Steppe Cement Limited Interim Results and General Market Update

Data : 12/09/2019 @ 08:00
Fonte : UK Regulatory (RNS & others)
Titolo : Steppe Cement Ltd (STCM)
Quotazione : 30.5  1.5 (5.17%) @ 15:32
Quotazione Steppe Cement Grafico

Steppe Cement Limited Interim Results and General Market Update

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TIDMSTCM

RNS Number : 0891M

Steppe Cement Limited

12 September 2019

Steppe Cement Ltd

Interim Results for the Half Year ended 30 June 2019

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD 3.1 million for the six months ended 30 June 2019.

 
                                                        6 months       6 months       % of change 
                                                          ended          ended 
                                                         30 June        30 June 
                                                           19             18 
     Sales (Tonnes)                                     780,315        738,228            6% 
                                                   -------------  -------------  ---------------- 
     Consolidated turnover (KZT million)                 14,079         10,539            34% 
                                                   -------------  -------------  ---------------- 
     Consolidated turnover (USD Million)                  37.1           32.8             13% 
                                                   -------------  -------------  ---------------- 
     Consolidated profit after tax (USD Million)          3.1            0.2 
                                                   -------------  -------------  ---------------- 
     Profit per share (Cents)                             1.4            0.1 
                                                   -------------  -------------  ---------------- 
     Average exchange rate (USD/KZT)                      379            326             -16% 
                                                   -------------  -------------  ---------------- 
 

-- The Company continued to maintain prices from last summer while taking advantage of the slight increase of volumes in the first few months of 2019.

-- The average ex-factory price increased from 11,560 KZT /tonne to 15,148 KZT /tonne or 31% during the period.

   --    Steppe Cement's gross margin increased from 32% to 37% in USD terms. 

-- Selling expenses decreased in USD terms but increased in KZT by 12% on per tonne basis due to inflation in transport costs.

   --    Administrative expenses were reduced by 3% in KZT. 

-- The Kazakh Tenge depreciated by 16% compared to the first half of 2018. However, the devaluation took part mostly in the second half of 2018 and therefore the Company only booked foreign exchange losses of USD 0.04 million in 1H 2019.

-- The Company generated operating profit before working capital changes of USD 7.9 million in 1H 2019 against USD 5.3 million in 2018.

   --    The Kazakhstan economy grew at 3.8% up to April 2019. 
   --    Reported inflation has been 5.5% up to the end of August 2019. 

2. Production costs

-- Production costs increased by 17% in KZT mostly due to the lower level of clinker production as both lines were stopped for longer than usual annual maintenance in 1H 2019.

-- The volumes lost in 1H should be recovered in the second half as less maintenance stops are planned.

3. Update on the Kazakh cement market

-- The Kazakh cement market decreased by 3% during the first half of the year. Steppe Cement expects a market of about 8.4 million tonnes for the full year 2019, a 3% decrease compared to 2018.

-- Steppe Cement increased its local market share from 15.5% in 1H2018 to 17% in 1H2019. We expect to maintain or increase slightly this share for the full year. Exports represented 13% of the volumes in the 1H2019 similar to last year's.

-- Imports into Kazakhstan have remained stable at 0.34 million tonnes in 2019 and they represent 8% of the market.

-- Exports from Kazakhstan have decreased slightly to 0.87 million tonnes from 0.92 million last year.

   --    Exports from Kazakhstan represent 19% of local production. 

-- Overall production of all factories in Kazakhstan has decreased by 4% to 4.6 million tonnes for the 1H2019.

-- Currently 80% of production in the country is coming from dry lines, an increase of 2% compared to last year's level.

4. Financing

The debt position of the company as of 30 June 2019 was USD10.7 million (USD 4.6 million current and USD 6.1 million long term):

-- A long-term USD 5.1 million loan outstanding to 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.

-- A loan of KZT 1.178 billion with Halyk Bank JSC subsidised by the government for capital investment at 6% p.a.

