Steppe Cement Share Discussion Threads

[tim000] 14/1/2025 19:17

I agree, it’s a good business, but it faces this headwind - particularly at the moment which no doubt is why the company drew attention to it.

[aleman] 14/1/2025 19:00

With a higher CPI target (4-6%), Kazakhstan has always depreciated against £ and $ and likely always will. Currency depreciation did not stop STCM making profit and distributing well over the current market cap as hard currency payouts (LOL) to shareholders in the last decade .

[golden prospect] 14/1/2025 18:31

On balance and despite a weak market, STCM is profitable and unlike so many companies that aspire to return monies is currently providing a 10% yield. On this basis, there is plenty of attraction.

[tim000] 14/1/2025 16:36

A structural problem with STCM is that its revenues are in a long-term depreciating currency against both the $ and even against £. Whilst that also applies to its costs too, margins expressed in $ will be continually squeezed by this currency effect. Much better to invest in a Kazakh-based business whose cost base is essentially in KZT but its revenues priced in $. As KS says, revenue growth over time is mostly due to high inflation, which itself is partly due to sustained currency depreciation. The latest update draws attention to a 13% depreciation against the $ from the 2024 average rate to the current KZT rate.

[aleman] 14/1/2025 14:32

They said costs had stabilised in Q3, after a problematic period of rising costs interacted badly with weak demand and prices. It seems all the problems affecting margin may have reversed to some degree. Revenue is +30% in USD in Q4 and more in KZT. I think it is reasonable to speculate on a significantly increased margin in Q4.

[king suarez] 14/1/2025 14:17

The pertinent graph is shareprice against profits. Shareprice against revenue is meaningless without also including costs? It is bottom line that matters.

Revenue growth can be entirely inflationary.

Since production is broadly flat over the last 10 years you need increasing margin to be better value - that comes from efficiency - ensuring cost growth < revenue growth.

[jailbird] 14/1/2025 12:02

You should draw the share price graph next to that

you will see an inverse type graph

so where is the correlation between revenues growth v share price?

Honestly the performance here has been shocking over the last decade plus, that's if you did not use stop losses to buy low sell high

just an unloved sector and region?

[aleman] 14/1/2025 10:02

Decline?

Volume and KZT revenue were down 18% and 23% at Q1, and down 4% and 8% at 6m to H1. 9m to Q3 was flat and -2%, while FY +5% and +5%. If this was a football match, it would be 4-0 down after 20 minutes, 4-2 at half time, and winning the game 5-4. It's not a 6-0 walkover by any means, and it's not suggesting a big win next year, but it is a good recovery and a decent result in the end after a terrible start to the year.

[wilo101] 14/1/2025 09:44

Another year of decline and no improvement under current management, and they do not even have any mention of the 4 mothballed wet-lines which they once said would be converted to oil-well cement. No growth, no plan, no increased market share, no acquisitions just continued decline and lack of ambition, interest and excitement.

[aleman] 14/1/2025 09:40

They said they'd stabilised costs and increased pricing in Q3. Now they've reported a bumper rise in volume and revenues in Q4. I see no reason not to speculate on the likely result in terms of profit and cashflow.

Cement sold was 1.71 v 1.63. 9m was 1.34 v 1.34 so Q4 volume was 0.37 v 0.29. That's a bumper Q4 rise in volume of 28%. If they have not supplied that from stock, in some ways that would be even better, as they would have strong sales and still have high clinker stock to convert into cash. However, I suspect it's stock reduction which means conversion into cash on the balance sheet and booking a profit over and above sales covered by new production..

We got a 1.5p return - albeit delayed - while they were increasing clinker stock in a weak market, I'd expect a higher payout when the market pricing has recovered and sales increased as stock is stable or decreasing. The drain on cash of stockbuild has stopped and looks likely to be reversing so I'd hope for a higher payout.

[king suarez] 14/1/2025 08:50

It's a trading update, so says nothing about cost comparison so you cannot determine the level of cash flow. Only revenue.

[aleman] 14/1/2025 08:13

Q3 revenue was $67m v $69m (Kaz30.5v31.1) yet FY was $84m v $82m (39.2v37.3). Do the maths. Q4 must have been interesting so results will say good $ generation, which will look even better to us in £s. Presumably, they ran some of that clinker stock down and had a good cashflow quarter. Hopefully our patience will now be rewarded. Perhaps a rise to 2p dividend/capital return?

[wilo101] 12/1/2025 03:44

That's clear from the share prince, and awful market capitalisation, cement and Kazakhstan are hardly in vogue and the flavour of the month,there is no Kz stock with a decent cap other than Caspi Bank

[nik7907] 11/1/2025 19:37

There is little interest to be honest. Trading will happen when there is interest. Perhaps the trading update due will elicit some interest. A normal dividend will be best as it will then appear on income seekers radar. Just my opinion

[wilo101] 11/1/2025 19:18

with Firebird and other major holders the free float is much less than 42 million sharesor a mere 22%, so there is little trading in reality

[danmart2] 10/1/2025 13:57

A good buy at these levels, I was concerned it would be taken private but that doesn’t seem to be the case.

[jailbird] 10/1/2025 08:09

I found a 12 year chart for STCM.It was 25p back then and today it is 16.5pSo you FTSE growth figures are not comparable to STCMThis is point I was making This has been a poor long term investment.You would not have this in your pension

[zangdook] 10/1/2025 04:01

If they can bang out another 5p dividend or two the share price will react.

[wilo101] 10/1/2025 02:28

Cheap as chips dividend/capital return reinvestment always makes sense given the effect of pound costs averaging, over time, the market cannot forever continue to so undervalue and misprice STCM is utter nonsense, see also similarly FAR and the like, all Kz stocks get ludicrous values other than Caspi and CAML, which will not last over time.

[jailbird] 09/1/2025 21:15

True AlemanBut is that comparable ?

[aleman] 09/1/2025 20:10

With dividends reinvested, the FTSE 100 has grown 297.36%* in the last 20 years.
With dividends reinvested, the FTSE 250 has grown 649.7%* in the last 20 years.
With dividends reinvested, the FTSE All-Share has grown 336.08%* in the last 20 years.

[jailbird] 09/1/2025 17:20

I recall Net value of £1.50 or something on the lines was mentioned years ago pre covid It meant little then and means little now I really do not get the excitement of these small capital repayments Ppl have been buying upwards upto 50p i recall . How many will admit they are sitting on higher averages and in bigger losses on the hope of this ever reaching its net value via a sale just to pick up the capital payments Capital gains is where the money is for PIs

[tigerbythetail] 09/1/2025 16:53

Thanks, Wilo. Very detailed and helpful.