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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% | 19.00 | 18.00 | 20.00 | 19.00 | 19.00 | 19.00 | 79,035 | 07:42:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Cement, Hydraulic | 86.73M | 17.78M | 0.0812 | 2.34 | 41.61M |
From Apr 2019 to Apr 2024
TIDMSTCM
RNS Number : 4165P
Steppe Cement Limited
29 May 2018
CEO STATEMENT
In 2017, Steppe Cement posted a net profit of USD 1.2 million. Steppe Cement's EBITDA increased to USD 11.6 million from USD 9.7 million in 2016 mostly due to higher prices and volumes.
The overall domestic cement market was stable at 9 million tonnes and our sales volume increased by 4%, while the price in KZT increased by 14%. The continued weakness of the KZT against the surrounding currencies has allowed the company to increase exports significantly.
In 2017 we produced exclusively from the dry lines and our cost of production per tonne in KZT increased by 15%, partly explained by higher coal prices, maintenance and the allocation of some of the annual maintenance cost of late 2016 to the early months of 2017.
Steppe Cement operated Line 5 at 95% of its current capacity (1.1 million tonnes) and Line 6 at 74% of capacity (0.8 million tonnes) as we continue the improvements to increase its reliability for 2018.
Shareholders' funds increased marginally to USD59.5 million from USD58 million. Due to the historical devaluation of the local currency over the years since the key investments were made, the replacement cost of the company's assets is many times higher than their current book value.
Hot Features
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Key Financials Year ended Year ended Inc/(Dec)%
31- Dec-17 31- Dec-16
Sales (tonnes of cement) 1,630,230 1,570,140 4
------------ ------------ -----------
Consolidated turnover (KZT million) 21,443 17,941 20
------------ ------------ -----------
Consolidated turnover (USD million) 65.9 52.5 25
------------ ------------ -----------
Consolidated profit before tax
(USD million) 1.9 0.7 184
------------ ------------ -----------
Consolidated profit after tax
(USD million) 1.2 0.2 602
------------ ------------ -----------
Profit per share (US cents) 0.6 0.1 602
------------ ------------ -----------
Shareholders' funds (USD million) 59.5 58.0 3
------------ ------------ -----------
Average exchange rate (USD/KZT) 326 342 (5)
------------ ------------ -----------
Exchange rate as at year end (USD/KZT) 332 333 0
------------ ------------ -----------
The overall market volume was stable in 2017 and we expect it to improve in 2018
The Kazakh cement market in 2017 was 9 million tonnes, the same as in 2016. Imports into Kazakshtan increased by 43% to 0.67 million tonnes or 7% of the total. Exports from local producers increased by 120% to 0.9 million tonnes generating a small net outflow of cement from the country for the first time.
Our expectations are that overall market demand in 2018 will increase by 4 to 7%. We expect the demand to grow stronger in the south / west regions and in the smaller cities. Kazakhstan's population has reached 18 million, implying that cement consumption per capita is now 500 kg per annum.
Improving exports helped local companies to increase slightly their overall volumes. The companies that benefited most were the ones in the south with new commissioned dry kilns in 2016. In the north a new competitor has started operating and will increase its production steadily during the year.
In 2018, the local cement factories should maintain these trends with greater exports to Uzbekistan helped as well by the local environment, as currency restrictions were lifted. Imports into Kazakhstan should remain contained to regions near the Russian border.
Steppe Cement's average cement selling prices increased by 15% in KZT and by 21% in USD, to USD 40.4 per tonne delivered.
Line 5 produced 1,050,183 tonnes of cement while Line 6 produced 580,047 tonnes as we continue to make changes to increase production in 2018 that are already having an effect in the first half. We expect Line 6 to contribute additional 150,000 tons in 2018.
Line 5's current capacity is 1.1 million tonnes of cement and Line 6 is 0.8 million tonnes and we expect them to operate at least at 90% capacity in 2018.
Capital investment in 2017 was limited to the new packing line financed at subsidised rates
During 2017, capital investment was reduced to USD1.6 million from USD4.8 million in 2016.
Most of the capex in 2017 was directed to packing and logistics, including a new 90 tonnes per hour packing plant and the increase of the big bag facility to 100 tonnes per hour.
Cost increased more than inflation due to coal and maintenance
The average cash production cost of cement increased to USD24/tonne from USD21/tonne in 2016, but is expected to be contained or reduced in 2018 as production and sales increase.