-- A loan of KZT 500 million with Halyk Bank JSC subsidised by the government for working capital at 6% p.a.

-- 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 13% p.a. in KZT respectively. As of 30 June 2019 we had the equivalent of USD 1.1 million outstanding from these working capital loans.

At the same time we carried a balance of USD 10.8 million in cash of which USD 8.3 million were subsequently used to pay a dividend.

As of 31 August 2019, the total debt was USD 9 million (53% in USD and the rest in KZT)

The total bank debt net of cash amounted to USD 5.1 million.

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 94802500.

Broker: Contact Charlie Cryer at +44 20 3440 6800

SUMMARY OF INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2019 (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 2019 (UNAUDITED)

 
                                                   The Group                         The Company 
                                                6 months ended                      6 months ended 
                                        30 June 2019       30 June 2018       30 June       30 June 2018 
                                                                                 2019 
                                             USD'000            USD'000       USD'000            USD'000 
 
     Revenue                                  37,122             32,838           629                 50 
 
     Cost of sales                          (23,515)           (22,114)             -                  - 
                                   -----------------  -----------------  ------------  ----------------- 
 
     Gross profit                             13,607             10,724           629                 50 
 
     Selling expenses                        (6,584)            (6,450)             -                  - 
 
     General and administrative 
     expenses                                (2,380)            (2,838)         (147)              (145) 
                                   -----------------  -----------------  ------------  ----------------- 
 
     Operating profit/(loss)                   4,643              1,436           482               (95) 
     Interest income                             147                 15             ^                  ^ 
     Finance costs                             (554)              (942)             -                  - 
     Net foreign exchange 
      (loss)/gain                               (36)              (500)             3                 21 
     Other income, net                           148                396             -                  - 
                                   -----------------  -----------------  ------------  ----------------- 
 
     Profit/(Loss) before 
      income tax                               4,348                405           485               (74) 
 
     Income tax expense                      (1,266)              (199)             -                (2) 
                                   -----------------  -----------------  ------------  ----------------- 
 
     Profit/(Loss) for the 
      period                                   3,082                206           485               (76) 
                                   =================  =================  ============  ================= 
 
     Attributable to: 
     Shareholders of the 
      Company                                  3,082                206           485               (76) 
 
     Profit per share: 
 
     Basic and diluted (cents)                   1.4                0.1 
                                   =================  ================= 
 

^ Insignificant amount.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIODED 30 JUNE 2019 (UNAUDITED)

 
                                                  The Group                            The Company 
                                               6 months ended                        6 months ended 
                                       30 June 2019       30 June 2018       30 June 2019       30 June 2018 
                                            USD'000            USD'000            USD'000            USD'000 
 
     Profit/(Loss) for the 
      period                                  3,082                206                485               (76) 
 
     Other comprehensive 
      income/(loss): 
     Item that may be 
     reclassified 
     subsequently to profit 
     or loss 
 
     Exchange differences 
      arising on translation 
      of foreign subsidiary 
      companies                                 759            (1,756)                  -                  - 
 
     Total other comprehensive 
      income/(loss) for the 
      period                                    759            (1,756)                  -                  - 
                                  -----------------  -----------------  -----------------  ----------------- 
 
     Total comprehensive 
      income/(loss) for the 
      period                                  3,841            (1,550)                485               (76) 
                                  =================  =================  =================  ================= 
 
     Attributable to: 
     Shareholders of the 
      Company                                 3,841            (1,550)                485               (76) 
                                  =================  =================  =================  ================= 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019 (UNAUDITED)

