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Steppe Cement Ltd (STCM)

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Wednesday 13 September, 2017

Steppe Cement Ltd

Interim Results

RNS Number : 4404Q
Steppe Cement Limited
13 September 2017
 

 

Steppe Cement Ltd

Interim Results for the Half Year 30 June 2017

and General Market Update

1. Interim Results

Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated loss after tax of USD0.3 million for the six months ended 30 June 2017.

 

 

6 months

ended

30 June 17

6 months

ended

30 June 16

% of change

Sales (Tonnes)

650,333

761,771

(15)%

Consolidated turnover KZT million

8,553

8,190

4%

Consolidated turnover (USD Million)

26.8

23.7

13%

Consolidated loss after tax (USD Million)

(0.3)

(1.5)

 

Loss per share (Cents)

(0.2)

(0.7)

 

Average exchange rate (USD/KZT)

319

342

 

 

·     The Company continued its strategy of focusing on price rather than volume until the summer and the sales volume decreased by 15% but turnover increased by 4% in KZT.

·     The average ex-factory price increased from 8,781 KZT/tonne to 11,147 KZT/tonne or 27% during the period.

·     Steppe Cement's gross margin increased from 22% to 25% in USD terms.

·     Selling expenses and administrative expenses were maintained relative to turnover reflecting partly the inflation in transportation cost.

·     The Kazakh Tenge continue to appreciate in the first half by 8% compared to the first half of 2016. The company booked foreign exchange gains of USD0.4 million in the first half of 2017 similar to the level in 1H2016.

·     The Company generated operating profit before working capital changes of USD4.9 million in 1H 2017 against USD2.8 million in 2016.

·     The Kazakhstan economy is expected to grow at 3.5% in 2017.

·     Reported inflation has been 5.6% until the end of August 2017. For the full 2016 inflation was 15.5%.

2. Production costs

·     Cement production costs per tonne increased by 17% in KZT partly because of the high inflation recorded in the second half of last year and partly as a reflection of fixed costs in lower volumes in the first half of 2017.

·     Volumes are recovering strongly in the second half of 2017 and we expect to contain cost per tonne increases.

3. Update on the Kazakh cement market

·     The Kazakh cement market remained stable during the first half of the year. Steppe Cement expects a market demand of about 9 million tonnes for the full year 2017 similar to 2016.

·     Steppe Cement decreased its local market share from 18% in 1H2016 to 15% in 1H2017. We expect to achieve 18% market share for the full year. Exports represented 10% of the volumes in the 1H2017 from 4% last year.

·     Imports into Kazakhstan have increased by 30% in 2017 to 0.26 million tonnes and they represent 6% of the market up from 5% last year.

·     Exports have increased from 0.16 million tonnes to 0.45 million tonnes in the first half of 2017.

·     Exports from Kazakhstan now represent 11% of local production up from 4% last year.

·     Overall production of all factories in Kazakhstan has increased by 5% to 4.2 million tonnes for the 1H2017.

·    Currently 74% of production in the country is coming from dry lines, similar to last year's level.

·     Road building activity as well as construction remains strong particularly in the west and south of the country.

4. Financing

The debt position of the company as of 30 June 2017 comprised:

·     A Halyk bank loan of USD4 million at 6% p.a. interest due in 2018.

·     A long-term USD9 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 1.45 billion Kazakh Tenge 10% bond outstanding for redemption in November 2017.

·     A loan of KZT1.688 million with Halyk Bank JSC subsidised by the government for capital investment at 6%.

·     We have maintained KZT4.9 billion of available working capital lines from Halyk Bank, Altyn Bank and VTB Bank. The current rates are 6% p.a. in USD and 12% p.a. in KZT. As of 30 June 2017 we have the equivalent of USD7 million outstanding from these working capital loans and by the end of August 2017 they have all been repaid.

As of 31 August 2017, total bank debt net of cash amounts to USD20 million of which 65% is denominated in USD and the balance in KZT

A new loan of 580 million KZT was signed in July 2017 to fund a new packing plant to be installed near the dry lines. The loan carries a 6% interest in KZT and is repayable in 7 years with one-year grace. The loan will be drawn until August 2018.