Selling expenses, reflecting mostly cement delivery costs, increased to USD7/tonne from USD5/tonne in 2016, due to higher transportation tarifs, less truck deliveries and increased shipments to more distant markets.
General and administrative expenses
General and administrative expenses decreased by 11% to USD4.2 million from USD4.8 million in 2016, due mostly to management efforts.
The labour count stood at 735 on 31 March 2018 compared with 724 on 31 March 2017.
Financial position: Continuous debt reduction
In 2017, we signed a new long term subsidized loan to build the new packing plant for KZT 580 million (equivalent to USD1.8 million) for 5 years at 6%.
During the year, our long term loans were reduced from USD15.4 million to USD 9.8 million. We repaid:
- The outstanding KZT1.5 billion bond - USD 3.5 million in principal to Halyk Bank for wagons and governement subsidised loans - And we drew KZT225 million from the new subsidised loan for the packing plant.
The effective interest rate in the long term loans in USD and KZT was maintained at 6.2%.
Our short term loans and current part of the long term loans were reduced to USD10 million in 2017 from USD11 million in 2016, while the cash position increased to USD3 million from USD1 million. We consider the risk of further devaluation is now much lower and therefore we have chosen to borrow short term mostly in USD from December 2017 as the interest differential was 6 to 8%, although we borrowed opportunistically at 10% in KZT when the banks offered it.
We maintain three short term credit lines available as stand by:
- KZT 3 billion from Halyk Bank at 6% in USD or 12% in KZT which includes a government subsidized program of KZT0.5 billion in KZT at 6%.
- KZT 0.9 billion from Altyn Bank at 10% in KZT. - KZT 3 billion from VTB Bank Kazakhstan at 11.5% signed in March 2018.
In 2017, finance costs decreased to USD2.2 million from USD2.8 million in 2016 due to the continuous repayment of loan principals.
All covenants under the various credit lines have been met comfortably.
Depreciation increased to USD7.3 million in 2017, from USD6.8 million in 2016, due to the capex made in previous years and the exchange rate.
The statutory corporate income tax rate remains at 20% in Kazakhstan.
Javier del Ser
Chief Executive Officer
2017 Annual Report and Annual General Meeting
Steppe Cement expects to release its 2017 Annual Report on its web site at www.steppecement.com during the week commencing 29 May 2018.
The Company's Annual General Meeting is expected to take place at its Malaysian Office at Suite 10.1, 10th Floor, West Wing, Rohas Perkasa, 8 Jalan Perak, Kuala Lumpur Malaysia on, 14 June 2017 at 2.30 p.m.
Steppe Cement's AIM nominated adviser and broker is RFC Ambrian Limited.
Nominated Adviser contact: Stephen Allen or Andrew Thomson on +61 8 9480 2500.
Broker contact: Charlie Cryer at +44 20 3440 6800
STEPPE CEMENT LTD
(Incorporated in Labuan FT, Malaysia under the Labuan Companies Act, 1990)
STATEMENTS OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2017
The Group The Company
2017 2016 2017 2016
USD USD USD USD
Revenue 65,855,137 52,479,370 3,535,005 100,000
Cost of sales (46,215,796) (36,870,866) - -
------------ ------------ --------- ---------
Gross profit 19,639,341 15,608,504 3,535,005 100,000
Selling expenses (11,819,521) (8,368,084) - -
General and administrative
expenses (4,241,309) (4,759,148) (270,136) (290,771)
Interest income 61,449 5,205 39 -
Finance costs (2,236,516) (2,783,082) - -
Net foreign exchange
(loss)/gain (205,610) 657,937 (81,355) 164,559
Other income,
net 736,727 320,449 - -
Profit/(Loss)
before income
tax 1,934,561 681,781 3,183,553 (26,212)
Income tax expense (703,091) (505,779) (4,941) -
------------ ------------ --------- ---------
Profit/(Loss)
for the year 1,231,470 176,002 3,178,612 (26,212)
============ ============ ========= =========
Attributable to:
Shareholders of
the Company 1,231,470 176,002 3,178,612 (26,212)
============ ============ ========= =========
