Steppe Cement Share Discussion Threads

[aleman] 30/9/2023 10:48

It's not a huge point with regards to STCM but it's worth acknowledging that there has been a baby boom in Kazahkstan in the last 15 years probably driven by economic factors. There was a boom in oil production from around 1998 and a boom in GDP growth from around 2003. These followed years of economic austerity and disclocation before and after the break-up of the Soviet Union. The great economic expansion from about 20 years ago probably led to a significant rise in optimism about the future. Birthrates rose strongly and there is now a surge in young adults coming into the workplace that should drive further expansion for a decade or two.



I don't know if STCM can take any advantage of this but it sure beats being in a shrinking market. They will need to keep modernising equipment to keep up with competition as new cement plants are being built to keep up with the growth in the population and economy.

[return_of_the_apeman] 29/9/2023 14:41

Pinged an email off to investor relations after the results, unfortunately not had a reply back yet

I note there is some pressure on margins in your half year report released today

I expect this is the same for your competitors and I expect you monitor their margins but I am struggling to find this information

I am trying to work out if you are a bottom quartile cost producer in Kazakhstan please would you be able to let me know?

Thanks for your time

[aleman] 26/9/2023 07:53

Kazahkstan's August industrial production was good and cement production was above 2022 and almost back to 2021 levels so the market STCM is operating in seems to be continuing to recover.

The Q3 update would typically be in about 2 weeks.

[aleman] 20/9/2023 16:35

I presume there'll be dividend news with the Q3 update in about 3 weeks.

[aleman] 20/9/2023 10:47

CEO says the current objective is to pay 2-3p dividend before November after H1 finished. He tells us in yesterday's H1 report that H2 volumes, prices and costs have all improved. Straight after that, so insider buying is allowed again, his family buys £37k+ worth of stock. HHHhhmmm...

Granted, it's small compared to total family ownership.


"Before November" only allows 6 weeks to declare and pay any dividend.

[tigerbythetail] 20/9/2023 10:25

RNS out - decent buy from CEO yesterday. Always reassuring.

[fft] 20/9/2023 10:25

CEO bought another 160k yesterday.Think this *could* be a good recovery play as demand picks up and inflationary increases drop.

[aleman] 19/9/2023 17:33

Wrong thread.

[aleman] 19/9/2023 14:19

National cement sales were down about 18% in Q1. They were up about 3% in Q2. That looks more like severe winter disruption than a softened market to me and would explain why they talked of a 2-3p dividend after H1 had finished. Clearly the Q2 trend was much better. Presumably, they want to see if the better Q2 trend is sustained into H2 before deciding the dividend for 2022.

[scrwal] 19/9/2023 13:23

The board had already flagged that sales had fallen and that to recover lost market share they had cut prices. This means it is difficult to predict what the results going forward will be as we don't know how revenue recovers nor do we know the revised margins going forward.
Is it a recovery play - probably but what is the recovery. Only a clean set of 6 months of results under the new revenue/costs pricing/margins will give an indication.
In isolation the results are bad and you have to question paying any dividend at this point in time even though it's based on the prior year figures but that shouldn't matter as the immediate cash position is more important.

[tigerbythetail] 19/9/2023 11:08

Zangdook - I hear you!
I always under-estimate Mr. Market's bi-polarity. In the good times he gets more euphoric than I could ever believe, and in the bad times he plumbs almost unimaginable depths of depression. Currently, Mr. Market thinks it's the end of the world for STCM. Which, objectively, it isn't.

[elpirata] 19/9/2023 11:06

lol you beat me to it apf, its a buy for recovery at this level over a 12 months plus timeline imo.

fwiw a 2p divi equates to a £4.38m cash payout, would you sanction this as a STCM director?

[zangdook] 19/9/2023 10:58

the frustrating thing about these 'moments to buy good companies cheap', which seem to come around like London buses, is that I already identified them as good companies and picked up a lot of stock at higher prices.

[apfindley] 19/9/2023 10:57

Aleman Your posting is becoming frequent, showing your insecurity in your investment.If you're so confident in the outlook here then there's no need to pump as it will naturally climb back over a period of time.Or do you want to pump fast and exit.

