| Date | Subject |
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23/7/2021
09:51 | lauders: Joined you all the other day. Have been watching STCM and MBO but chose STCM in the end based on the great yield and potential long term growth. Like the lack of debt and needed something a bit more reliable that pays me some income while I waited. Most of my other holdings are no income companies and perhaps just a bit too erratic when it comes to the share price. Will consider adding dividends and profits (when/if I make any and sell to release them) into more STCM too, depending on price/performance.
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21/7/2021
18:59 | xenomorph1: Yes Gary i had a quick look on all of them. Ofc i didnt read Financial reports etc, but in just 5 minutes I saw loss in last year, i saw big loans also. STCM has none of those. Loan "free" (some will argue but if u have more cash than loan, you ARE loan free in practice ) and better p/e, lower book value...everything is better at STCM. Just to remind you i sold several days ago and now im back in with less shares.
They have solid yield but they are not as safe play as STCM. Regards,
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21/7/2021
17:45 | xenomorph1: You cant rly compare those companies with STCM. STCM has net positiven balance, and other are full with loans, loss for the year.... Also, STCM has p/e of around 8-9, with great payout ratio.... others are way higher that that. So the least riskier is STCM if you want a dividend play.
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07/7/2021
15:16 | wilo101: Steppe Cement's (Buy; 12mo
TP 54 GBp; ETR 15%) trading update for 1H21 showed the
continuing strong trends, which support our positive view on the stock. The company's
s a l e s v o l u m e s i n c r e a s e d 1 0 % Y o Y t o 8 4 0 , 6 6 1 t o n n e s i n 1 H 2 1 , w h i c h , a l o n g
with higher prices, translated into revenues rising 17% YoY to USD 39mn, according to our
estimates. These trends imply slight upside risks for our FY21 forecasts and bode well for
future dividend distributions.
Steppe Cement’s 2Q21 sales volumes amounted to 575,105 tonnes, up 9% YoY. According to our
estimates, the 2Q21 average exworks
price was up 13% YoY to KZT 17,496/t, while in USD terms
the price increased 11% YoY to USD 41/t (vs. USD 35/t in 1Q21).
According to Steppe Cement, the market remained strong in 1H21, with cement demand increasing
25% YoY. Steppe Cement's market share was 14.3% in 1H21 vs. 16.5% in 1H20. We do not see
this decrease of the share as a reason for concern, given the strong market and some recent
capacity additions in Kazakhstan. Moreover, we note that Steppe Cement's 2Q21 sales represented
the highest volumes sold during the second quarter in the company's history. Exports accounted for
8.5% of total sales.
Our projections imply that Steppe Cement’s 2021F revenues will rise 12% YoY to USD 84mn, with
volumes increasing 8% YoY to 1.78mn tonnes. Based on the 1H21 trends, we see potential upside
risks to these projections. We also note that strong pricing trends bode well for profitability and
support the strong outlook for the dividend distribution.
Steppe Cement (STCM LN, GBp)
Buy (21 Sep 2016, 12:24 UTC) // Previous: Hold (14 Jul 2016, 13:01 UTC)
Target price, 12mo: 54.00 // Price: 51.00 // Upside: 6% // DY: 9.1% // ETR, 12mo: 15%
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10/6/2021
11:18 | wilo101: Steppe Cement
2020; no surprises, solid outlook
Steppe Cement’s 2020 results did not produce any major surprises,
although the announced FY20 dividend of GBp 2.5 (4.8% yield) was
below our projection (GBp 4). This potential dividend disappointment
might have been behind Steppe Cement’s price decline of 10% on
Monday. However, we think that such a dividend was due to technical
limitations, while Steppe Cement remains committed to maximising
distributions. The positive market trends and cash availability point to a
strong case for higher dividends. Having updated our model, we are
increasing our 12-month Target Price 15% YoY to GBp 54 (ETR of 25%,
including a 10% DY over the next 12 months). Buy reiterated.