 
                                                    The Group                         The Company 
                                           Unaudited           Audited          Unaudited           Audited 
                                        30 June 2019       31 Dec 2018       30 June 2019       31 Dec 2018 
                                             USD'000           USD'000            USD'000           USD'000 
     Assets 
     Non-Current Assets: 
     Property, plant 
      and equipment                           52,733            54,612                  -                 - 
     Investment in subsidiary 
      companies                                    -                 -             26,500            26,500 
     Loan to subsidiary 
      company                                      -                 -             30,160            30,170 
     Lease receivable                            960                 -                  -                 - 
     Advances and prepaid 
      expenses                                   291               191                  -                 - 
     Other assets                              2,247             2,203                  -                 - 
 
     Total Non-Current 
      Assets                                  56,231            57,006             56,660            56.670 
                                   -----------------  ----------------  -----------------  ---------------- 
 
     Current Assets 
     Inventories                              12,205            13,381                  -                 - 
     Trade and other 
      receivables                              4,393             3,500              9,308             8,884 
     Lease receivable                            612                 -                  -                 - 
     Income tax receivable                       171               175                  -                 - 
     Loans and advances 
      to subsidiary companies                      -                 -              9,671             9,634 
     Advances and prepaid 
      expenses                                 2,860             2,313                 13                 7 
     Cash and cash equivalents                10,777             5,720                 83                23 
 
     Total Current Assets                     31,018            25,089             19,075            18,548 
                                   -----------------  ----------------  -----------------  ---------------- 
 
     Total Assets                             87,249            82,095             75,735            75,218 
                                   =================  ================  =================  ================ 
 
 
                                                       The Group                     The Company 
                                           Unaudited           Audited       Unaudited           Audited 
                                        30 June 2019       31 Dec 2018         30 June       31 Dec 2018 
                                                                                  2019 
                                             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                       2,182             2,349               -                 - 
     Translation reserve                   (115,507)         (116,266)               -                 - 
     Retained earnings/ 
      (Accumulated loss)                      91,000            96,113         (7,478)               399 
                                   -----------------  ----------------  --------------  ---------------- 
 
     Total Equity                             51,436            55,957          66,283            74,160 
                                   -----------------  ----------------  --------------  ---------------- 
 
     Non-Current Liabilities 
     Borrowings                                6,084             6,607               -                 - 
     Deferred taxes                            3,028             2,055               -                 - 
     Deferred income                           1,610             1,629               -                 - 
     Provision for site 
      restoration                                224                65               -                 - 
 
     Total Non-Current 
      Liabilities                             10,946            10,356               -                 - 
                                   -----------------  ----------------  --------------  ---------------- 
 
     Current liabilities 
     Trade and other 
      payables                                15,521             6,615           8,362                 - 
     Accrued and other 
      liabilities                              3,484             2,682           1,090             1,058 
     Borrowings                                4,569             5,217               -                 - 
     Taxes payable                             1,293             1,268               -                 - 
 
     Total Current Liabilities                24,867            15,782           9,452             1,058 
                                   -----------------  ----------------  --------------  ---------------- 
 
     Total Liabilities                        35,813            26,138           9,452             1,058 
                                   -----------------  ----------------                  ---------------- 
 
     Total Equity and 
      Liabilities                             87,249            82,095          75,735            75,218 
                                   =================  ================  ==============  ================ 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIODED 30 JUNE 2019 (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 
      2019                  73,761                   2,349         (116,266)              96,113        55,957 
                     -------------  ----------------------  ----------------  ------------------  ------------ 
     Profit for the 
      period                     -                       -                 -               3,082         3,082 
     Other 
      comprehensive 
      income                     -                       -               759                   -           759 
                     -------------  ----------------------  ----------------  ------------------  ------------ 
     Total 
      comprehensive 
      income for 
      the 
      period                     -                       -               759               3,082         3,841 
     Dividend 
      payable                    -                       -                 -             (8,362)       (8,362) 
     Transfer of 
      revaluation 
      reserve 
      relating 
      to the 
      depreciation 
      of property, 
      plant 
      and equipment 
      through use                -                   (167)                 -                 167             - 
                     -------------  ----------------------  ----------------  ------------------  ------------ 
 
