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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 : 7442F
Steppe Cement Limited
22 May 2017
CEO STATEMENT
The 2016 results versus 2015 were conditioned by the sharp devaluation of the Kazakhstan Tenge (KZT) in August 2015 against our reporting currency. The weakness of the KZT against the rouble allowed the market to cut imports and increase exports significantly. The overall domestic market went down by 6% and our sales volume decreased by 4% while the price in KZT decreased by 4%.
In 2016 we produced exclusively from the dry lines and our cost of production increased in line with official inflation of 8.5%.
Steppe Cement operated Line 5 at 84% of its current capacity (1.1 million tonnes) and Line 6 at 74% of capacity (0.8 million tonnes) as we took an extended repair period to increase its reliability and capacity for 2017. We expect to increase the capacity of Line 6 to 0.9 million tonnes.
Shareholders' funds increased marginally to USD58 million from USD56.7 million over the year. The assets remain many times undervalued compared to their replacement costs due to the devaluation of the local currency.
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Key financials Year ended Year ended Inc/(Dec)%
31- Dec-16 31- Dec-15
---------------------------- ------------ ------------ -----------
Sales (tonnes of cement) 1,570,140 1,643,136 (4%)
---------------------------- ------------ ------------ -----------
Consolidated turnover
(KZT million) 17,941 19,537 (8%)
---------------------------- ------------ ------------ -----------
Consolidated turnover
(USD Million) 52.5 93.6 (44%)
---------------------------- ------------ ------------ -----------
Consolidated profit/(loss)
before tax (USD Million) 0.7 (8.8) 108%
---------------------------- ------------ ------------ -----------
Consolidated profit/(loss)
after tax (USD Million) 0.2 (3.4) 106%
---------------------------- ------------ ------------ -----------
Profit/(Loss) per share
(US cents) 0.1 (1.5) 107%
---------------------------- ------------ ------------ -----------
Shareholders' funds (USD
Million) 58.0 56.7 2%
---------------------------- ------------ ------------ -----------
Average exchange rate
(USD/KZT) 342 222 (54%)
---------------------------- ------------ ------------ -----------
Exchange rate as at year
end (USD/KZT) 333 339 1%
---------------------------- ------------ ------------ -----------
In 2016 Steppe Cement posted a marginal net profit of USD 0.2 million. Steppe Cement's EBITDA decreased to USD 9.7 million from USD 22.7 million in 2015 mostly due to the devaluation of the KZT against the USD, lower pricing and the reversal of provision of electricity charges.
The overall market volume decreased by 6% in 2016 and we expect the trend to continue in 2017
The Kazakh cement market in 2016 was 9 million tonnes, a decrease of 6% compared to 9.6 million tonnes in 2015. The devaluation made imports decrease by 63% to 0.47 million tonnes and exports increase by 270% to 0.41 million tonnes. The local producers' market share increased to 94%.
Our expectations are that overall market demand in 2017 will decrease by 5 to 10%. The demand depends upon the government investment plans and macroeconomic situation. We expect the demand to drop in the Astana region with the completion of the Expo 2017 but grow in infrastructure and smaller cities development. Population continues to concentrate in the cities and population growth is occurring mostly in the southern regions and around Astana.
After the sharp devaluation of KZT, exports continue to increase from 0.1 million tonnes in 2015 to 0.4 million in 2016 helping local companies increase slightly their overall volumes. The companies that increased more were Standard Cement and Shymkent Cement both with new commissioned dry kilns.
In 2017 the local cement factories should increase significantly again their export levels to try to compensate the drop in domestic demand while imports will remain contained to regions near the Russian border.
Steppe Cement's average cement selling prices decreased by 4% in KZT and by 39% in USD (equivalent to 33.4 USD per tonne) due to the devaluation of the KZT.
Line 5 produced 923,243 tonnes of cement while Line 6 produced 594,429 tonnes as it was shut down for extended maintenance in the spring.
Capital investment in 2016 took advantage of the availability of subsidized credit line
During 2016 capital investment was increased to USD4.8 million from USD2 million in 2015.
Steppe Cement obtained a credit facility of 1.69 billion denominated in KZT at 6% and repayable over 10 years. The facility was used mostly in the first four months of 2016 to improve the reliability of the milling department and in logistics i.e. silos, loading areas, bagging plant capacity increase and the terminal in Astana.
Cost were increased in line with inflation and were affected but the extended maintenance period of Line 6
Average cash production of cement in KZT increased in line with inflation but was reduced to USD21/tonne from USD30/tonne in 2015.
Selling expenses, reflecting mostly cement delivery costs, were reduced to USD 5/tonne from USD 8/tonne in 2015.
General and administrative expenses
General and administrative expenses decreased by 41% to USD 4.7 million from USD 8 million in 2015 due mostly to management efforts and the effect of devaluation.
The labour count stood at 724 on 31 March 2017 compared with 785 on 31 March 2016. We will continue to optimize the labor count until the end of 2017.
Dry lines' improved operating performance
In 2016 Line 5 contributed 60% of sales and Line 6 the balance. After the repairs in line 6 that took place in the spring, its capacity has increased and it will available for the summer 2017.