[aleman] 19/9/2023 10:42

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

They released this comment on July 7th - after H1 had finished. They will already have known that they made little in H1 and been hoping for better volume, higher prices and lower costs for H2. Today's positive trends reported for these comes half way through H2 so the basis for the dividend comment does not seem to have changed.

[tigerbythetail] 19/9/2023 10:23

My gut instinct says this is a moment to buy a good company whilst it is cheap.
But feeling a bit bruised today - maybe tomorrow I'll follow my instinct.

[aleman] 19/9/2023 10:17

Here's the crazy increase in Kazahk fertility over the last couple of decades, going from 1.8 to 3.3. This is highly unusual. It is driving an acceleration in population growth. Cement production WILL keep going up - possibly very quickly. It's already bounced back a bit this summer after the winter disruption. It should be back to record levels in a year or two. Today's results were looking backwards.



Here is the only forward looking statement:
Volumes are recovering in the second half of the current year and prices have been slightly increased, while the cost of production is improving as well.
General inflation in Kazakhstan was 17% during the period, but the situation has improved in the second half of 2023.

Inflation peaked in February at 21.1%. August was 13.1%. Target is "close to 5% in the medium term". They have already started cutting rates, which should further help the recovery in cement volumes already seen this summer.

[aleman] 19/9/2023 10:11

They cite spare parts as part of the reason for production costs rising. Clearly the weather and rail disruption created unusual production downtime and an opportunity to do extra maintenance. Plants like this run non-stop and downtime and parts for maintenance are expensive. It will usually take place during the quiet winter months. The national winter disruption allowed the opportunity to get ahead on maintenance but at an extra hit to production costs. It should mean less downtime and maintenance cost in the near future.

[king suarez] 19/9/2023 10:00

Yes, numbers aren't THAT bad really. The company is still in a strong financial position with current assets far exceeding total liabilities (a surplus of over $15m).

They didn't make a profit this half-year, but they did still generate $5.2m in operating cash flow. The borrowings may be up slightly from June 2022, but have not increased from Dec 22.

The good news is that they avoid income tax for this half-year, so that is $1.8m saved in cash going forward v the prior period.

For reference operating cash flow for H1 2022 was $8.4m, H2 2022 was $10.5m and H1 2023 $5.2m.

I think they will still pay a dividend, particularly as H2 conditions improve and usually sales and cash flow are better. It might be the lower end at 2p though - will see.

[aleman] 19/9/2023 09:59

It's trading over 30% below a very solid book value which actually rose marginally in H1. They said volume, prices and costs are all improving in H2. This is in line with economic numbers which seem to be improving and there has just been a rate cut.

Cement demand will continue to improve. The population is rising strongly as birth rates have risen very strongly in the last couple of decades. Demand is already recovering. It will soon hit new records again. To trade nearly 1/3rd below book value is offering a great long term bargain.

[lloydypool] 19/9/2023 09:51

Looks like June to June the net cash position is down by circa $10m having paid out around $14m in divi (fag packet calculation). They may been a bit gung ho in paying out 5p last time & this looks like any divi now would be a bonus, 2-3p as suggested is very unlikely(that fear held me from buying back until last week). Whilst I’ve obviously been early I don’t think today’s RNS is as bad as the share price drop suggests, price now hitting Covid lows and whilst clearly the world has got new problems now I say low 20’s here represents a good prospect for the long term investor, wait for conditions to improve & you’ll be buying in at a much higher price.

[danmart2] 19/9/2023 09:50

Bad results, bad numbers, will hold for now but certainly this is not a share to invest in at present.

I expect this will go under 20p

[aleman] 19/9/2023 09:36

"Volumes are recovering in the second half of the current year and prices have been slightly increased, while the cost of production is improving as well."

[1knocker] 19/9/2023 09:33

Borrowing up, cash in hand substantially down.
All the other metrics, price, cost, volume unfavourable too.
I am afraid anyone who bought ahead of those results has caught a nasty cold.
Pretty much back to all time lows.
Lets hope that the only way is up from here, but if there is a recession coming the worst may still lie ahead of us as shareholders,
I shall continue to hold for the time being, but see no reason to buy more.