Interim Results

RNS Number : 8476L

Steppe Cement Limited

10 September 2012

 



10 September 2012

Steppe Cement Ltd

Interim Results for the Half Year 30 June 2012

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement" or the "Company") posted a consolidated loss after tax of USD0.1 million for the six months ended 30 June 2012.

	6 months ended 30 June 12	6 months ended 30 June 11	% change
Sales (Tonnes)	615,838	601,099	2.5%
Consolidated turnover (USD Million)	52.2	43.0	21.4%
Consolidated loss after tax (USD Million)	(0.1)	(2.2)
Loss per share (Cents)	(0.1)	(1.3)
Average exchange rate (USD/KZT)	148	146

·     Sales increased by 23% in Tenge ("KZT") while volumes increased by 2%. The average sales price increased from USD72/tonne to USD86/tonne during the period.

·     Production costs per tonne increased by 11% in USD. The increase is due to higher electricity, transportation and coal costs partly offset by productivity increases. The number of employees declined from 1,049 to 1,036 as at the end of June 2012 despite the increase in production.

·     Selling expenses have grown on a per tonne basis by 19% mostly due to the increase in wagons rental rates.

·     General and administrative expenses increased by 15% during the period partly due to the organization of works for line 5.

·     Steppe Cement generated USD8.6 million cash from operations in the 1H 2012 while managing to maintain inventories that will allow us to increase sales significantly during the second half of 2012.

·     The KZT has slightly depreciated during the last 12 months and currently stands at about 149KZT to 1USD. 

·     The Kazakhstan economy is expected to grow at 5-6% in 2012.

2. Update on the Kazakh cement market

·     The Kazakhstan cement market increased by 16% during the first half of the year. Steppe Cement expects a market of 6.8 million tonnes for the full year 2012, an increase of 9.7% compared to the 6.2 million tonnes in 2011.

·     Prices are expected to increase in the 2H of 2012 when compared to the 1H of 2012.

·     Overall local production has increased by 20% in the first half of 2012 compared to 2011 while the share of the imported cement decreased from 17% to 14%.

·     Steppe Cement's market share decreased from 21% in 1H2011 to 19% in 1H2012 but Steppe Cement expects it to be around 20% for the full year 2012.

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

·     There have been no new entrants in the market and the two factories that started in 2011 have ramped up capacity during the summer to cover increased demand.

3. Production and refurbishment progress

·     Dry line 6 production has increased by 24% when compared to last year while the wet lines production has decreased.

·     For the full year 2012 the volumes from the dry line are expected to reach 57% of total production.

·     The works on line 5 continue as we are taking advantage of the positive cash flows after fulfilling our financial obligations.

4. Financing

·     Steppe Cement continues to explore financing options from multilateral institutions as well as a potential bond issue in the local Kazakhstan Stock Market to finance the completion of line 5.

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 is RFC Ambrian Limited.

Contact Stephen Allen or Trinity McIntyre at [phone].

SUMMARY OF INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2012 (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 2012 (UNAUDITED)

		The Group				The Company
		6 months ended				6 months ended
		30 June 2012		30 June 2011		30 June 2012		30 June 2011
		USD'000		USD'000		USD'000		USD'000
Revenue		52,155		43,059		50		50
Cost of sales		(34,099)		(30,757)		-		-
Gross profit		18,056		12,302		50		50
Selling expenses		(9,653)		(7,886)		-		-
General and administrative
expenses		(5,242)		(4,573)		(264)		(261)
Operating income/(loss)		3,161		(157)		(214)		(211)
Investment income		-		17		-		-
Finance costs		(2,268)		(2,673)		-		-
Other expense, net		(502)		(25)		(9)		(19)
Profit/(Loss) before income tax		391		(2,838)		(223)		(230)
Income tax (expense)/credit		(500)		600		-		-
Loss for the period		(109)		(2,238)		(223)		(230)
Attributable to:
Shareholders of the Company		(109)		(2,238)		(223)		(230)
Loss per share:
Basic (cents)		(0.1)		(1.3)

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)

		The Group				The Company
		6 months ended				6 months ended
		30 June 2012		30 June 2011		30 June 2012		30 June 2011
		USD'000		USD'000		USD'000		USD'000
Loss for the period		(109)		(2,238)		(223)		(230)
Other comprehensive (loss)/income:
Exchange differences arising on translation of foreign subsidiary companies		(899)		1,357		-		-
Total comprehensive loss for the period		(1,008)		(881)		(223)		(230)
Attributable to:
Shareholders of the Company		(1,008)		(881)		(223)		(230)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2012 (UNAUDITED)