The unaudited condensed consolidated statements of profit and loss, comprehensive income, financial position, changes in equity and cash flow follow. A copy of 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 PERIOD ENDED 30 JUNE 2017 (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 PERIOD ENDED 30 JUNE 2017 (UNAUDITED)

 

 

 

 

The Group

 

The Company

 

 

6 months ended

 

6 months ended

 

 

30 June 2017

 

30 June 2016

 

30 June 2017

 

30 June 2016

 

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

 

 

 

Revenue

 

26,839

 

23,722

 

50

 

50

 

 

 

 

 

 

 

 

 

Cost of sales

 

(20,050)

 

(18,388)

 

-

 

-

 

 

 

 

 

 

 

 

 

Gross profit

 

6,789

 

5,334

 

50

 

50

 

 

 

 

 

 

 

 

 

Selling expenses

 

(4,145)

 

(3,891)

 

-

 

-

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

expenses

 

(2,195)

 

(2,200)

 

(138)

 

(114)

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

 

449

 

(757)

 

(88)

 

(64)

Interest income

 

16

 

5

 

^

 

-

Finance costs

 

(1,310)

 

(1,468)

 

-

 

-

Net foreign exchange gain/(loss)

 

572

 

368

 

47

 

97

Other income, net

 

278

 

150

 

-

 

-

 

 

 

 

 

 

 

 

 

Profit/(Loss) before income tax

 

5

 

(1,702)

 

(135)

 

33

 

 

 

 

 

 

 

 

 

Income tax (expense)/credit

 

(346)

 

223

 

-

 

-

 

 

 

 

 

 

 

 

 

(Loss)/Profit for the period

 

(341)

 

(1,479)

 

(135)

 

33

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

Shareholders of the Company

 

(341)

 

(1,479)

 

(135)

 

33

 

 

 

 

 

 

 

 

 

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted (cents)

 

(0.2)

 

(0.7)

 

 

 

 

 

^ Insignificant amount.

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2017 (UNAUDITED)

 

 

 

 

The Group

 

The Company

 

 

 

6 months ended

 

6 months ended

 

 

 

30 June 2017

 

30 June 2016

 

30 June 2017

 

30 June 2016

 

 

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

 

 

 

 

 

(Loss)/Profit for the period

 

(341)

 

(1,479)

 

(135)

 

33

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Item that may be reclassified subsequently to profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences arising on translation of foreign subsidiary companies

 

2,453

 

46

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Total other comprehensive income for the period

 

2,453

 

46

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income/(loss) for the period

 

2,112

 

(1,433)

 

(135)

 

33

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

Shareholders of the Company

 

2,112

 

(1,433)

 

(135)

 

33

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2017 (UNAUDITED)

 

 

 

 

     The Group

 

The Company

 

 

 

Unaudited

 

Audited

 

Unaudited

 

Audited

 

 

 

30 June 2017

 

31 Dec 2016

 

30 June 2017

 

31 Dec 2016

 

 

 

USD'000

 

USD'000

 

USD'000

 

USD'000

Assets

 

 

 

 

 

 

 

 

 

Non-Current Assets:

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

71,695

 

71,887

 

-

 

-

Investment in subsidiary companies

 

 

-

 

-

 

26,500

 

26,500

Advances and prepaid expenses

 

 

132

 

459

 

-

 

-

Other assets

 

 

965

 

1,439

 

-

 

-

Deferred taxes

 

 

-

 

47

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Total Non-Current Assets

 

 

72,792

 

73,832

 

26,500

 

26,500

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

Inventories

 

 

18,517

 

16,162

 

-

 

-

Trade and other receivables

 

 

4,929

 

3,169

 

-

 

-

Income tax receivable

 

 

605

 

505

 

-

 

-

Loans and advances to subsidiary companies

 

 

-

 

-

 

39,622

 

39,710

Advances and prepaid expenses

 

 

3,006

 

1,077

 

20

 

9

Cash and cash equivalents

 

 

1,753

 

1,023

 

130

 

74

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

 

28,810

 

21,936

 

39,772

 

39,793

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

101,602

 

95,768

 

66,272

 

66,293

 

 

 

 

            The Group

 

The Company

 

 

 

Unaudited

 

Audited

 

Unaudited

 

Audited

 

 

 

30 June 2017

 

31 Dec 2016

 

30 June 2017

 

31 Dec 2016

 

 

 

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

 

 

2,865

 

3,062

 

-

 

-

Translation reserve

 

 

(104,532)

 

(106,985)

 

-

 

-

Retained earnings/ (Accumulated loss)

 

 

88,059

 

88,203

 

(8,589)

 

(8,454)

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

60,153

 

58,041

 

65,172

 

65,307

 

 

 

 

 

 

 

 

 

 

Non-Current Liabilities

 

 

 

 

 

 

 

Borrowings

 

 

14,341

 

15,453

 

-

 

-

Deferred taxes

 

 

245

 

-

 

-

 

-

Deferred income

 

 

1,555

 

1,525

 

-

 

-

Provision for site restoration

 

 

65

 

59

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Total Non-Current Liabilities

 

 

16,206

 

17,037

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

 

 

-

 

-

Accrued and other liabilities

 

 

5,073

 

1,918

 

1,100

 

986

Borrowings

 

 

 

 

-

 

-

Taxes payable

 

 

265

 

230

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

25,243

 

20,690

 

1,100

 

986

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

41,449

 

37,727

 

1,100

 

986

 