Earnings per share:
Basic and diluted
(cents) 0.6 0.1
============ ============
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2017
The Group The Company
2017 2016 2017 2016
USD USD USD USD
Profit/(Loss) for
the year 1,231,470 176,002 3,178,612 (26,212)
Other comprehensive
income:
Items that may be
reclassified subsequently
to profit or loss:
---------------------------
Exchange differences
arising on translation
of foreign operations 244,646 1,138,811 - -
Total other comprehensive
income 244,646 1,138,811 - -
--------- --------- --------- --------
Total comprehensive
income/(loss) for
the year 1,476,116 1,314,813 3,178,612 (26,212)
Attributable to:
Shareholders of the
Company 1,476,116 1,314,813 3,178,612 (26,212)
========= ========= ========= ========
STATEMENTS OF FINANCIAL POSITION
AS OF 31 DECEMBER 2017
The Group The Company
2017 2016 2017 2016
USD USD USD USD
Assets
Non-Current Assets:
Property, plant and
equipment 67,358,584 71,886,844 - -
Investment in subsidiary
companies - - 26,500,001 26,500,001
Advances 508,555 458,619 - -
Other assets 1,247,835 1,439,233 - -
Deferred taxes - 47,097 - -
---------- ---------- ---------- ----------
Total Non-Current
Assets 69,114,974 73,831,793 26,500,001 26,500,001
---------- ---------- ---------- ----------
Current Assets
Inventories 13,013,642 14,169,249 - -
Trade and other receivables 3,101,667 3,168,763 3,435,005 -
Income tax recoverable 127,208 505,359 - -
Loans and advances
to subsidiary companies - - 39,605,291 39,710,120
Advances and prepaid
expenses 3,477,179 3,070,077 6,579 9,128
Cash and cash equivalents 3,045,336 1,023,205 12,985 73,636
---------- ---------- ---------- ----------
Total Current Assets 22,765,032 21,936,653 43,059,860 39,792,884
---------- ---------- ---------- ----------
Total Assets 91,880,006 95,768,446 69,559,861 66,292,885
========== ========== ========== ==========
The Group The Company
2017 2016 2017 2016
USD USD USD USD
Equity and Liabilities
Capital and Reserves
Share capital 73,760,924 73,760,924 73,760,924 73,760,924
Revaluation reserve 2,680,003 3,062,343 - -
Translation reserve (106,741,124) (106,985,770) - -
Retained earnings/
(Accumulated loss) 89,817,170 88,203,360 (5,275,486) (8,454,098)
------------- ------------- ----------- -----------
Total Equity 59,516,973 58,040,857 68,485,438 65,306,826
------------- ------------- ----------- -----------
Non-Current Liabilities
Borrowings 9,834,719 15,453,251 - -
Deferred taxes 637,777 - - -
Deferred income 1,519,487 1,525,359 - -
Provision for site
restoration 66,861 59,003 - -
Total Non-Current
Liabilities 12,058,844 17,037,613 - -
------------- ------------- ----------- -----------
Current liabilities
Trade and other payables 7,684,371 7,577,986 - -
Accrued and other
liabilities 2,229,254 1,918,230 1,069,482 986,059
Borrowings 10,194,584 10,963,824 - -
Taxes payable 195,980 229,936 4,941 -
Total Current Liabilities 20,304,189 20,689,976 1,074,423 986,059
------------- -------------
Total Liabilities 32,363,033 37,727,589 1,074,423 986,059
------------- -------------
Total Equity and Liabilities 91,880,006 95,768,446 69,559,861 66,292.885
============= ============= =========== ===========
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2017
Distributable
The Group Share capital Revaluation Translation Retained Total
reserve reserve earnings
USD USD USD USD USD
Balance as at 1 January
2017 73,760,924 3,062,343 (106,985,770) 88,203,360 58,040,857
-------------- ------------ -------------- -------------- -----------
Profit for the year - - - 1,231,470 1,231,470
Other comprehensive income - - 244,646 - 244,646
-------------- ------------ -------------- -------------- -----------
Total comprehensive income
for the year - - 244,646 1,231,470 1,476,116
Other transactions impacting
equity:
Transfer on revaluation
reserve relating to property,
plant and equipment through
use - (382,340) - 382,340 -
-------------- ------------ -------------- -------------- -----------
Balance as at 31 December
