Steppe Cement Share Discussion Threads

[jailbird] 16/1/2018 08:33

MattjosAAZ's update , moved the priceSTCM update moved down todayJust shows how off the radar this share and unknown

[jailbird] 15/1/2018 18:46

Wilo Why do you talk in riddles ?I am going remain conservative on the dividend , I do not think we will get a divi full year results , otherwise I would expect them to say it in the update since figures are now known .But I certainly expect debt to reduce even quicker now.I would expect a divi next H1 though :-)

[celeritas] 15/1/2018 18:35

Wilo, reality?

[wilo101] 15/1/2018 18:29

The reality is even better

[celeritas] 15/1/2018 11:26

Great update.

[azalea] 15/1/2018 08:50

Cracking Prelims update. Given the across the board positive numbers, we just might see a div announced in April, which Wilo mentioned last year.

[jailbird] 15/1/2018 07:58

Steppe Cement Limited Preliminary Update for Year Ended 31 December 2017Source: UK Regulatory (RNS & others)TIDMSTCMRNS Number : 8140BSteppe Cement Limited15 January 201815 January 2018Steppe Cement LtdPreliminary Update for the Year ended 31 December 2017Steppe Cement Ltd ("Steppe Cement" or the "Company") recorded revenue for the year ended 31 December 2017 of 21,443 million Tenge ("KZT"), which was 20% higher than the KZT 17,941 million recorded for the corresponding year ended 31 December 2016. A sales volume of 1,630,230 tonnes of cement was achieved in 2017, a 4% increase over the 1,570,140 tonnes for the previous year. Average price (ex - VAT) for delivered cement was KZT 13,153 per tonne in 2017, a 15% increase compared with KZT 11,426 per tonne in 2016. The average ex-factory price in 2017 stood at KZT 10,895 per tonne (14% above 2016) representing US$ 33 per tonne based on 2017's average exchange rate of 326 vs 340 in 2016.In 2017, the cement market consumption in Kazakhstan remained at 9 million tonnes.Steppe Cement's local market share remained stable at 17% while exports doubled from 73,000 tonnes in 2016 to 146,000 tonnes. Overall, Kazakhstan imported 0.7 million tonnes of cement (vs 0.5 million in 2016), and exported 0.9 million tonnes (vs 0.4 million in 2016).The full results and audited accounts denominated in US$ are expected to be published in April 2018.Steppe Cement's AIM nominated adviser and broker is RFC Ambrian Limited.Nominated Adviser contact: Stephen Allen or Andrew Thomson on [phone].Broker contact: Charlie Cryer at [phone].This information is provided by RNSThe company news service from the London Stock ExchangeENDMSCFMGMMZKZGRZG(END) Dow Jones NewswiresJanuary 15, 2018 02:00 ET (07:00 GMT)

[jailbird] 15/1/2018 07:57

Great update

[jailbird] 14/1/2018 23:58

Mattjos,

The article is an excellent summary and highlights STCM's value, on last year's value at least £1.50, but much more now

The thing is as a shareholder you want it to be noticed for good reasons...we are invested here to make money after all.

Otherwise why pay money to be listed?


@Wilo..where did you obtain that article?

[mattjos] 14/1/2018 20:47

Well done for re-posting.

Hi-lights the opportunity for A N Other cement producer and the daft valuation the market is giving the company just now.
However, to 99.999% of investors, STCM is completely invisible. Not that I blame the company for that. They are sat on a goldmine & it will payout at some point in the future. Meantime, it quietly grows bigger and stronger.
Why draw any more attention to it than the listing rules require them to?
I suspect it will be another commercial enterprise that clocks it, long before the market does.

[jailbird] 14/1/2018 20:32

Read through old posts here from last year.
I see talk about divi was last mentioned last year but did not materialise.

Lets hope we hear different news this time, but not expecting a divi payment until debt is a little lower..


Here is the old article you posted Wilo...looks like a research article from last year.