 

 

 

 

 

 

 

 

 

Total Equity and Liabilities

 

 

101,602

 

95,768

 

66,272

 

66,293

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2017 (UNAUDITED)

 

 

 

 

 

Non-distributable

 

 

 

Distributable

 

 

The Group

Share capital

 

Revaluation reserve

 

Translation reserve

 

Retained earnings

 

Total

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

 

 

 

 

Balance as at 1 January 2017

73,761

 

3,062

 

(106,985)

 

88,203

 

58,041

Loss for the period

-

 

-

 

-

 

(341)

 

(341)

Other comprehensive income

-

 

-

 

2,453

 

-

 

2,453

Total comprehensive income/(loss) for the period

-

 

-

 

2,453

 

(341)

 

2,112

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

-

 

(197)

 

-

 

197

 

-

 

 

 

 

 

 

 

 

 

 

Balance as at 30 June 2017

73,761

 

2,865

 

(104,532)

 

88,059

 

60,153

 

 

 

 

 

Non-distributable

 

 

 

Distributable

 

 

The Group

Share capital

 

Revaluation reserve

 

Translation reserve

 

Retained earnings

 

Total

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

 

 

 

 

Balance as at 1 January 2016

73,761

 

3,443

 

(108,124)

 

87,646

 

56,726

Loss for the period

-

 

-

 

-

 

(1,479)

 

(1,479)

Other comprehensive income

-

 

-

 

46

 

-

 

46

Total comprehensive (loss)/income for the period

-

 

-

 

46

 

(1,479)

 

(1,433)

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

-

 

(187)

 

-

 

187

 

-

 

 

 

 

 

 

 

 

 

 

Balance as at 30 June 2016

73,761

 

3,256

 

(108,078)

 

86,354

 

55,293

 

 

 

 

 

 

 

 

The Company

Share capital

 

Accumulated losses

 

Total

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

Balance as at 1 January 2017

73,761

 

(8,454)

 

65,037

Total comprehensive loss for the period

-

 

(135)

 

(135)

Balance as at 30 June 2017

73,761

 

(8,589)

 

65,172

 

 

 

 

 

 

Balance as at 1 January 2016

73,761

 

(8,428)

 

65,333

Total comprehensive loss for the period

-

 

33

 

33

Balance as at 30 June 2016

73,761

 

(8,395)

 

65,366

 

 

      

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 30 JUNE 2017 (UNAUDITED)

 

 

 

 

 

The Group

 

The Company

 

 

 

6 months ended

 

6 months ended

 

 

 

30 June 2017

 

30 June 2016

 

30 June 2017

 

30 June 2016

 

 

 

USD'000

 

USD'000

 

USD'000

 

USD'000

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Profit/(Loss) before income tax

 

 

5

 

(1,702)

 

(135)

 

33

Adjustments for non-cash items

 

 

4,898

 

4,509

 

47

 

(93)

 

 

 

 

 

 

 

 

 

 

Operating Profit/(Loss) Before Working Capital Changes

 

 

4,903

 

2,807

 

(88)

 

(60)

 

 

 

 

 

 

 

 

 

 

(Increase)/ Decrease in:

 

 

 

 

 

 

 

 

 

Inventories

 

 

(1,741)

 

301

 

-

 

-

Trade and other receivables,

 

 

(2,878)

 

(838)

 

(11)

 

(11)

advances and prepaid expenses

 

 

 

 

 

 

 

 

 

Loans and advances to subsidiary companies

 

 

-

 

-

 

88

 

119

Increase/(Decrease) in:

 

 

 

 

 

 

 

 

 

Trade and other payables,

 

 

1,234

 

959

 

67

 

(278)

accrued and other liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Generated From/(Used In) Operations

 

 

1,518

 

3,229

 

56

 

(230)

Income tax paid

 

 

(51)

 

(80)

 

-

 

-

Interest paid

 

 

(1,303)

 

(1,389)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Net Cash Generated From/(Used In) Operating Activities

 

 

164

 

1,760

 

56

 

(230)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(740)

 

(3,410)

 

-

 

-

Purchase of other assets

 

 

(32)

 

(34)

 

-

 

-

Interest received

 

 

16

 

5

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Net Cash Used In Investing Activities

 

 

(756)

 

(3,439)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

13,611

 

13,618

 

-

 

-

Repayment from borrowings

 

 

(12,319)

 

(11,854)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Net Cash Generated From Financing Activities

 

 

1,292

 

1,764

 

-

 

-

 

 

 

 

 

 

 

 

 

 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

700

 

85

 

56

 

(230)

EFFECTS OF FOREIGN EXCHANGE RATE CHANGES

 

 

30

 

4

 

-

 

-

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD

 

 

1,023

 

2,406

 

74

 

338

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD

 

 

1,753

 

2,495

 

130

 

108

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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