FY20: good numbers. While Steppe Cement had already disclosed its 2020
revenues of USD 75mn (down 6% YoY), its FY20 EBITDA of USD 23mn was
down 4% YoY (6% below our estimate). Meanwhile, net profit increased 15%
YoY to USD 11mn and exceeded our expectations by 2%. Net debt stood at
USD 2.5bn as of the end of 2020 vs. USD 7.8mn at the end of 2019 and our
forecast of USD 6.4mn. This implies net debt/EBITDA of just 0.1x.
FY20 DPS: below expectations, but hardly a policy shift. Steppe
Cement’s FY20 DPS of GBp 2.5 is notably below our expectations of GBp 4
(the company also paid an interim dividend of GBp 1 in November 2020).
From the cash availability perspective, the FY20 DPS could have been
higher, we think. However, the decision was likely impacted by technical
intracompany limitations. Nevertheless, we think that Steppe Cement
remains committed to distribute all excess cash as dividends. Given the
positive current trends and outlook, we expect the interim and FY21 dividend
to exceed the 2020 levels.
Forecast revisions. We think that the outlook for cement demand in
Kazakhstan remains favourable. We forecast that cement consumption will
increase 6% YoY to 9.9mt in 2021F, partly underpinned by the government
programmes aimed at boosting residential construction. In particular, the
government is targeting an increase in residential completions of 11% YoY to
17mn sqm in 2021 (after the 17% YoY growth to 15.3mn in 2020). We also
note that Kazakhstan’s average cement prices rose 6% YoY to KZT 18,854/t
as of May, according to the National Statistics Bureau. These trends underpin
our forecast revisions. We increased our revenue forecasts 6-7% YoY and
EBITDA projections 7-10% YoY. We now expect Steppe Cement’s revenues
and EBITDA to increase at 2020-25F CAGRs of 3% and 4%, respectively.
Valuation and risks. We derive our 12-month Target Price from a DCF
model (WACC 13.8%, TGR 0%). We reduced the discount rate from 15% to
13.8% to reflect the lower cost of debt for Steppe Cement. The key downside
risks are lower dividends, ‘irrational217; pricing by competitors, and potential
overcapacity in Kazakhstan and the neighbouring countries, as well as the
overall macro environment and cement market trends.
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08/6/2021
18:18 | king suarez: Hi Aleman,
My argument is that your $2.7m net debt improvement actually becomes $3.5m if you exclude the ($0.8m) FX loss on bank deposits (which isn't really a cash movement, just a translation of foreign denominated deposits into USD unfavorably due to exchange rate movements in year - could easily work in our favour in future).
So, all else equal, the company has/had $3.5m headroom above the $11.5m (4p) dividend paid. On top of that is the extra $1m paid in tax v the tax charge for 2020 (perhaps just a one-off due to temporarily lowered tax because of Covid though?).
Looking at the 2021 final dividend, with the current exchange rate it is looking like each penny dividend costs c$3m, so you take that $3.5m in a year in which debt has been reduced to zero and you have another penny to add to the 4p that was paid in 2020 - and that is without any output/efficiency improvements that the Capex should bring.
It seems to me that with only a 3.5p FY 2021 dividend (perhaps?) and the additional debt taken on at year end and in February, there is a lot of headroom for capex spending, so it will be interesting to see what can be achieved with that this year. Alternatively, we might see the interim dividend bumped up a little..
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08/6/2021
17:55 | aleman: KS - My apologies. I somehow managed to quote the one bit where they switched into Sterling as $s. 4p on 219m shares is £8.8m, to confirm. You correctly point out that dividends paid in dollars were $11.5m. As net debt still falls $2.7m, that's still $2.7m that was left over after funding the dividend, though as a % of the dividend, that headroom is a bit smaller than in my original mistake. Your point about forex changes meaning that headroom might not be as great is interesting. I'll have to think about that. I do find accounts from companies in foreign currencies that translate into $s rather than £s take a bit longer to get my head around. Thanks.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
Dividends paid
During the year, the Company paid a first and final dividend of GBP0.03 (2018: GBP0.03) per ordinary share of no par value each amounting to GBP6,570,000 (USD8,678,970) in respect of financial year ended 31 December 2019 (2018: GBP6,570,000 (USD8,389,233)).The Company also declared and paid an interim dividend of GBP0.01 amounting to GBP2,190,000 (USD2,830,356) during the year. No interim dividend was declared in the previous financial year.