Figures below now are already a year old and STCM is in a better place now

STCM is the holding company of Steppe Cement (Malaysia) Sdn. Bhd, which, in turn owns Steppe Cement Holdings B.V., which in turn own the two operating companies, Karcement J.S.C.(“Karcement”, the owner and operator of 2 dry-lines, with a production capacity of 2.4mtpa), and JSC Central Asia Cement (“CAC”, the owner and operator of the 4 wet-lines, mines, equipment and other infrastructure, with a production capacity of 900,000mtpa), which form the cement manufacturing and mining complex at Karaganda in Central Kazakhstan, close to Astana.
STCM is the closest plant in Kazakhstan to Astana (1.5 hours by car), enjoys free-of-charge slag from the blast-furnaces at Arcelor-Mittal and cheap coal, and thus energy from Karaganda and Ekibastuz. It has its own lime-stone and clay mines, with reserves for 150 and 1,000 years, respectively.
STCM was listed on the AIM in London in September 2005. More than 60% of the shares are indirectly ultimately owned and controlled by the four founders, and has been since July 2004. Those founders are buyers, not sellers, and previously sold 50% of their shares for £3.20p per share in April 2007, when there were 115m shares in issue, thus valuing STCM at £368m.
Currently STCM has 219m shares in issue and very few shares are traded because it is tightly held. The current screen price is £0.25p per share, giving an apparent market capitalisation of £54.25m, but this bears no resemblance to the real value of STCM, and can be ignored for all practical purposes.
CRH Plc (hxxp://www.crh.com/) recently purchased US$6bn of assets from Holcim (hxxp://www.holcim.com/) and Lafarge (hxxp://www.lafarge.com/en) upon their merger and paid 8.5times EBITDA. The merged entity is now called Lafarge Holcim.
Heidelberg (hxxp://www.heidelbergcement.com/en) paid US$1.45bn on acquiring 45% of Italcementi (hxxp://www.italcementigroup.com) and Ciments Francais (hxxp://www.cimfra.fr), which valued the company at US$3.7bn, and which transaction was recently completed.
This included the cement plant at Shymkent. As a result, Heidelberg now owns three plants, Bukhtarma, Shetpe and Shymkent in Kazakhstan, which will enable it to increase prices and margins, and which will indirectly benefit STCM.
Vicat of France (hxxp://www.vicat.com/), financed by itself, IFC and Calyon built and completed a 1.1mtpa dry-line plant in Kazakhstan at Lake Balkhash, called Jambyl Cement for €400m (excluding land acquisition costs).
Heidelberg of Germany (hxxp://www.heidelbergcement.com/en), financed by itself, IFC and EBRD also spent €350m on a 800,000tpa dry-line plant at Shetpe in Kazakhstan, called Caspi-Cement (again, excluding land acquisition costs).
The only logical way of valuing STCM would be on a replacement cost basis.

It would not be possible to replace STCM’s plant, represented by 2,400,000tpa modern dry-line capacity (2 dry lines side by side, recently commissioned), and the original 900,000tpa wet-lines (4 wet lines side by side) annual capacity, for less than US$150 per ton (with Chinese equipment), and perhaps US$200 per ton using western design, plant and equipment.

For STCM, with the completion of the 2 new dry lines in 2013-15, the construction and financing risk is now over. No other plant in Kazakhstan has 2 dry lines side by side. The plants at Kant in Kyrgyzstan, Novotroitsk in Russia, Semipalatinsk in Kazakhstan all of which still have the old wet-line capacity will have to modernise or face closure. The recent recession in construction since 2007 and the KZT devaluation seems to have put a stop on the other planned plants.

If in valuing STCM we discount the value of the 4 wet lines, by half (given their age and the old wet technology), we think that STCM would be more correctly valued as follows:

4 Wet Lines, capacity 900,000 t/p a @ US$150 x 50% US$75m

2 Dry Lines, capacity 2,400,000 t/pa @US$175 US$420m

Limestone and Clay Mines, Infrastructure, Wagons and Equipment US$45m
Less: debt US$5.5 m to VTB, to be fully repaid by 31.12.16
US$10m to VTB for wagons, due in 2021.
US$4.5m Bond issue in KZT due 11.17
US$4m subsidised DAMU loan at 6% in KZT for 10 years, due 2026
Total Debt = US$24 m (by 31.12.16 it will only be US$18m, and it will be fully repaid by 31.12.17, if not before)

