Steppe Cement Share Discussion Threads

[aleman] 12/7/2023 17:20

They had two bouts of extreme cold - November and January (with disruptive snow) - causing problems with short term coal supplies. About 70% of electricity is generated from coal. They are modernising some of the coal stations and plan to build out renewables. Not sure what overall effects these might have. Since rail got clogged up with coal through the winter, maybe they will modernise or expand that, too? I can't help but think that building more houses will then need more cement demand for infrastructure but I need to do more research.

[andydaf] 12/7/2023 17:04

The new holding company has been formed in Astana and has a bank account and the restructure should be complete by end of october.Management said they are cash positive and clinker,coal etc are all well stocked.Just think they are being very prudent and i cant say i blame them.These are strange times and never hurts to have a little for a rainy day.Last winter was very cold minus 35 in november!however thats in the past lets hope things improve and the factory sells its production.They are going to concentrate on home market as turnaround times on the rail wagons has gone from 8days to 12days and this will save them from leaseing/buying more wagons.All in all seems to have been a difficult winter but seems things are getting better.GLA

[zangdook] 12/7/2023 16:42

So the message is they could afford a 4p or 5p dividend but they want to conserve cash for now? Was there any particular thing they might need the money for? It can't all be for spare parts? Is the possible delay in paying the dividend ("before November") because they want to complete the restructuring first?

[andydaf] 12/7/2023 16:34

Having attended the zoom meeting of the agm i feel comfortable with my investment here and will most likely buy some more if the price falls into the twenties.Dividend will be conservative as management do not want to have to borrow any money with commercial rates at 20% in Kazakhstan,cash is being tied up on spare parts as lead times are 6 to 9 months on spare parts,outlook for july to october is better.Inflation seems to have peaked in Kazakhstan and is on the way down.2 or 3 pence dividend is fine by me in tough times.Management seemed pretty relaxed and lets be honest they own a sizeable part of this business.As for witholding tax they are setting up a holding company in Astana so dividends will avoid witholding taz though this will mean only one dividend a year and no interims.As always GLA

[leopoldalcox] 12/7/2023 12:11

Not a great update. Macro environment appears to be hurting here at least in the short term. Potential buying opportunity may present itself. The question is when. I'm also a bit sceptical about the withholding tax issue. I flagged before they never stated it was resolved - they just announced the divi. Seems like they're still figuring it out and I think they need to be more transparent

[leopoldalcox] 12/7/2023 12:09

Probably better access to a wider pool of capital. Most resource companies do this to be fair

[farrugia] 12/7/2023 12:02

and why are they listed in London and not on the Astana exchange (Kazakhstan). Something to ponder about? I don't particularly like companies which are listed in a different country to their business.

[apfindley] 12/7/2023 10:13

Still a solid business here and long term hold, but likely to see a short term dip well into the 20's for a few months.Pretty much like a couple years ago...and look how well it recovered then also.Good opportunity to load up in the 20s, as before.

[zangdook] 12/7/2023 09:55

Did anyone get into the AGM? Did they give any further explanation of what's going on with the dividend? I get stuck in traffic and missed it :-(

[11_percent] 12/7/2023 09:10

This does not have much going for it now.

2-3p in a few months time....and a (uncertain) divi in a year....thats about it.

[danmart2] 12/7/2023 09:00

Based on the updated at the start of the year, 2-3p is better than i expected!

Agree the share price will fall tofsy

[lloydypool] 12/7/2023 08:48

I’d expected a reduction in the dividend, so 2-3p isn’t a surprise … I’d buy back in around low 30’s but I’m now worried “aiming to pay 2-3p” leaves room for further disappointment. If economic conditions deteriorate then it would surprise me if the divi is cut further, better that than dilution later. I feel this is a bargain at 30-35p but this market is showing even bargain shares fall hard.

[poggy120] 12/7/2023 08:41

I agree tiger. It does not help that nothing is certain about the dividend save that it will be heavily cut. Sometimes it pays to dive in to buy immediately on bad news, but in this case there must be a fair chance that the price will languish, and fall comfortably below 30. A time for patience, and for regret about my top up at 44 or, more positively,for relief that I did not buy more ahead of the announcement.

[tigerbythetail] 12/7/2023 08:12

Market not liking the update, fairly predictably. It's all about the dividend for now, and the market will want a yield of towards 10% on an expected (mid-point) dividend of 2.5p. So 25p to 30p for now.
Longer term this is still a good company and a good investment. But the next couple of months won't be fun.

[aleman] 12/7/2023 07:57

Inflation is going the right way. The target is "close to 5%" so it's fallen back almost half way to target in just 4 months. 2-year government bond yields rose from 9-10% up to 16% as inflation spiked and they have eased to 14.5% in recent months so they are starting to predict rate cuts. This fall in itself should have a slight positive effect on business activity even before base rate cuts themselves materialise in months to come.

[wilo101] 12/7/2023 07:55

Can someone post the Zoom details to dial-in and join?

[kevph] 12/7/2023 07:46

I'll take a 6.5% divi. Can't imagine construction is flying on the back of 16.5% interest rates. Should improve nationally once they get a handle on inflation.

[aleman] 12/7/2023 07:34

Well, a roughly halved dividend to be paid in the next 3-4 months is a disappointment. The pessimists had it right. There's been reduced prices on top of the winter's reduced volumes . There is a little bit of good news. If volumes have recovered nationally in April and May, and the company has regained market share, then monthly volumes are back to where they were. Trouble is, when do prices recover?

[ramellous] 12/7/2023 07:31

“The current objective is to pay a dividend of 2 to 3 pence per share before November 2023.”

There’s the announcement today.

[finctastic] 11/7/2023 22:23

Petrol at around 215-220 Tenge/Ltr, unless I've misplaced a decimal point in my calculations 35ppl ish?

[finctastic] 11/7/2023 22:14

I'm not sure of the demand for oil-well cement in Kazakhstan in the current climate, perhaps cheap fuel from across the border will have curtailed investment in that sector at present?

[wilo101] 11/7/2023 12:33

As many as possible should attend by the Zoom Link and air their views to the CEO, especially, as well as the Board, in general, ask why nothing is being done with the 4 mothballed wet-lines, where the published plan was to convert to oil-well cement, which get a high premium.

[casholaa] 11/7/2023 12:02

AGM tomorrow at 9am GMT

[tag57] 10/7/2023 14:22

Whatever we receive, I will be reinvesting back in to lower my average price and hopefully improve my yield going forward.
Anyway, shouldn’t be too long before we find out.