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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Steppe Cement Ltd | LSE:STCM | London | Ordinary Share | MYA004433001 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.50 | 20.00 | 23.00 | 21.50 | 21.50 | 21.50 | 1,370 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Cement, Hydraulic | 86.73M | 17.78M | 0.0812 | 2.65 | 47.09M |
Date | Subject | Author | Discuss |
---|---|---|---|
01/10/2018 06:01 | Thanks Wilo | jailbird | |
01/10/2018 01:36 | VTB Capital Target Price upgrade on positive trends Steppe Cement remains a relatively cheap and attractive play on dividends and deleveraging, in our view, with a favourable market environment supporting our positive outlook for cash generation. The company trades at over 70% discount to global peers on its 2018 EV/capacity of USD 36/t and 47-48% discounts on 2018-19F EV/EBITDA of 3.5-3.8x, we estimate. Even though its 2017 profitability was lower than we had forecast, we have increased our 2018 estimates to reflect the current trends (but conservatively leave our medium term forecasts largely unchanged). With these changes factored in, we are raising our 12-month Target Price 6% to GBp 33.00, which implies an ETR of 58%. Buy reiterated. Positive trends in prices and volumes. Based on the latest data from Kazstat, ex-works cement prices in Kazakhstan increased 6% in May, both YoY and MoM. We believe that this reflects positive demand trends (as the high season is gaining momentum) along with export opportunities, which allowed producers to start shifting their costs onto consumers. Our new forecast assumes that Kazakhstan’s cement market will expand 6% YoY to 9.5mnt in 2018, while Steppe Cement’s output will increase 3% YoY to 1.75mnt (vs. 1.69mnt forecast previously). We also project Steppe Cement’s average ex-works price for the year to be 13% YoY higher at USD 38/t (vs. USD 37/t forecast previously). These changes largely underlie the upward revisions of our 2018 forecasts. In particular, we lifted our 2018 revenue and EBITDA projections 6% and 8%, respectively. More cautious mid-term outlook. Meanwhile, we believe that the Kazakh cement market will remain well supplied in the medium term, with the capacity addition of 1mnt in Southern Kazakhstan (Shieli), which we now factor in from 2019, potentially pressuring pricing in the biggest regional cement market. In particular, we estimate that capacity utilisation in Kazakhstan will decrease from 78% in 2017 to 74% in 2019-20, before starting to grow again. This might preclude any strong price increases, in our view. For this reason, our EBITDA forecasts for 2019-22F remain largely unchanged. Nevertheless, we believe that Steppe Cement will be able to generate sufficient cash flows in the medium term, which will lead to lower leverage and attractive dividends, in our view. Attractive dividends. Steppe Cement has recommended GBp 1/share for the 2017 dividend, which implies a 5% yield. We project that the dividend will double next year in absolute terms. In our view, a part of this amount could potentially be distributed in the autumn as an interim dividend. We also believe that Steppe Cement will increase dividend payments in absolute terms, as it will continue to generate solid cash flows amid lower leverage. Net debt stood at USD 17mn at YE17 (1.6x EBITDA) and we expect it to go down to USD 6mn at YE18 (0.3x). Valuation and risks. We derive our 12-month Target Price from a DCF model (WACC 15.2%, TGR 2%). The key downside risks are related to FX fluctuations, cement prices and competition, as well as the overall economic environment and cement market trends. Vladimir Bespalov,Equities Analyst +7 495 663 46 51 // vladimir.bespalov@vt | wilo101 | |
26/9/2018 12:04 | Softly, softly catchee monkey. FY results even without any contracts post cement conference next month, should reinforce the progress to date. | azalea | |
26/9/2018 11:13 | Even news is all positive , I am struggling to see what will light this up... there is hardly any volume on most days .Just not an exciting sector for PIsNot sure we will see any interested party on taking this over anytime soon. As long as there is a dividend again , I shall be happy enough. | jailbird | |
