Steppe Cement Share Discussion Threads

[danmart2] 31/10/2024 05:44

By end of November, the winter will be underway in Kazakhstan

[aleman] 30/10/2024 10:36

Kazakhstan cement production annual change:

Jan +10%
Feb -3%
Mar -14%
Apr +1%
May -6%
Jun -6%
Jul -3%
Aug +6%
Sep +9%

September was a new September record by 7% after August squeaked a record for any month. October weather seems to have been fairly good so Q4 looks likely to be off to a strong start, with potentially a good market for shifting more of the high clinker stock. First snows in the North this week look like melting but winter temperatures look like arriving later next week so that's possibly the good weather finished.

[mattjos] 25/10/2024 15:44

Welcome Celeritas ... remember you well from the WCC days.Good entry timing

[celeritas] 25/10/2024 14:56

Some of those trade prices are on the wrong side of the buy/sell..

[celeritas] 25/10/2024 14:53

As I know from WCC experience having held for years, cement works in cycles.
This is very cheap hence why I'm now a buyer now.

[wilo101] 25/10/2024 08:53

weather still good so the season not yet over and normally closes out late 10, but we shall see with global warming, hopefully the sales will take all clinker and bring to cash

[danmart2] 18/10/2024 13:39

Haven’t got a problem with capital reduction per share.

Q4 results should be interesting

[tag57] 15/10/2024 21:04

I certainly hope so Matt as have held all the down to a 65% loss. I do remain hopeful of Steppe’s future performance as they have continued to invest in the business during the market downturn. Hopefully the company structure will be ready to pay a dividend once they are happy with their cash balances!

[mattjos] 15/10/2024 20:33

I suspect you unaware of how the cement cycle works .. slow, slow, slow .. FAST

[tag57] 15/10/2024 20:00

6 bag? Might double if they get the divi sorted out but would have thought management reputation has been burnt by the divi fiasco over the last couple of years. That will take a long time of decent consistent performance to repair.

[mattjos] 15/10/2024 19:32

not worried about whatever small debt they may have as the interest rate is always very competitive as a result of govt.
A business this size, you'd want / expect a bit of debt on the BS.
It's crazy cheap .. goes with the territory but, if the recent lows prove to be the absolute lows (as i suspect) & we now entering a upswing on the sector then this could easily now 6 bag from here

[msd248] 15/10/2024 19:09

My guess is that they're still carrying at least some of the debt, probably all of it. They break down the bank loans in the 2023 Annual Report (page 83). About $2.8mn matures in 2025 or later. But note that they're only paying a 6% interest rate because the KZ government is subsidizing it, which is good. Also, in the management commentary on page 13, they note "the Company intends to apply to obtain them (gov't subsidized loans) to finance capex whenever possible"

I agree that the share price looks silly. Steppe is the low-cost producer in KZ. At these levels, the rest of the industry is losing money. I presume the industry was caught off guard by high inflation. As cement price hikes set in and earnings recover, the stock price follows. We saw this in 2017 too.

[tigerbythetail] 15/10/2024 17:26

Hi Mad!
Thanks for answering my question. In other words, plenty of room for further capital reductions. If that's what it takes to pay money out, rather than dividends, then that is what it takes!
The cash build to $11m is impressive. I wonder If they're still carrying $5.4m in debt, or if that figure has reduced as the sales have rolled in.
I'm not expecting a rerate tomorrow, but the share price here is a bit silly now, and the market will notice this eventually.

[wilo101] 15/10/2024 13:32

Less than that, by quite a bit.

[apfindley] 15/10/2024 12:52

About 75% of shares here are reported as held by 5 known holders, according to the company website. Is that info accurate? Meaning only 25% free float, or freely tradeable without declaration.

[mattjos] 14/10/2024 19:31

From the September HY report:

"· As at 30 June 2024, the Company's borrowings totalled USD5.4 million, with a cash balance of USD2.0 million therefore net debt of USD3.4 million. For comparison, as at 30 June 2023 the Company had borrowings of USD6.7 million and a cash balance of USD6.0 million therefore net debt USD0.7 million. The cash was used to fund a reduction and repayment of capital of USD$4.16m, as announced on 5 April 2024, and to build a higher clinker and cement inventory, valued at USD5 million as of 30 June 2024."

From today's Q3 report:

" Steppe Cement has cash and cash equivalents of USD 11 million, as at 7 October 2024."

[msd248] 14/10/2024 15:06

As of June 30, 2024. Another US$69mn in capital reduction is possible. See page 4 of the interim report next to 'Share Capital'

[tigerbythetail] 14/10/2024 14:07

Yes, I was also thinking of comparing the market cap of this solid asset-rich profitable company against some piece of AIM fluff that doesn't even make any revenues (take your pick, there are lots of them!).
Does anybody know how much more capital reduction is possible per share? There are technical limits on this manoeuvre!
Guidance from the company on this, or the resumption of ordinary dividends, would be welcome. Sooner or later the corporate structure needs sorting out.

[andydaf] 14/10/2024 14:02

Good news today though not unexpected.Lets see what the full year update looks like.Seems to me it will be a game of two halves in the future,weak first half whilst we build stocks of clinker followed by a storming second half.Fully expect a 1.5.p capital reduction or dividend next year.Strip out the cash and its sobering to think a long life profit making cement company is valued at the same market cap as PXC.GLA IMHO

[martinmc123] 14/10/2024 11:09

The Group issued a decent if unexciting Q3 update. Steppe Cement generated revenue of KZT 15,085 million (approximately USD 32 million) in Q3 2024, which was 7% higher than the revenue achieved in Q3 2023 of KZT 14,116 million (approximately USD 31 million). 9-months ytd performance was a little weaker with revenue down 2% to KZT 30,520 million (approximately USD 67 million) compared with KZT 31,093 million (approximately USD 69 million). So at least there has been some incremental improvement over the preceding quarter. This is what the share price has focused on this morning, but longer run the share price remains in a clear and steady correction. The main drag to revenues is coming from the price of cement which is falling - the average price...from WealthOracle

wealthoracle.co.uk/detailed-result-full/STCM/870

[tigerbythetail] 14/10/2024 09:54

Yes, I'm happy with that update.
What this share needs now is predictability to bring investor confidence back. A clear statement regarding potential future dividends and / or capital repayments would be welcome, preferably linked to a timeline.
Anyway, for today, this is good news.

[golden prospect] 14/10/2024 08:52

STCM looks well positioned for recovery - well done

11m dollars in cash should give scope for a 2p dividend (5.7m dollars)

[mattjos] 14/10/2024 08:52

Looks like we've turned a corner here now

[tag57] 14/10/2024 07:24

Surprised that they have built cash so quickly given the sales level and minor price improvement