Line 5's current capacity is 1.1 million tonnes of cement and Line 6 is 0.9 million tonnes.
Financial position: Continuous debt reduction and compliance with ratios
During the year we maintained our non-current portion of borrowings from USD14.9 million to USD15.4 million. We repaid USD 7.3 million in principal to VTB Bank before we refinanced the balance of long term loans with Halyk Bank to save withholding tax. The effective interest rate in the long term loans in USD went down from 7.8% to 6.3%.
In the first six months of 2016 we completed the draw down of the subsidized investment capital loan of KZT 1.69 billion (equivalent to USD4.9 million) for 10 years at 6%.
The current portion of borrowings was reduced from USD 15.8 million in 2015 to USD11 million in 2016 as we controlled the draw down of the short-term lines and limited the cash position at the end of year to USD1 million from USD2.4 million at 31 December 2015. We consider the risk of further devaluation is now much lower and therefore we have chosen to borrow short term mostly in USD this winter as the interest differential was 10%. Therefore we have been borrowing at 6% in USD during the first quarter of 2017.
In KZT we maintain three short term credit lines available:
- A KZT 3 billion from Halyk Bank that includes a government subsidized program of KZT0.5 billion in KZT at 6%.
- A line of 0.9 billion KZT from Altyn Bank. - A working capital loan from VTB Bank Kazakhstan for 1 billion at 12.5% signed in March 2017.
In 2016 finance costs decreased to USD2.8 million from USD4.2 million in 2015 due to the continuous repayment of loan principals.
All covenants under the various credit lines have been met comfortably.
Depreciation decreased to USD6.8 million in 2016 from USD10.7 million in 2015 mostly due to the exchange rate.
The statutory corporate income tax rate remains at 20% in Kazakhstan.
Javier del Ser
Chief Executive Officer
2016 Annual Report and Annual General Meeting
Steppe Cement expects to release its 2016 Annual Report on its web site at www.steppecement.com during the week commencing 23 May 2017.
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)
AND ITS SUBSIDIARY COMPANIES
STATEMENTS OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2016
The Group The Company
2016 2015 2016 2015
USD USD USD USD
Revenue 52,479,370 93,632,720 100,000 100,000
Cost of sales (36,870,866) (60,383,321) - -
------------ ------------ --------- -----------
Gross profit 15,608,504 33,249,399 100,000 100,000
Selling expenses (8,368,084) (13,082,506) - -
General and
administrative
expenses (4,759,148) (8,037,254) (290,771) (383,830)
Interest income 5,205 40,584 - -
Finance costs (2,783,082) (4,215,275) - -
Net foreign
exchange gain/(loss) 657,937 (16,376,575) 164,559 72,203
Other income/(loss),
net 320,449 (94,795) - -
Impairment
loss on investment - - - (4,000,001)
Impairment
loss on property,
plant and
equipment - (298,397) - -
Profit/(Loss)
before income
tax 681,781 (8,814,819) (26,212) (4,211,628)
Income tax
(expense)/credit (505,779) 5,433,161 - -
------------ ------------ --------- -----------
Profit/(Loss)
for the year 176,002 (3,381,658) (26,212) (4,211,628)
============ ============ ========= ===========
Attributable
to:
Shareholders
of the Company 176,002 (3,381,658) (26,212) (4,211,628)
============ ============ ========= ===========
Earnings/(Loss)
per share:
Basic and
diluted (cents) 0.1 (1.5)
============ ============
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
The Group The Company
2016 2015 2016 2015
USD USD USD USD
Profit/(Loss)
for the year 176,002 (3,381,658) (26,212) (4,211,628)
Other comprehensive
income/(loss):
Items that will
not be reclassified
subsequently
to profit or
loss:
--------------------------
Revaluation gain
on porperty,
plant and equipment,
net of tax - 124,531 - -
Impairment loss
on property,
plant and equipment,
net of tax - (142,081) - -
Items that may
be reclassified
subsequently
to profit or
loss:
--------------------------
Exchange differences
arising on translation
of foreign operations,
net of tax 1,138,811 (57,566,026) - -
Total other comprehensive
income/(loss) 1,138,811 (57,583,576) - -
--------- ------------ -------- -----------
Total comprehensive
income/(loss)
for the year 1,314,813 (60,965,234) (26,212) (4,211,628)
Attributable
to:
Shareholders
of the Company 1,314,813 (60,965,234) (26,212) (4,211,628)
========= ============ ======== ===========
STATEMENTS OF FINANCIAL POSITION
AS OF 31 DECEMBER 2016
The Group The Company
2016 2015 2016 2015
USD USD USD USD
Assets
Non-Current
Assets:
Property, plant
and equipment 71,886,844 71,787,157 - -
Investment
in subsidiary
companies - - 26,500,001 26,500,001
Advances 458,619 1,270,919 - -
Other assets 1,439,233 2,442,499 - -
Deferred taxes 47,097 549,669 - -
---------- ---------- ---------- ----------
Total Non-Current