26/9/2018 09:25 | took a few more while quiet | mattjos | |
21/9/2018 06:40 | By 2021, the 300 two year old rolling stock should have paid for itself. | azalea | |
20/9/2018 21:52 | You're not concerned that the dividend isn't even half covered? | zangdook | |
20/9/2018 19:16 | Debt here secured on the rolling stock , which is something tangible and readily saleable so, am more relaxed about it. | mattjos | |
20/9/2018 17:32 | Last time we saw that, a large shareholder had accumulated...maybe again? Last Holding RNS Apollo Asia Fund Limited that it has acquired 8,649,054 ordinary shares in Steppe Cement at average price of GBP 0.2578 | jailbird | |
20/9/2018 17:12 | Some rather large delayed trades? | king suarez | |
20/9/2018 14:50 | All debt could be repaid today if needs must, it is not an issue at all but with only 2 prior dividends in 2005 and 2015 shareholders need to see them getting monies hence the recent 2017 dividend and every year going forward | wilo101 | |
20/9/2018 14:35 | Mattjos You recently posted on HGM that a combination of debt and dividend was a red flag for you - does that not concern you here? I know the debt is less, but then so is the whole scale. | zangdook | |
18/9/2018 18:16 | Nice steady set of results. Debt continues to reduce & their action to focus on selling price & gross margin indicates management do not feel 'desperate' to sell product for cash.Reassuringly, completely off radar for 99.9% but, will absolutely feature in about 2 years time. Will keep averaging in whilst under 50p & attaching dividend makes that decision all the easier. Suggest we ensure the thread flatlines for next 2 years :-). ttfn. | mattjos | |
18/9/2018 11:43 | A solid first half, with the company continuing to reap the rewards of its massive investment in highly efficient dry line production systems and rail wagons. | azalea | |
18/9/2018 10:08 | Thanks wilo101 - I missed the RNS. Yes, those results are looking very good. Cashflow from operations $4.9m for the 6 months compared to $0.2m in the prior comparative period. Another $1.7m of long term debt paid down - reducing interest costs further. When you consider that FY operating cashflow for 2017 was $12.2m, then evidently the 2nd half of the year should be even more cash generative and we could be looking at closer to $20m+ for 2018? Any thoughts on what the spending of $2.4m on plant, property, equipment has been? I see most of this is listed as 'transfers' under machinery and equipment spend for the period - do you know what that means? I understood from the 2017 annual report that capital expenditure should be reducing for the near term future, but this already exceeds the capex spend for the FY 2017. I know the company is/was spending on packing facilities for cement bagging - do you think the capex this half year is ongoing related to the increased production, or more 'one off' spending - we will find out in the FY 2018 report I guess. KS | king suarez | |
18/9/2018 09:47 | Looking good bu the period from 30 June to the end of October, mid November is the key to a very profitable financial year. | wilo101 | |
18/9/2018 09:43 | now posted: Steppe Cement Ltd Interim Results for the Half Year 30 June 2018 and General Market Update 1. Interim Results Steppe Cement Ltd ("Steppe Cement" and "the Company") posted a consolidated profit after tax of USD0.2 million for the six months ended 30 June 2018. 6 months ended 30 June 18 6 months ended 30 June 17 % of change Sales (Tonnes) 738,228 650,333 14% Consolidated turnover KZT million 10,539 8,553 23% Consolidated turnover (USD Million) 32.8 26.8 22% Consolidated profit (loss) after tax (USD Million) 0.2 (0.3) Profit (loss) per share (Cents) 0.1 (0.2) Average exchange rate (USD/KZT) 326 319 · The Company continued its strategy of focusing on price rather than in volume until the summer. · The average ex-factory price increased from 11,147 KZT /tonne to 11,560 KZT /tonne or 4% during the period. · Steppe Cement's gross margin increased from 27% to 32% in USD terms mostly because of better pricing in markets further from the factory. · Selling expenses increased as sales to the south and exports grew significantly. · Administrative expenses were maintained relative to turnover and were increased compared to 2017 due to bonus payment. · The Kazakh Tenge depreciated slightly in the first half by 2% compared to the first half of 2017. The company booked foreign exchange losses of USD 0.5 million in the first half of 2018 compared to a gain of USD 0.57 million in 1H2017. · The company generated operating profit before working capital changes of USD 5.4 million in 1H 2018 against USD 4.9 million in 2017. · The Kazakhstan economy grew at 4.1% in the first half 2018. · Reported inflation has been 2.9% until the end of August 2018. 