RNS Number : 0394O
Steppe Cement Limited
16 September 2013
 



Steppe Cement Limited

16 September 2013

 

Steppe Cement Ltd

Interim Results for the Half Year 30 June 2013

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement") posted a consolidated profit after tax of USD 2.2 million for the six months ended 30 June 2013.

 

6 months

ended 

30 June 13

6 months

ended

30 June 12

% of change

Sales (Tonnes)

564,440

615,838

(8.3%)

Consolidated turnover (USD Million)

54.3

52.1

4%

Consolidated profit/(loss) after tax (USD Million)

2.2

(0.1)


Earnings/(loss) per share (Cent)

1

(0.1)


Average exchange rate (USD/KZT)

150

148


 

·     Sales increased by 4% while volumes decreased by 8%. The average sales price increased from USD 85/tonne to USD 96/tonne or 13% during the period.

·     Production costs per tonne increased by 9% in USD due to general inflation, change in product mix, and increased expenses related to quarries.

·     Selling expenses have risen on a per tonne basis by 3% due to increase in railway tariff on cement transportation to customers.

·     General and administrative expenses decreased by 3% during the period.

·     Steppe Cement generated USD 7.4 million from operations in the 1H 2013 while managing to increase inventories of work in progress and finished product by USD 2.7 m that will be sold in the second half of 2013.

·     The Kazakhstan tenge has depreciated during the last 12 months and currently stands at 153 (USD/KZT).

·     The Kazakhstan economy is expected to grow at 5-6% per annum in 2013.

 

 

2. Update on the Kazakh cement market

·     The Kazakhstan cement market increased by 11% during the first half of the year. Steppe Cement expects a market of 8 million tonnes for the full year 2013, an increase of 11% compared to the 7.2 million tonnes in 2012.

·     Previously unknown statistical information shows imports from Iran to West Kazakhstan at 140,000 tonnes in 2012 and estimated 370,000 tonnes in 2013. Steppe Cement has factored in the import data into the revised estimates of market size and share for 2013 and adjusted the actual market data for 2012.

·     Cement prices in 2H 2013 are expected to be comparable to the 1H 2013.

·     Overall production of all factories in Kazakhstan has increased by 10% in the first half of 2013 compared to 2012 while the share of the imported cement increased as well from 14% to 18%.

·     Steppe Cement's market share decreased from 19% in 1H2012 to 15% in 1H2013.

·     The Kazakhstan Government has continued its road building plan as well as significant infrastructure projects in most cities.

·     A new cement factory was commissioned in East Kazakhstan called Kazakh Cement which sold 170,000 tonnes in the first half of 2013 and it is expected to achieve an annual production capacity of 800,000 tonnes next year.

·     In 2014 two new cement production lines will be commissioned:

- Our line 5 with a capacity of 1.2 million tonnes; and

- Caspi Cement belonging to Heidelberg Cement Group in West Kazakhstan with an annual production capacity of 800,000 tonnes. The later is expected to replace cement imports from Russian and Iran.

 

3. Production and refurbishment progress

·     In 2013, contribution to production from dry and wet lines remains similar to 2012 with approximately 55% of production coming from the dry line number 6.

·     The refurbishment work on line 5 is near completion as we are starting the commissioning of various sections in the autumn. Photographs of the work progress and site are posted monthly on our website.

·     We expect cost savings of 5% to 10% on the original project budget of USD 40 million.

·     At the time of this announcement, USD 29.5 million has been spent on line 5 project with a total commitment of USD 35.6 million.

·     We have completed the electricity distribution line and substation that will allow Central Asia Services JSC, our fully owned subsidiary, to transmit electricity directly from the national grid company, KEGOC. We expect significant production cost savings for the dry lines upon its commissioning in the final quarter of 2013.

 

4. Financing

·     Steppe Cement made USD 6.1 million of principal repayments to EBRD and HSBC during the first half of 2013 and will repay the same amount in the second half.

·     The company has the funds to both complete the remaining line 5 works and make scheduled loan repayments to EBRD and HSBC until the end of the year. Currently our short-term credit line of USD 20 million remains unutilized.

 

A pdf copy of the announcement and the full interim financial statements are available on the company's website at www.steppecement.com.

