Steppe Cement Share Discussion Threads

[king suarez] 11/1/2023 10:39

Done a little 'analysis' (reading through prior statements):

As far as I can make out, STCM are increasing selling prices pretty much inline with official inflation (rates I found here):



For H2 2022 sales prices were up from 19.8k kzt/tonne to 23.6k kzt/tonne, a 19.3% increase on H1 2021. Official inflation was 14.5% as at June 2022 (probably why H1 2022 was a record first half? for profitability for the company - at least in the last few years).

FY 2022 infation was 20.3% and prices have increased from 23.6k kzt/tonne to 25.0k kzt/tonne between H2 2022 and Q4 2022 average, which is a 5.9% average increase. Inflation has gone from 14.5% to 20.3% from June to December, which is a 5.8% increase.

I therefore don't see any particular concerns as STCM are upping prices in line with costs. The Q4 production/sales was a little down on prior year, presumably impacted by the weather and rail issues highlighted in the update.

FY revenue looks to be $86.8m, v HY 2022 of $43.1m, which is only a v marginal increase, despite the 5.8% increase in selling prices in H2 2022. If I apply 5.8% inflation to H2 2022 costs then H2 pre-tax profits come in slightly below H1 2022 ($10.6m v $11.8m).

It is worth highlighting the tradjectory here though:

H1 2020 - PBT $4.5m
H2 2020 - PBT $8.5m
H1 2021 - PBT $7.6m
H2 2021 - PBT $13.4m
H1 2022 - PBT $11.8m
H2 2022 - PBT $10.6m (my est)

Forecasting FY 2022 PBT of $22.4m v FY 2021 $21m and FY 2020 $13m.

If right, I am pretty happy with that and if the capex can continue to improve efficiencies then divi should be easily covered for 2023?

[drdre] 11/1/2023 10:19

The fact Kaz need to import cement is surely a positive sign too? Well run business, growing mkt share, in an economy that isnt in a death spiral. Plus 10%+ dividend. Gift horse, mouth comes to mind.

[wilo101] 11/1/2023 10:12

Time to accumulate, buy and add, the 2022 dividend is in the bag already.

[mattjos] 11/1/2023 10:04

really not sure the update warranted such a large sell off - the entire world is grappling with inflation just now.
They've just told us that they have increased their local market share & are running pretty much flat out.
They are in the process of increasing production and product mix.
Mkt Cap was in no way elevated before the update so, I interpret this as a bit of unwarranted panic on the day.

[wanobi] 11/1/2023 10:03

some have sold and bought back already (I think) foz,,, good on them, nice work and not often you can do that successfully :-) :-) Cheers Wan :-)

[fozzie] 11/1/2023 09:53

People who sold first thing will be struggling to get back in soon.

[tigerbythetail] 11/1/2023 09:48

Oh, I'm bothered by short term gyrations of the share price, alright. Even though I'm here for the long run.
I'm a skinflint. I like to buy good things when they are on sale!

[fozzie] 11/1/2023 09:37

A nice opportunity to add for all long termers not bothered by the month to month gyrations of the share price.

[wanobi] 11/1/2023 09:32

"As we were limited by our production"

"we continue our capex program to increase production capacity of clinker and higher grades of cement by the summer of 2023"

nice opportunity to accumulate!

Cheers
Wan :-)

[tigerbythetail] 11/1/2023 09:32

Are we all reading the same RNS?
I thought it was a solid update from a stable, well-run company.
Yes, there is inflation in Kazakhstan (like here!). But the company should be able to manage this by increasing their own prices. Yes, the Kazakh tenge long term depreciates against the US dollar, but so does the UK pound. And these shares are price in sterling and pay a sterling dividend!
Anyhow, I added a few this morning. Thanks for the discount.

[dodger777] 11/1/2023 08:15

Disappointing update for sure. I’m hoping divvy won’t be cut if things don’t improve.
Still, I’m in for the longer term so any lower price I’ll add a few.

[bluemango] 11/1/2023 08:09

Nothing in there to threaten the 5p dividend, it's now at 11.6% yield so definite hold for me.

Ukraine rebuilding programme at some point, should drive exports to near neighbour in future.

[jeanesy] 11/1/2023 08:07

It looks like that is happening dirst thing. May get soon sub 40p . Good luck fozzie

[spawny100] 11/1/2023 08:07

Ouch. Surely a producer of raw materials in an inflationary environment running at 20% will just increase their sales price so margins don't change much? Or am I being naievely optimistic?

[fozzie] 11/1/2023 08:06

It’s a long term position for me Jeanesy so not too bothered by short term swings, obvs if lots of people sell it will suit me to buy some more for the long term.

[jeanesy] 11/1/2023 08:03

I would say very downbeat myself. Sold out first thing.

[fozzie] 11/1/2023 07:53

Pretty flat almost downbeat statement, production costs to rise with inflation at 20%.

[plasybryn] 11/1/2023 07:35

Its out today. I'm happy with that.

[cheshire man] 08/1/2023 10:30

Thanks for that link bluemango :-)

[jeanesy] 07/1/2023 20:32

We normally get a trading update around the middle of January so could be next week ?

[bluemango] 07/1/2023 16:44

FWIW - Steppe Cement tipped in TMF:



"Analysts at the UN think almost 70% of the country’s population will be living in towns and cities by 2050. That compares with less than 59% last year. Based on these projections, the amount of cement Kazakh builders need will leap over the coming decades"

[wilo101] 07/1/2023 10:04

15.5p in dividends so far, with the pre-IPO 1p makes 16.5p, free and clear and possibly another 7p for 2022 will be 23.5p all up, with a share price of less than 50p, makes no sense, the share price should be at least GBP1, if not much more.

[bluemango] 05/1/2023 20:21

I would only start being remotely tempted to sell here, if the price rose enough to make the yield drop to around 7%.

At 5p dividend, that's 71.4p. At 6p dividend, it's 85.7p.

[wilo101] 05/1/2023 15:30

Dividends have been:

2018 1p for 2017
2019 3p for 2018
2020 4p for 2019
2021 2.5p for 2020
2022 5p for 2021
2023 7p for 2022?

[finctastic] 05/1/2023 15:01

Maybe finally have caught the attention of new investors here......... after the div and last weeks climbs. Hello, here we are, whatever is happening in the world's economy The Kazahk still needs plenty of cement. Safer than houses, because even they sometimes need rebuilt.