2. Production costs · Cement production costs per tonne were maintained in KZT as inflation was offset by the higher volumes achieved. 3. Update on the Kazakh cement market · The Kazakh cement market grew at 5% during the first half of the year. Steppe Cement expects a market of about 9 million tonnes for the full year 2018 similar to 2017. · Steppe Cement increased its local market share from 14.5% in 1H2017 to 15.5% in 1H2018. We expect to achieve 17% for the full year. Exports represented 12% of the volumes in the 1H2018 from 10% last year. · Imports into Kazakhstan have increased by 30% in 2018 to 0.34 million tonnes and they represent 8% of the market up from 6% last year. · Exports from Kazakhstan have increased from 0.45 million tonnes to 0.92 million tonnes in the first half of 2018, mostly due to demand from Uzbekistan. · Exports from Kazakhstan now represent 19% of local production up from 11% last year. · Overall production of all factories in Kazakhstan has increased by 14% to 4.8 million tonnes for the 1H2018. This increase will most likely not be maintained in the second half. · Currently 78% of production in the country is coming from dry lines, an increase of 4% compared to last year's level. · Construction remains strong particularly in the west and south of the country. 4. Financing The debt position of the company as of 30 June 2018 comprised: · A capital loan of USD 4 million from Halyk bank at 6% p.a. interest due in 2019. · A long-term USD 7 million loan from Halyk Bank for the purchase of the wagons and repayable monthly till November 2021 at 6.5% p.a. and secured with the pledge of the wagons. · Loans of KZT1,688 million and KZT 580 million from Halyk Bank JSC subsidised by the government for capital investment at 6%. · We have maintained KZT3.9 billion of available working capital lines from Halyk Bank, Altyn Bank and VTB Bank. The current rates are 6% p.a. in USD and 12% p.a. in KZT. As of 30 June 2018 we had the equivalent of USD 2.7 million outstanding from these working capital loans. · As of 31 August 2018, the first Halyk bank loan of USD 4 million had been repaid and the working capital lines reimbursed. The total bank debt net of cash amounted to USD11 million of which 64% is denominated in USD and the balance in KZT. | wilo101 | |
18/9/2018 09:34 | Most companies seem to be reporting their interims tomorrow (19th) so hopefully we get results then too. | king suarez | |
16/9/2018 08:50 | wil101 Very interesting. The outcomes of the conference could herald a very positive game changer for STCM prospects. | azalea | |
15/9/2018 15:26 | Yes, it should be the full unaudited financial results for the half year to 30 June. We know prices and production volume from the July market update, but we don't know costs, margin, cash flow and what/how capex has been spent. Should hopefully provide some forward guidance for FY production, demand etc also? | king suarez | |
15/9/2018 14:22 | Are the results not just those through the first half, 30 June, but presumably with a recent trading update? There is an upcoming cement conference in Almaty, 29-31 October 2018, see: Tel.: +7 (499) 977 4968 Fax: +7 (499) 977 4495 e-mail: valev@businesscem.ms | wilo101 | |
14/9/2018 12:01 | Monday results I expect | jailbird | |
14/9/2018 07:09 | Thought it was you Good price on the recent dip | jailbird | |
13/9/2018 18:19 | Interims expected this week? The 2 small recent buys that have upped the price slightly were mine - apols if others wanted to top up below 25p! | king suarez |
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