Enterprise Value at 31.12.15 US$516m
Value per share: 219m shares in issue US$2.356c per share


Whilst this might seem considerably more than what the AIM market currently values STCM at, any of the world’s cement manufacturing majors who do not have any assets in Kazakhstan, such as CRH Plc, Holcim-Lafarge, Cemex all of whom are keen to enter the Kazakh cement market and regard STCM as the best company and plant will be willing to pay such a price for the following reasons:

1. it is no more, possibly quite a bit less, than what they would have to spend to build a new plant, as proven by Vicat at Balkhash and Heidelberg at Shetpe, adopting their cost the true value of STCM would be more than €800m;
2. it would save them at least 2 to 3 years of site identification, planning and execution before the first kilo of cement is produced;
3. if they did not buy STCM they would be competing against STCM, which is Kazakhstan's most centrally located, lowest cost and most efficient and competitive cement producer;
4. STCM already owns its own fleet of new railway wagons and storage terminals, all of which were bought recently;
5. the accounting profits STCM suffered badly from the devaluation of the KZT in 2015, however, its EBITDA of US$22 m in 2015 (2014: US$17m) should see all of STCM’s borrowings eliminated by the end of 2017, if not before, allowing for the payment of generous dividends, possibly even commencing in 2016; and
6. this value is modest compared to the purchase prices paid in the recent transactions referred to above.

Accordingly, it is clear that the only correct way to value STCM is on a replacement cost basis and that US$516m is a reasonable current enterprise value.

[jailbird] 14/1/2018 09:55

Ok Kaz has been mentioned as the triad but In layman's terms what does have to do with Steppe?

[wilo101] 13/1/2018 05:22

CHINA THE TOP BUYER OF TURKMEN GAS - 12 JANUARY 2018

The PRC bought 160 bn m3 of Turkmen gas in almost seven years, the Chinese ambassador in Ashkhabad Sun Weidong told the Neutral Turkmenistan newspaper.
The 1,800-km-long gas pipeline that runs from Turkmenistan to China is the biggest trans-border gas-line in the world while Turkmenistan is the happy owner of the world’s fourth biggest gas deposits. China, on the other turn, is the world’s biggest consumer of energy resources.
The two countries are tied with three lines of the Turkmenistan-China gas main with the designed annual capacity equalling 55 bn m3; Turkmen gas has proved useful to millions of people in china after the start of the pipeline at the end of 2009, Weidong added.
The pipeline goes across Uzbekistan and Kazakhstan before it reaches China. A third of gas used in Beijing comes from Turkmenistan. It is planned to build the fourth line that would go across Uzbekistan, Tajikistan and Kirghizstan and should added to the Turkmen exports to PRC.
In Weidong’s opinion, the Chinese-Turkmen gas co-operation can be described as strategic, long-term, mutually supplementary and mutually beneficial. Not only is it in the interests of the two countries but also plays an important role in keeping stable in the countries it crosses. It will make it possible to achieve the ultimate goal of balancing the interests of all the participants of the energy triad, namely, producers, transit hosts and consumers, according to Weidong.
Approximately 2,000 employees of 30 Chinese companies are active in Turkmenistan; the goods turnovers have grown in the 25 years of diplomatic relations – from $4.5 mn in 1992 to more than $10 bn in 2013. China has been the leading trade partner of Turkmenistan for five years on end.

[jailbird] 12/1/2018 14:43

Ok 120k sold today L2 unchanged

[jailbird] 12/1/2018 13:15

Expect an update on Monday or during the week.20k sold today Can still sell 50k as an example which is currently positive 21.2 / 23.2p spread

[azalea] 11/1/2018 14:16

Kaz is clearly the gateway for China in its quest to reach Europe by a strategically safe land route through central Asian countries, which lay virtually untouched since the days of the Old Silk Road and ripe for economic and industrial development. Key to which will be new roads and railway lines compatible with China's international standard gauge, which runs from its East coast to its border with Kaz.