Dividends proposed after reporting period
The board of directors of the Company proposed a final dividend of GBP0.025 per ordinary share of no par value each amounting to GBP5,475,000 (USD7,472,828) in respect of the financial year ended 31 December 2020. The proposed dividend is subject to approval by the shareholders of the Company at the forthcoming Annual General Meeting, and if approved, will be accounted for in equity during the financial year ending 31 December 2021. The dividends have not been recognised as a liability as at 31 December 2020.
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08/6/2021
16:45 | aleman: From statement of cashflows on Page 43:
Cash and equivalents fell from $9.0m to $8.2m while borrowings fell from $10.3m to $6.8m - so I make net debt of $1.3m became net cash of $1.4m, and improvement of $2.7m (or thereabouts as rounding might move that marginally).
Note 19 indicates that happened while paying $6.6m and $2.2m in dividends of 3p and 1p (in July and November), so $8.8m was spent on dividends as the net debt/cash position improved by $2.7m.
H ttp://www.steppecement.com/images/pdf/stcm_ar_2020_web.pdf
So the 4p of dividends paid seemed well enough covered by cashflow. The Q1/2021 update that preceded these results sounded pretty strong, so one would hope H1/2020 is going to be rather better than H1/2020. Given a flagged increase in capex spend, will that allow a dividend rise or not for the full financial year? Well, a slight reduction to 2.5p for the 2020 final is going to be paid in July(?) . We'll just have to see if net cash continues to increase and allow a higher interim to be paid in November.
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13/4/2021
13:17 | wilo101: 13 April 2021 Change of TP
Prices cited in the body of this report are as of the last close before, or the close on, 12 Apr 2021 (except where indicated
otherwise). VTB Capital analysts update their recommendations periodically as required. This research report was prepared by
the analyst(s) named above who is(are) associated with JSC VTB Capital and is distributed by JSC VTB Capital and VTB Capital
PLC and their non-U.S. affiliates outside the United States. This VTB Capital research report is distributed to investors located
within United States by Xtellus Capital Partners, Inc. (“Xtellus̶1;) as a “third-party research report” as defined in Rule 2241(a)(14)
and Rule 2242(a)(17) of the U.S. Financial Industry Regulatory Authority. Please refer to the Disclosures section of this report for
other important disclosures, including the analyst certification and information required by regulation. Equities
Steppe Cement, ord. (STCM LN, GBp)
Buy (21 Sep 2016, 12:24 UTC)
Previous: Hold (14 Jul 2016, 13:01 UTC)
Target price, 12mo: 47.00
Last price: 38.00 (12 Apr 2021, close)
Expected total return: 37%
Upside, 12mo: 24%
DY, next 12mo: 13.2%
Share price performance, 12-mo
1M 3M 12M 3Y
Price 4% 23% 104% 93%
Price relative 10% 28% 65% 52%
ADTV (USD mn) 0.13 0.11 0.09 0.09
Key financial highlights
Fiscal year end 12/19 12/20F 12/21F 12/22F
P/E, x 8.6x 6.9x 8.3x 8.1x
EV/EBITDA, x 3.8x 3.3x 4.3x 4.2x
P/B, x 1.3x 1.2x 1.9x 1.9x
FCF yield, % 17.9% 17.8% 15.6% 15.3%
DY (ords), % 10.8% 20.0% 13.2% 13.2%
Net sales, USD mn 80 75 78 79
EBITDA, USD mn 24 25 27 27
Net income, USD mn 10 11 14 14
Net sales, chg -3% -6% 5% 1%
EBITDA, chg 15% 2% 10% -1%
Net income, chg 7% 12% 27% 2%
EPS(ords), USD 0.044 0.050 0.063 0.064
DPS (ord.), USD 0.04 0.07 0.07 0.07
BPS(ords), USD 0.29 0.28 0.28 0.28
EBITDA margin, % 30.1% 32.8% 34.5% 33.6%
ROE, % 15% 18% 23% 24%
Net Debt, USD mn 8 6 2 (1)
ND/EBITDA, x 0.3x 0.3x 0.1x 0.0x
Net int. cover, x 7.2x 8.7x 11.9x 12.1x
Multiples and yields are calculated based on period-average prices
where available.