     Balance as at 
      30 June 2019          73,761                   2,182         (115,507)              91,000        51,436 
                     =============  ======================  ================  ==================  ============ 
 
 
                                         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 
      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 
                     =============  ======================  ================  ==================  ============ 
 
 
 
     The Company                               Share capital       Accumulated         Total 
                                                                        losses 
                                                     USD'000           USD'000       USD'000 
 
     Balance as at 1 January 2019                     73,761               399        74,160 
     Total comprehensive income for the 
      period                                               -               485           485 
     Dividend payable                                      -           (8,362)       (8,362) 
                                          ------------------  ----------------  ------------ 
     Balance as at 30 June 2019                       73,761           (7,478)        66,283 
                                          ==================  ================  ============ 
 
     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 
                                          ==================  ================  ============ 
 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2019 (UNAUDITED)

 
                                                       The Group                       The Company 
                                                     6 months ended                   6 months ended 
                                               30 June 2019       30 June       30 June 2019       30 June 
                                                                     2018                             2018 
                                                    USD'000       USD'000            USD'000       USD'000 
     OPERATING ACTIVITIES 
     Profit/(Loss) before income 
      tax                                             4,348           405                485          (73) 
     Adjustments for non-cash 
      items                                           3,530         4,870              (631)          (21) 
                                          -----------------  ------------  -----------------  ------------ 
 
     Operating Profit/(Loss) 
      Before Working Capital Changes                  7,878         5,275              (146)          (94) 
 
     (Increase)/ Decrease in: 
     Inventories                                      1,531       (1,309)                  -             - 
     Trade and other receivables,                   (3,401)       (2,169)              (430)          (12) 
     advances and prepaid expenses 
     Loans and advances from                              -             -               (27)             - 
      subsidiary companies 
     Increase/(Decrease) in: 
     Trade and other payables,                        1,517         4,038                 34            45 
     accrued and other liabilities 
     Loans and advances to subsidiary 
      companies                                           -             -                  -           138 
                                          -----------------  ------------  -----------------  ------------ 
 
     Cash Generated From/(Used 
      In) Operations                                  7,525         5,835              (569)            77 
     Income tax paid                                   (85)             -                  -             - 
     Interest paid                                    (420)         (947)                  -             - 
                                          -----------------  ------------  -----------------  ------------ 
 
     Net Cash Generated From/(Used 
      In) Operating Activities                        7,020         4,888              (569)            77 
                                          -----------------  ------------  -----------------  ------------ 
 
 
     INVESTING ACTIVITIES 
     Purchase of property, plant 
      and equipment                                   (844)       (2,437)                  -             - 
     Purchase of other assets                          (29)          (28)                  -             - 
     Interest received                                  147            15                629             - 
                                          -----------------  ------------  -----------------  ------------ 
 
     Net Cash Used In Investing 
      Activities                                      (726)       (2,450)                629             - 
                                          -----------------  ------------  -----------------  ------------ 
 
 
     FINANCING ACTIVITIES 
     Proceeds from borrowings                         4,515         7,253                  -             - 
     Repayment from borrowings                      (5,805)       (9,013)                  -             - 
                                          -----------------  ------------  -----------------  ------------ 
 
     Net Cash Used In Financing 
      Activities                                    (1,290)       (1,760)                  -             - 
                                          -----------------  ------------  -----------------  ------------ 
 
     NET INCREASE IN CASH AND 
      CASH EQUIVALENTS                                5,004           678                 60            77 
     EFFECTS OF FOREIGN EXCHANGE 
      RATE CHANGES                                       54          (69)                  -             - 
     CASH AND CASH EQUIVALENTS 
      AT BEGINNING OF THE PERIOD                      5,719         3,045                 23            13 
                                          -----------------  ------------  -----------------  ------------ 
 
     CASH AND CASH EQUIVALENTS 
      AT END OF THE PERIOD                           10,777         3,654                 83            90 
                                          =================  ============  =================  ============ 
 
 

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.

END

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