 

Steppe Cement's AIM nominated adviser is RFC Ambrian Limited.

Contact Stephen Allen or Trinity McIntyre at +61 8 94802500.

 

 

SUMMARY OF INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2013 (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 INCOME STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2013 (UNAUDITED)

 

 


The Group


The Company



6 months ended


6 months ended



30 June

2013


30 June 2012


30 June 2013


30 June 2012



USD'000


USD'000


USD'000


USD'000










Revenue


54,347


52,155


50


50










Cost of sales


(33,978)


(34,099)


-


-










Gross profit


20,369


18,056


50


50










Selling expenses


(9,101)


(9,653)


-


-










General and administrative









expenses


(5,100)


(5,242)


(266)


(264)










Operating income/ (loss)


6,168


3,161


(216)


(214)

Interest income


30


-


-


-

Finance costs


(1,598)


(2,268)


-


-

Other (expense)/income, net


(781)


(502)


63


(9)










Profit/(Loss) before income tax


3,819


391


(153)


(223)










Income tax expense


(1,599)


(500)


-


-










Profit/(Loss) for the period


2,220


(109)


(153)


(223)










Attributable to:









Shareholders of the Company


2,220


(109)


(153)


(223)










Earnings/(Loss) per share:


















Basic (cent)


1.0


(0.1)





 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2013 (UNAUDITED)

 

 

 

 


The Group


The Company




6 months ended


6 months ended




30 June 2013


30 June 2012


30 June 2013


30 June 2012




USD'000


USD'000


USD'000


USD'000












Profit/(Loss) for the period


2,220


(109)


(153)


(223)












Other comprehensive loss:




















Exchange differences arising on translation of foreign subsidiary companies


(1,160)


(899)


-


-












Total comprehensive profit/(loss) for the period


1,060


(1,008)


(153)


(223)












Attributable to:










Shareholders of the Company


1,060


(1,008)


(153)


(223)


 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2013 (UNAUDITED)

 

 


The Group


The Company




Unaudited


Audited


Unaudited


Audited




30 June 2013


31 Dec 2012


30 June 2013


31 Dec 2012




USD'000


USD'000


USD'000


USD'000

Assets










Non-Current Assets:










Property, plant and equipment



160,643


135,442


-


-

Investment in subsidiary companies



-


-


30,500


30,500

Advances and prepaid expenses



1,437


2,385


-


-

Other assets



23,372


40,575


-


-











Total Non-Current Assets



185,452


178,402


30,500


30,500











Current Assets










Inventories



21,782


18,248


-


-

Trade and other receivables



9,074


6,779


-


-

Amount owing by subsidiary companies



-


-


39,060


37,510

Advances and prepaid expenses



4,990


4,934


13


6

Short-term investments



-


5,998


-


-

Cash and bank balances



5,135


14,016


1,244


2,923










Total Current Assets



40,981


49,975


40,317


40,439











Total Assets



226,433


228,377


70,817


70,939


 


The Group


The Company

 




Unaudited


Audited


Unaudited


Audited

 

30 June
2013

31 Dec
2012 

    

30 June
2013

31 Dec
2012

 




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



7,318


8,034


-


-


Translation reserve



(22,805)


(21,645)


-


-


Retained earnings/ (Accumulated loss)



91,960


89,024


(4,093)


(3,940)













Total Equity



150,234


149,174


69,668


69,821













Non-Current Liabilities











Borrowings



33,892


40,663


-


-


Deferred tax liabilities



10,025


8,519


-


-













Total Non-Current Liabilities



43,917


49,182


-


-













Current liabilities











Trade and other payables



8,336


8,026


-


-


Accrued and other liabilities



10,449


7,080


1,149


1,118


Borrowings



13,063


14,527


-


-


Taxes payable



434


388


-


-













Total Current Liabilities



32,282


30,021


1,149


1,118













Total Liabilities



76,199


79,203


1,149


1,118













Total Equity and Liabilities



226,433


228,377


70,817


70,939



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2013 (UNAUDITED)

 

 



Non-distributable




Distributable



 