Source: Bloomberg, Company data, VTB Capital Research
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Apr May Jun Jul Aug Sep Oct Nov Dec Jan FebMar
STCM LN, GBp, lhs
Relative to RTS Index, %, rhs
Steppe Cement
Generating hefty dividend yields for
shareholders
Steppe Cement is an attractive dividend payer, in our view. The positive
cement market environment in 2020 and 1Q21 (and outlook for FY21),
limited capex requirements, low leverage, solid profitability and good
cash generation imply that the company’s FY20 DPS (payable July)
could reach GBp 4 (11% yield), with an additional interim DPS of GBp 1
(3% yield) to be distributed in the autumn. This makes Steppe Cement
attractive for value investors with sufficient tolerance for low liquidity,
we think. Having updated our model, we are increasing our 12-month
Target Price 18% to GBp 47, which implies an ETR of 37%: Buy
reiterated.
Solid trends in seasonally weak first quarter. Steppe Cement’s 1Q21
cement sales increased 13% YoY to 265,556t, while ex-works prices were up
11% YoY to KZT 14,568/t (up 3% YoY to USD 35/t). Delivered prices were
8% higher YoY to KZT 18,384/t. We think that the slower growth of delivered
prices was due to some decrease of average transportation distances.
Steppe Cement’s 1Q21 revenues increased 22% YoY to 4,882mn (up 13%
YoY to USD 12mn). According to the company, Kazakhstan’s cement market
increased 12% YoY in 1Q21, with the company increasing its share from
12.6% in 1Q20 to 13.2% in 2Q21. We think that these price and volume
trends in the seasonally weak quarter augur well for 2021.
Forecast revisions. We have updated our forecast to take into account
Steppe Cement’s strong operating performance in 2020 and 1Q21. This
resulted in our 2020-25F revenue forecasts increasing 5-6%, while our
EBITDA projections rose 17-35%. In the longer-term, our forecast implies
relatively flat performance, but this is still likely to be sufficient to distribute
hefty dividends and generate high yields for shareholders, we think.
Hefty dividends on the cards. Steppe Cement distributed GBp 1 as an
interim dividend in November 2020. While previously we had assumed only
annual dividends, we are now switching to modelling both interim and fullyear
dividends. Based on the company’s record of distributing excess cash to
shareholders and our forecasts of its cash flows, we assume that in the
coming years Steppe Cement will be distributing GBp 4 per share as a fullyear
dividend and GBp 1 per share as an interim dividend. Such forecasts
imply a 13% dividend yield over the next 12 months, which, along with an
undemanding valuation, underpins our positive view on the stock.
Valuation and risks. We derive our 12-month Target Price from a DCF
model (WACC 15%, TGR 0%). The key downside risks are lower dividends,
‘irrational217; pricing by competitors, potential overcapacity in Kazakhstan and
the neighbouring countries, as well as the overall macro environment and
cement market trends.
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07/8/2020
09:26 | constable ken: "Contrary to majority of companies who are reducing or completely halting dividend payments, STCM has raised its dividend."
Two lies.
1. The majority of companies have not reduced or halted dividends. This page lists 449 such companies, out of well over 2,000 listed on the LSE.
Https://dividenddata.co.uk/dividend-cuts.py?market=alldividends
2. STCM has kept its dividend at 3p, the same as last year.
The first lie may be careless rhetoric, but Mattjos is certainly aware that STCM did not raise its dividend this year. I suppose he'll say "oh but it raised it some other year, in the past". Balls. You're talking about this year, in the context of other companies cutting dividends.
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PLUS1
