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
================= ============ ================= ============
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END
IR EALNAFFDNEEF
(END) Dow Jones Newswires
September 12, 2019 02:00 ET (06:00 GMT)
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