The Group

Share capital


Revaluation reserve


Translation reserve


Retained earnings


Total/Net


USD'000


USD'000


USD'000


USD'000


USD'000











Balance as at 1 January 2012

58,298


9,477


(20,009)


79,221


126,987

 

Loss for the period

-


-


-


(109)


(109)

 

Exchange differences arising on   translation of foreign subsidiary companies

-


-


(899)


-


(899)

 

Total comprehensive loss for the period

-


-


(899)


(109)


(1,008)

 

Transfer of revaluation reserve relating to depreciation of property, plant and equipment

-


(726)


-


726


-

 











 

Balance as at 30 June 2012

58,298


8,751


(20,908)


79,838


125,979

 

 

 

 



Non-distributable




Distributable



 

The Group

Share capital


Revaluation reserve


Translation reserve


Retained earnings


Total/Net

 


USD'000


USD'000


USD'000


USD'000


USD'000

 











Balance as at 1 January 2013

73,761


8,034


(21,645)


89,024


149,174

 

Profit for the period

-


-


-


2,220


2,220

 

Exchange differences arising on   translation of foreign subsidiary companies

-


-


(1,160)


-


(1,160)

 

Total comprehensive loss for the period

-


-


(1,160)


2,220


(1,060)

 

Transfer of revaluation reserve relating to the depreciation of property, plant and equipment

-


(716)


-


716


-

 











 

Balance as at 30 June 2013

73,761


7,318


(22,805)


91,960


150,234

 

 

 

 



Distributable



 

The Company

Share capital


Retained earnings


Total/Net

 


USD'000


USD'000


USD'000

 







 

Balance as at 1 January 2012

58,298



(3,436)     


54,862    

Total comprehensive loss for the period

-



(223)     


(223)    

Balance as at 30 June 2012

58,298



(3,659)     


54,639    








Balance as at 1 January 2013

73,761



(3,940)     


69,821    

Total comprehensive loss for the period

-



(153)     


(153)    








Balance as at 30 June 2013

73,761



(4,093)     


69,668    

 

 

          


CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2013 (UNAUDITED)

 

 



The Group


The Company


 




6 months ended


6 months ended


 




30 June 2013


30 June 2012


30 June 2013


30 June 2012


 




USD'000


USD'000


USD'000


USD'000


 

 











 

OPERATING ACTIVITIES











 

Profit/(Loss) before tax



3,819


391


(153)


(223)


Adjustments for non-cash items



6,819


7,612


(62)


7













Operating Profit/(Loss) Before Working Capital Changes



10,638


8,003


(215)


(216)













 

(Increase)/ Decrease in:











 

Inventories



(5,352)


2,038


-


-


 

Trade and other receivables,

 


1,229


(3,844)


(7)


-

 

 

advances and prepaid expenses











 

Amount owing by subsidiary companies



-


-


(1,550)


213


 

Increase in:











 

Trade and other payables,



3,807


4,714


93


59


 

accrued and other liabilities











 












 

Cash Generated From/(Used In) Operations



10,322


10,911


(1,679)


56


 

Income tax paid



(687)


(518)


-


-


 

Interest paid



(2,267)


(1,784)


-


-


 












 

Net Cash Generated From/(Used In) Operating Activities



7,368


8,609


(1,679)


56


 












 












 

INVESTING ACTIVITIES











 

Purchase of property, plant and equipment



(4,766)


(1,755)


-


-


 

Purchase of non-current assets



(9,690)


(3,139)


-


-


 

Proceeds from short-term investment



5,998


-


-


-


 

Interest received



30


-


-


-


 












 

Net Cash Used In Investing Activities



(8,428)


(4,894)


-


-


 












 












 

FINANCING ACTIVITIES











 

Proceeds from borrowings



15,876


8,223


-


-


 

Repayment from borrowings



(23,600)


(4,107)


-


-


 












 

Net Cash (Used In)/From by Financing Activities



(7,724)


4,116


-


-


 












 

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS



(8,784)


7,831


(1,679)


56


 

EFFECTS OF FOREIGN EXCHANGE RATE CHANGES



(97)


(3)


-


-


 

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD



14,016


494


2,923


103


 












 

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD



5,135


8,322


1,244


159


 












 

 


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