2017 73,760,924 2,680,003 (106,741,124) 89,817,170 59,516,973
============== ============ ============== ============== ===========
Distributable
The Group Share capital Revaluation Translation Retained Total
reserve reserve earnings
USD USD USD USD USD
Balance as at 1 January
2016 73,760,924 3,443,582 (108,124,581) 87,646,119 56,726,044
-------------- ------------ -------------- -------------- -----------
Profit for the year - - - 176,002 176,002
Other comprehensive income - - 1,138,811 - 1,138,811
-------------- ------------ -------------- -------------- -----------
Total comprehensive income
for the year - - 1,138,811 176,002 1,314,813
Other transactions impacting
equity:
Transfer on revaluation
reserve relating to property,
plant and equipment through
use - (381,329) - 381,239 -
-------------- ------------ -------------- -------------- -----------
Balance as at 31 December
2016 73,760,924 3,062,343 (106,985,770) 88,203,360 58,040,857
============== ============ ============== ============== ===========
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
The Group The Company
2017 2016 2017 2016
USD USD USD USD
CASH FLOWS FROM/(USED
IN) OPERATING ACTIVITIES
Profit/(Loss) before income
tax 1,934,561 681,781 3,183,553 (26,212)
Adjustments for:
Depreciation of property,
plant and equipment 7,265,935 6,834,012 - -
Amortisation of quarry
stripping costs 30,398 17,966 - -
Amortisation of site restoration
costs 1,656 1,580 - -
Dividend income - - (3,435,005) -
Loss on disposal of property,
plant and equipment 72,728 65,760 - -
Interest income (61,449) (5,205) - -
Finance costs 2,236,516 2,783,082 - -
Net foreign exchange loss/(gain) 205,610 (657,937) 79,897 (164,559)
Provision for obsolete
inventories 33,175 379,408 - -
Provision for doubtful
receivables 25,532 4,720 - -
Provision for advances
paid to third parties 43,782 2,400 - -
Reversal of provision
for obsolete inventories (356,280) - - -
Deferred income (49,096) (5,299) - -
Reversal of doubtful receivables (138) (252) - -
Reversal of provision
on advances paid to third
parties - (31,045) - -
Write-off of inventories 46,820 - - -
Reversal of provision
for electricity charges - (613,563) - -
Operating Profit/(Loss)
Before Working Capital
Changes 11,429,750 9,457,408 (171,555) (190,771)
Movement in working capital:
Decrease/(Increase) in:
Inventories 2,606,085 (929,844) - -
Trade and other receivables 430,552 495,396 - -
Loans and advances to
subsidiary companies - - 104,828 135,784
Advances and prepaid expenses (2,682,456) (1,738,605) 2,549 (2,546)
Increase/(Decrease) in:
Trade and other payables (140,863) 3,016,254 - -
Accrued and other liabilities 570,636 (655,754) 3,527 (206,955)
Net Cash From/(Used In)
Operations 12,213,704 9,644,855 (60,651) (264,488)
Income tax paid - (106,731) - -
Net Cash From/(Used In)
Operating Activities 12,213,704 9,538,124 (60,651) (264,488)
CASH FLOWS FROM/(USED
IN) INVESTING ACTIVITIES
Purchase of property,
plant and equipment (2,104,293) (4,810,425) - -
Purchase of other assets (68,273) (48,749) - -
Proceeds from disposal
of property, plant and
equipment 476,689 2,190 - -
Interest received 61,449 5,205 - -
Net Cash Used In Investing
Activities (1,634,428) (4,851,779) - -
CASH FLOWS FROM/(USED
IN) FINANCING ACTIVITIES
Redemption of bonds (4,483,495) - - -
Proceeds from bank borrowings 18,201,873 36,522,283 - -
Repayment of bank borrowings (20,045,342) (39,840,598) - -
Interest paid (2,235,965) (2,755,206) - -
Net Cash Used In Financing
Activities (8,562,929) (6,073,521) - -
NET INCREASE/(DECREASE)
IN CASH AND CASH EQUIVALENTS 2,016,347 (1,387,176) (60,651) (264,488)
EFFECTS OF FOREIGN EXCHANGE
RATE CHANGES 5,784 4,072 - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 1,023,205 2,406,309 73,636 338,214
CASH AND CASH EQUIVALENTS
AT END OF YEAR 3,045,336 1,023,205 12,985 73,636
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR PGUBAAUPRUWR
(END) Dow Jones Newswires
May 29, 2018 02:01 ET (06:01 GMT)
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