		The Group					The Company
			Unaudited		Audited		Unaudited		Audited
			30 June 2012		31 Dec 2011		30 June 2012		31 Dec 2011
			USD'000		USD'000		USD'000		USD'000
Assets
Non-Current Assets:
Property, plant and equipment			130,743		134,761		-		-
Investment in subsidiary companies			-		-		26,500		26,500
Advances paid			906		993		-		-
Other assets			31,169		28,162		-		-
Total Non-Current Assets			162,818		163,916		26,500		26,500
Current Assets
Inventories, net			20,703		21,373		-		-
Trade receivables, net			5,303		2,582		-		-
Amount owing by subsidiary companies			-		-		28,939		29,151
Other receivables, advances and prepaid expenses			11,325		11,391		-		-
Cash and bank balances			8,322		494		159		103
Total Current Assets			45,653		35,840		29,098		29,254
Total Assets			208,471		199,756		55,598		55,754

	The Group					The Company
		Unaudited		Audited		Unaudited		Audited
		30 June 2012		31 Dec 2011		30 June 2012		31 Dec 2011
		USD'000		USD'000		USD'000		USD'000
Equity and Liabilities
Capital and Reserves
Share capital		58,298		58,298		58,298		58,298
Revaluation reserve		8,751		9,477		-		-
Translation reserve		(20,908)		(20,009)		-		-
Retained earnings/ (Accumulated loss)		79,838		79,221		(3,659)		(3,436)
Total Equity		125,979		126,987		54,639		54,862
Non-Current Liabilities
Loans		37,160		43,212		-		-
Deferred tax liabilities		6,617		6,176		-		-
Total Non-Current Liabilities		43,777		49,388		-		-
Current liabilities
Trade payables		6,481		7,841		-		-
Other payables and accrued liabilities		9,665		3,661		959		892
Loans		22,206		11,435		-		-
Taxes payable		363		444		-		-
Total Current Liabilities		38,715		23,381		959		892
Total Liabilities		82,492		72,769		959		892
Total Equity and Liabilities		208,471		199,756		55,598		55,754

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)

 

			Non-distributable						Distributable
The Group	Share capital		Share Premium		Revaluation reserve		Translation reserve		Retained earnings			Total/Net
	USD'000		USD'000		USD'000		USD'000		USD'000			USD'000
Balance as at 1 January 2011	58,298		-		10,940		(18,944)			74,425			124,719
Loss for the period	-		-		-		-			(2,238)			(2,238)
Exchange differences arising on   translation of foreign subsidiary companies	-		-		-		1,357			-			1,357
Total comprehensive income/(loss) for the period	-		-		-		1,357			(2,238)			(881)
Balance as at 30 June 2011	58,298		-		10,940		(17,587)			72,187			123,838

 

			Non-distributable							Distributable
The Group	Share capital		Share Premium		Revaluation reserve		Translation reserve					Retained earnings			Total/Net
	USD'000		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)
Depreciation transfer on revaluation reserve	-		-		(726)		-				726				-
Balance as at 30 June 2012	58,298		-		8,751		(20,908)				79,838				125,979

 

			Non-distributable		Distributable
The Company	Share capital		Share Premium		Retained earnings			Total/Net
	USD'000		USD'000		USD'000			USD'000
Balance as at 1 January 2011	58,298		-			(3,038)			55,260
Total comprehensive loss for the period	-		-			(230)			(230)
Balance as at 30 June 2011	58,298		-			(3,268)			55,030
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

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2012 (UNAUDITED)

		The Group					The Company
		6 months ended					6 months ended
		30 June 2012		30 June 2011			30 June 2012				30 June 2011
		USD'000		USD'000			USD'000				USD'000
OPERATING ACTIVITIES
Profit/(Loss) before tax		391		(2,838)			(223)				(230)
Adjustments for non-cash items		7,612		6,621			7				-
Operating Profit/(Loss) Before Working Capital Changes		8,003		3,783			(216)				(230)
(Increase)/ Decrease in:
Inventories		2,038		1,411			-			-
Trade receivables		(2,720)		(414)			-			-
Other receivable and prepaid expenses		(1,124)		(1,399)			-			1
Amount owing by subsidiary companies		-		-			213			(350)
Increase/ (Decrease) in:
Trade payables		(1,421)		1,531			-			-
Other payables and accrued liabilities		6,135		4,840			59			106
Cash Generated From/(Used In) Operations		10,911		9,752			56				(473)
Income tax paid		(518)		(107)			-				-
Interest paid		(1,784)		(2,343)			-				-
Net Cash Generated From/(Used In) Operating Activities		8,609		7,302			56				(473)
INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment		-		-			-				-
Purchase of property, plant and equipment		(1,755)		(280)			-				-
Purchase of non-current assets		(3,139)		(162)			-				-
Interest received		-		17			-				-
Net Cash Used In Investing Activities		(4,894)		(425)			-				-
FINANCING ACTIVITIES
Proceeds from borrowings		8,223		6,171			-				-
Repayment from borrowings		(4,107)		(2,910)
Net Cash From by Financing Activities		4,116		3,261			-				-
NET INCREASE/(DECREASE)/ IN CASH AND CASH EQUIVALENTS		7,831		10,138			56				(473)
EFFECTS OF FOREIGN EXCHANGE RATE CHANGES		(3)		85			-				-
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		494		9,532			103				964
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD		8,322		19,755			159				491

 

END

 

 

IR BKKDPBBKKFCD