Steppe Cement Share Discussion Threads

[eggbaconandbubble] 09/4/2024 10:33

I take your point knocker, but demand in the region would increase meaning that other (nearer) markets would still need supplies.

[lloydypool] 09/4/2024 08:44

As I type the CEO has declared purchases on another 75k shares.

[lloydypool] 09/4/2024 08:43

I'm not sure that the rebuilding of Ukraine will a) be a near term catalyst (as it seems set to drag on a while yet) and b) will directly be beneficial, as it is too far away.

However, there may be a knock on impact of the end of the war, firstly if there is some sort of stability in the region and secondly as supplies going into Ukraine (from Russia if they win?) may mean less available to export to other areas, such as Kazakhstan.

I suspect STCM may be in for a rough few years, but let's face it they are well set to get through it and the share price is around a 3rd of its previous highs. I don't think there is a lot of downside here and the biggest risk to investors is that the business is taken private as it doesn't seem they will need capital raises and there is a large proportion of the shares in few hands.

[1knocker] 09/4/2024 08:35

A couple of thousand miles is a long way to ship a heavy, low margin, commodity likr cement.

[eggbaconandbubble] 09/4/2024 08:27

By supplying cement to make concrete!!!

[zangdook] 09/4/2024 08:15

How would a cement company profit from construction a couple of thousand miles away?

[eggbaconandbubble] 09/4/2024 07:53

I think no.2 is along the right lines.

[lewish12] 08/4/2024 18:30

Hi All,Rarely add to this forum but have been invested for some time now.I am looking for a good reason to hold, or buy more.My current thought process is:1. The weather decides to improve and provide a successful year for Steppe Cement2. With the current conflict in Ukraine. Come summer it'll seem Russia may win the conflict and take control. Would Steppe Cement profit significantly from this as Ukraine is rebuilt?

[wind dancer] 08/4/2024 09:09

So more manyana!

[wilo101] 08/4/2024 01:19

Thus clinker is cash and represents cash deployed in the business rather than the 3p dividend to avoid borrowing at 26% locally, will come back as cash and help make 2024 results, the Group has no debts

[wilo101] 08/4/2024 01:16

Clinker just has to b ground into powder nothing more and is then cement

[wind dancer] 07/4/2024 20:53

From the Trading update selling price is 48usd, what does that make clinker worth?
Half of that? Be realistic.

[eggbaconandbubble] 07/4/2024 13:49

Wilo, what is the price of clinker per tonne?

My guess is fifty bucks which is a shed load of ‘cash’!

[elpirata] 07/4/2024 09:51

sabre rattling propaganda or more to it? Theyve already got a bloody nose with Ukraine

[wilo101] 06/4/2024 13:44

350,000 tonnes of clinker is akin to cash in the bank, that is where the balance has been deployed, makes eminent sense as for the company to borrow would cost north of 20%...

[premium beeks] 06/4/2024 13:28

The issue could be if they are seen as a transit state to avoid sanctions to Russia. The West turning a blind eye to this at the moment for various reasons but that could change.

[danmart2] 06/4/2024 12:33

I dont think political risk is significant in Kazakhstan, it may not be Europe or North America but there is little organised opposition to the current government

[aleman] 06/4/2024 09:54

This company rarely explains anything. Get used to it. You have to work it out for yourself. A permanent rise in transport costs might cause a permanent loss of some marginal southern markets but does not mean expansion in the North (growing population, etc.) ceases from a slightly lower base. The company did not lose money in a tough H1 last year and H2 is yet to be confirmed but I think should be satisfactory. They've had a tough (quietist quarter) Q1 this year with weather and transport costs. How Q2 onwards will progress remains to be seen but FY2023 results should make that clearer (as H2 presumably will also reflect higher transport costs) . Rightly or wrongly, I remain optimistic, if only because they do not look to be losing money in tough times, the general market trend is up as the economy grows strongly, and the shares trade well below the book value of the assets attributed to them. (Political and majority shareholder risk remains, though, so I would avoid an overweight investment.)

[return_of_the_apeman] 06/4/2024 09:22

The southern market has now been declared off limits due to higher transportation costs - presumeably they can't just increase the price for consumers as producers in the South don't have the same costs and so are more competitive there. The opposite should also be true that southern producers would have less of a share of the central market due to the same higher transport costs but this doesn't seem to have balanced out with Steppe's overall market share still falling. Steppe does not seem to be winning and in a shrinking market why will this trend not continue?

I get they don't want to sell at lower margins as this did not work during the 1st qtr last year and H1 ended with just 100k in profit so atleast they are trying something different however, if it was such a good strategy why have they never done it before? Also the reduction in capital return does not translate into any confidence in this years numbers to me as

The last dividend was paid in 2022.
In july 2023 2-3p was stated as put asside to be paid as a divi.
9 months of production and sales later, last years payout has dropped to 1.5p with no explanation - the read through is just not positive.

[tag57] 06/4/2024 00:11

What is the value of clinker per tonne?

[wilo101] 05/4/2024 23:39

350,000 tonnes of clinker will become cash in July and August and the companies have no debts

[aleman] 05/4/2024 21:24

If the 1.69m tonnes national figure for Q1 is correct, then March nationally was over 18% down on last year. That's a big drop so it would be hard for any company to buck the trend. I've searched for weather issues and there seems to have been a lot of snow and rain in mid-month as a storm with warmer,moister air tried to break through. It follows bad freezing weather in February after a decent January.

January to March are typically months 12,10 and 8 in terms of output magnitude nationally, and the weather trend in the North would typically magnify the national variation, so do not read to much into their drop for STCM in isolation. It's a less important quarter. Q2 will be much higher sales with less weather disruption (and lower transport costs?) and the stockbuild of clinker might help boost sales then. That stockbuild sounds significant and the drain on cash to working capital could be why the payout is smaller. It might mean very good cash generation from Q2 onwards if reduced sales to the South now mean higher margin summer sales in the North. (Being my usual optimistic self here, bad weather is bad weather and it might turn out what the company has done makes good commercial sense.)

Edit - apparently Kazakh rail freight might be seeing higher demand and prices as cargo from China/Asia to Europe is rerouted from ships sailing through the Red Sea. That's one to investigate.

[wind dancer] 05/4/2024 20:33

Nothing here but a gamble for loose money.

[wilo101] 05/4/2024 16:58

I'm buying such nonsense is written here, really, cheap as chips, 350,000 tonne clinker stockpile all paid for always best produce flat out store and save and wait for the price to crescendo in July and August as supplies become scarce, STCM needs HCC to close its wet-lines at Ust and Semey

[danmart2] 05/4/2024 16:27

Concrete Market is down but construction spend is up.

Its back to pre covid levels, which is pretty normal

I don’t actually think this is a bad update when you take consideration of the covid spike and its affect on interest rates

If Kazakh APR is below 10% by end of year, Steppe will get more profitable