[celeritas] 10/1/2018 22:13

Or a Chinese partner like Heidelberg. From wcc days the Chinese like to consolidate to control cement prices.

[mattjos] 10/1/2018 19:52

Would in no way be surprised to hear Steppe have received a Bid one of the Chinese cement majors. It's an important and growing market & the Silk road development will see significant infrastructure development for many, many years ahead.

Far, far cheaper to buy up Steppe with dry line production already in place, rolling stock for distribution and customer relationships/goodwill in place than it would be to build a new plant.

It is a very acquisitive industry. Any potential take-out price here would be way higher than we stand right now. Cant see it coming about by an acquirer buying the stock in the market as far too illiquid and very small free-float left here now. Most likely be a bolt-from-the-blue RNS one morning

[jailbird] 10/1/2018 18:24

Old snippet
hxxps://www.thebusinessyear.com/kazakhstan-2016/factory-reset/review

Cement
In December 2015, Chinese cement company Huaxin Cement announced it was investing in a 5 million-tons-per-year cement and 1.5 million ton clinker plant in Kazakhstan, in a move that is widely seen as confirmation of China's commitment to the “One Belt, One Road" trade route initiative. The plant's location is far from China's border, in the Aktobe Region to the west of the country. Construction began in December 2015, with an initial budget of $111 million, almost immediately following the signing of the MoU between Berdibek Saparbayev, the mayor of Aktobe Region, and Xu Yongmuo, president of Huaxin Cement. The signing ceremony was attended by Karim Massimov, Prime Minister of Kazakhstan, delegates from Beijing and Astana, and representatives from 300 enterprises across Kazakhstan and China. The plant will pioneer new techniques in dry processing of clinker, and is located close to the Trans-Aral Railway, with its link to Russia, and the high-speed rail link from Aktobe city to Astana. (The factory is also notable for being the first in Kazakhstan to replace coal with gas, in a bid to be powered by a more environmentally friendly means.)

[jailbird] 10/1/2018 18:11

I would like Steppe's BoD mention the importance to the Co of the Silk Road or China’s emerging Belt and Road Initiative to it's growth going forward.

I have not heard them mention yet

[celeritas] 10/1/2018 17:57

The Chinese are determined to throw their weight into the Kazak economy.

More building will only increase cement demand.

[celeritas] 10/1/2018 15:19

Number of housing transactions increased in Kazakhstan
10 January 2018 09:28 (UTC+04:00)

Baku, Azerbaijan, Jan. 10

By Nigar Guliyeva – Trend:

The number of transactions for purchase and sale of housing in Kazakhstan amounted to 239,588in January-December 2017 and increased by 26 percent compared to 2016, the Statistics Committee of the National Economy Ministry of Kazakhstan reported.

In December 2017, the number of registered transactions for the purchase and sale of housing amounted to 18,902 and compared to the previous month decreased by 7.9 percent.

The average cost per square meter of new housing in December 2017 was 253,242 tenge and kept unhinged compared to the previous month, since December 2016 - increased by 1.3 percent.

The average cost of reselling one square meter of well-maintained housing in December was 185,666 tenge (unchanged from the previous month and 1.6 percent less than in December 2016), uncomfortable housing - 114,496 tenge (0 and 0.8 percent, respectively) .

The average cost of renting one square meter of comfortable housing in Kazakhstan last month was 1,329 tenge (an increase of 1.1 percent and an increase of 3.8 percent, respectively).

[jailbird] 06/1/2018 19:16

Good links Celera32k sold today Level 2 unchanged 4v3Real Spread prices now 22.6 / 23.45p

[celeritas] 03/1/2018 16:41

NEW TOWN FROM SCRATCH
A new town, called Nurkent, has been built from scratch - with apartment blocks, a school, kindergarten and shops to serve the railway workers, and crane operators, customs officials and other staff needed to keep the dry port running. Free housing is provided. The town has only about 1,200 residents, but there are plans to expand it for more than 100,000.

[jailbird] 02/1/2018 10:17

Wilo,

If that is the case , then I expect the update next week to 10 days to state introduction of the dividend...excellent news if fully franked :-)