Steppe Cement Share Discussion Threads

[mattjos] 11/1/2023 23:50

Leo, that's a fair point & accepted.
My investment timeline here may well be longer than others .. I hold predominantly in my SIPP, a few in my ISA and don't attempt to trade my holdings in this company.
No matter the short-term gyrations, the mkt cap does not reflect the true value of the business assets and the ability of those assets to create a decent profit and good cash flow. This will not go unnoticed by the global cement majors, particularly the limestone reserves & so i continue to sit tight, adding each month & await the inevitable M&A activity.
Kazakh cement consumption remains far below that of other more developed economies and unless/until we invent a more cost-effective & broadly adopted alternate construction substance, the cement consumption trend should remain upwards in Kaz & so support Steppe forward growth.
The stated intent to return near-all free cash to investors is good enough for me.
Might be boring for some but, slow & steady compound growth often wins the race.

[leopoldalcox] 11/1/2023 23:47

To be clear Mattjos, I think your post as a whole has good points, but the idea that anyone that has sold has done so due to a lack of understanding is what I take issue with. We're all working with the limited information we have, and need to make decisions based on that. I have not sold today, but would be very interested to hear the reasoning from those that have. Comments that suggest sellers are badly researched will not encourage that

[leopoldalcox] 11/1/2023 23:25

Mattjos, seems like we're talking across topics here. You are discussing the long term prospects for the company. Others are discussing the immediate impact to profitability and therefore be more immediate dividends. Even if the company is well placed within the sector, it can still suffer short term hits to profitability.Note that the Kazakh base rate started 2022 at around 10% and is currently at around 17%. This will affect investment decisions and the wider economy.As with any company there are bull points and bear points. I have a decent chunk of my portfolio here but would like to understand both bull and bear arguments. I think it is beneficial to all shareholders. To have a bull only board is unhelpful

[leopoldalcox] 11/1/2023 23:19

Fair point Gary. I'll have a look at the interims again. Would be a good starting point to estimate

[mattjos] 11/1/2023 23:08

a few sensible posts but, most seem incapable of working this out for themselves.
Does anyone think that Steppe is being hit by inflation and no others are similarly affected?
Inflation will be common across all producers in the sector.
Users of cement will be experiencing inflation in all other materials they use in construction & very likely their labour costs to … it's across the board and impacting everyone so, not a specific negative.
It's a business challenge and those than can best improve their Productivity will gain greatly as they can maintain their higher selling prices (as market now expects such) whilst benefiting from marginally lower comparative costs.
The smaller you are, the harder it is to find those meaningful cost-efficiencies as you just don't have the same economies of scale.
Steppe already had a program of productivity & cost-reduction improvements in place for 2022-23 before inflation started to rise so dramatically.
Today's trading update says it exactly as it is & Steppe has/is (for many years) bee consistent in its frank & open communication as to its own performance and that of the market it serves.

Admittedly, one does have to have a degree of faith in management that they can/will navigate this 'patch' but, history shows that management have successfully navigated far, far worse than this & I believe shareholders have every reason to conclude they will continue in same vein.

It is not always correct to be a contrarian but, with regards Steppe I believe it's not actually much of a step to be just that at this juncture - i believe FY 23 results will likely require an 'above expectations' release (assuming the Broker even puts pen to paper after today's update) further down the track.

Cement is as important to an economy as is Water, Copper, Bitumen, Lumber etc. & the Kazakh economy is not going to slow because of a global inflation problem.

For me, todays news represents a fantastic opportunity for Steppe to grow both its market share and its profits.
A few too many folk invested here just because of some tip sheets & had zero understanding of the business. We've managed to shed a decent load of them today and, I trust, gained some new holders who do actually understand the business, the opportunity and have been waiting for such an intra-day price drop to buy in.
Market looks forward. Today's RNS is now fully discounted

[gary1966] 11/1/2023 19:34

They had 15% cost inflation in H1, take a look at how that impacted the figures to get an idea of the effect on full year.

[eggbaconandbubble] 11/1/2023 18:07

Where is 'wilo'?

[leopoldalcox] 11/1/2023 17:48

I'm surprised that everyone is so confident on the divi. I agree it's likely to be maintained, but do we really know?We know the revenue, but we do not know the costs inflation that STCM itself has experienced. I suspect the divi will be maintained but there is missing information, no?

[mattjos] 11/1/2023 17:43

It's the smaller cement producers in the region that will suffer the most in this environment.
The bigger the operation, the greater the economies of scale the producer can leverage.
This is the economic climate which encourages M&A in the sector.
Steppe is one of the larger producers in the region with a loyal customer base, an efficient manufacturing process, a top class BOD, the ability to project their product over large distances with the railcar fleet & today they have told us they have gained market share - well done Steppe.

(Seen all this before during many years of share ownership with West China Cement).

These are the sort of times when a company such as Steppe will actually come out the other side in better shape than many of its competitors.

[loafingchard] 11/1/2023 16:27

Well done dip buyers, I'd be adding if I wasn't throwing all my dosh at property renovation. I've been buying cement again recently (in the UK ) albeit in relatively modest volumes and the price is definitely rising .Dyor, imo etc.

[fozzie] 11/1/2023 16:20

I would be very happy to keep collecting 5p each year for the foreseeable. Already had 15.5p and with an average buy price of c34p can see dividends easily exceeding initial capital stake in time.

[tag57] 11/1/2023 15:54

I assume it is this comment that has caused the drop in so today
“Official inflation in Kazakhstan was 20.3% and will have a significant impact on production costs in 2023”
The management appear pretty proactive dealing with inflation issues this year so no reason to think they will not continue to react to current cost pressures. Steppe’s competitors will face the same cost inflation pressures so hopefully market pricing will
Rise and allow Steppe to maintain margins.

[gary1966] 11/1/2023 14:56

I am with you Blue. I don't want hope value built in to the share price, but would be happy with any advance on 5p if it comes to pass. Personally I will be happy if it can be paid in July this year without any tax issues.

[bluemango] 11/1/2023 14:35

I'll be more than happy with 5p again; any more is a bonus.

[wilo101] 11/1/2023 14:33

will be more like 7p a share, not 5p, depends how the Spring and Summer start, could even be 8p, perhaps

[wanobi] 11/1/2023 14:18

(5p/44p)*100 = 11.36%

[elpirata] 11/1/2023 14:17

11% on current sp

[saint in exile] 11/1/2023 14:16

5p? What's the yield on that then??

[eggbaconandbubble] 11/1/2023 14:04

'at least maintained at 5p' I couldn't agree more!

And less than 10% drop so far today is better than a poke in the eye with a sharp stick!

I'm in for the long run and the yield.

[elpirata] 11/1/2023 13:42

well yes on a pedantic level you are of course correct, divi will not be announced until after 2022 prelims this summer. My point on those figures in the rns being I see no reason why it will not be at least maintained at 5p, do you?

[zangdook] 11/1/2023 12:51

no dividend has been declared

[elpirata] 11/1/2023 12:30

I was just looking at those earlier larger sells around 41p which will of course forego a forthcoming 5p dividend, currently 45p to buy back in, the rationale escapes me!

[mattjos] 11/1/2023 12:25

amazing, the sellers at 40-42p this morning must feel rather sick.

[mattjos] 11/1/2023 12:14

Thanks KS.
As has been the case since the IPO (& Detailed in those Docs) it has been and is the policy to return free cash flow to shareholders in the form of a dividend.
Given the uncertainty facing the global economy in 2023, I have no problem whatsoever if they choose to be conservative and keep divi at 5p for the year - that would entirely sensible