITIES
Purchase of property,
plant and equipment (4,529) (2,644) - -
Purchase of other assets (18) - - -
Interest received 78 112 - 330
----------------- ------------ ----------------- ------------
Net Cash (Used In)/Generated
From Investing Activities (4,469) (2,532) - 330
----------------- ------------ ----------------- ------------
FINANCING ACTIVITIES
Proceeds from borrowings 3,350 2,098 - -
Repayment from borrowings (4,089) (9,003) - -
Payment of lease liabilities (877) (1,133) - -
----------------- ------------ ----------------- ------------
Net Cash Used In Financing
Activities (1,616) (8,038) - -
----------------- ------------ ----------------- ------------
NET INCREASE/(DECREASE)
IN CASH AND CASH EQUIVALENTS 5,370 1,039 (507) (194)
EFFECTS OF FOREIGN EXCHANGE
RATE CHANGES (114) (486) - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE PERIOD 8,214 9,014 1,353 262
----------------- ------------ ----------------- ------------
CASH AND CASH EQUIVALENTS
AT END OF THE PERIOD 13,470 9,567 846 68
================= ============ ================= ============
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END
IR EAANXFSLFEEA
(END) Dow Jones Newswires
September 17, 2021 01:59 ET (05:59 GMT)
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