Assets 73,831,793 76,050,244 26,500,001 26,500,001
---------- ---------- ---------- ----------
Current Assets
Inventories 16,162,477 13,319,832 - -
Trade and other
receivables 3,168,763 2,290,736 - -
Income tax
recoverable 505,359 547,232 - -
Loans and advances
to subsidiary
companies - - 39,710,120 39,845,904
Advances and
prepaid expenses 1,076,849 1,432,447 9,128 6,582
Cash and cash
equivalents 1,023,205 2,406,309 73,636 338,124
---------- ---------- ---------- ----------
Total Current
Assets 21,936,653 19,996,556 39,792,884 40,190,610
---------- ---------- ---------- ----------
Total Assets 95,768,446 96,046,800 66,292,885 66,690,611
========== ========== ========== ==========
The Group The Company
2016 2015 2016 2015
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 3,062,343 3,443,582 - -
Translation
reserve (106,985,770) (108,124,581) - -
Retained earnings/
(Accumulated
loss) 88,203,360 87,646,119 (8,454,098) (8,427,886)
------------- ------------- ----------- -----------
Total Equity 58,040,857 56,726,044 65,306,826 65,333,038
------------- ------------- ----------- -----------
Non-Current
Liabilities
Borrowings 15,453,251 14,857,018 - -
Deferred income 1,525,359 517,778 - -
Provision for
site restoration 59,003 51,265 - -
Total Non-Current
Liabilities 17,037,613 15,426,061 - -
------------- ------------- ----------- -----------
Current liabilities
Trade and other
payables 7,577,986 4,485,684 - -
Accrued and
other liabilities 1,918,230 3,084,812 986,059 1,357,573
Borrowings 10,963,824 15,822,258 - -
Taxes payable 229,936 501,941 - -
Total Current
Liabilities 20,689,976 23,894,695 986,059 1,357,573
------------- -------------
Total Liabilities 37,727,589 39,320,756 986,059 1,357,573
------------- -------------
Total Equity
and Liabilities 95,768,446 96,046,800 66,292.885 66,690,611
============= ============= =========== ===========
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Distributable
The Group Share Revaluation Translation Retained Total
capital 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
=========== ============ ============== ============== ===========
Distributable
The Group Share Revaluation Translation Retained Total
capital reserve reserve earnings
USD USD USD USD USD
Balance as at 1
January 2015 73,760,924 3,986,065 (50,558,555) 90,502,844 117,691,278
----------- ------------ -------------- -------------- -------------
Loss for the year - - - (3,381,658) (3,381,658)
Other comprehensive
loss - (17,550) (57,566,026) - (57,583,576)
----------- ------------ -------------- -------------- -------------
Total comprehensive
loss for the year - (17,550) (57,566,026) (3,381,658) (60,965,234)
Other transactions
impacting equity:
Transfer on revaluation
reserve relating
to property, plant
and equipment through
use - (524,933) - 524,933 -
----------- ------------ -------------- -------------- -------------
Balance as at 31
December 2015 73,760,924 3,443,582 (108,124,581) 87,646,119 56,726,044
=========== ============ ============== ============== =============
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
The Group The Company
2016 2015 2016 2015
USD USD USD USD
CASH FLOWS FROM/(USED
IN) OPERATING ACTIVITIES
Profit/(Loss) before
income tax 681,781 (8,814,819) (26,212) (4,211,628)
Adjustments for:
Depreciation of
property, plant
and equipment 6,834,012 10,685,978 - -
Amortisation of
quarry stripping
costs 17,966 - - -
Amortisation of
site restoration
costs 1,580 2,430 - -
Loss on disposal
of property, plant
and equipment 65,760 545,175 - -
Impairment loss
on investment - - - 4,000,001
Impairment loss
on property, plant
and equipment - 298,397 - -
Interest income (5,205) (40,584) - -
Finance costs 2,783,082 4,215,275 - -
Net foreign exchange
(gain)/loss (657,937) 16,376,575 (164,559) (68,172)
Provision for obsolete
inventories 379,408 395,646 - -
Provision for doubtful
receivables 4,720 33,502 - -
Provision for advances
paid to third parties 2,400 39,347 - -
Recovery of doubtful
receivables (252) - - -
Reversal of provision
on advances paid
to third parties (31,045) - - -
Reversal of accrued
unused leaves - (6,799) - -
Reversal of provision
for electricity
charges (613,563) (1,922,083) - -
Deferred income (5,299) - - -
Operating Profit/(Loss)
Before Working Capital
Changes 9,457,408 21,808,040 (190,771) (279,799)
Movement in working
capital:
(Increase)/Decrease
in:
Inventories (2,923,072) (2,324,878) - -
Trade and other
receivables 495,396 1,844,366 135,784 531,165
Loans and advances - - - -
to subsidiary companies
Advances and prepaid
expenses 254,623 (909,535) (2,546) (851)
Increase/(Decrease)
in:
Trade and other
payables 3,016,254 452,420 - -
Accrued and other
liabilities (655,754) 1,462,067 (206,955) 90,977
------------ ------------ --------- -----------
Net Cash From/(Used
In) Operations 9,644,855 22,332,480 (264,488) 341,492
Income tax paid (106,731) (398,712) - (5,480)
Net Cash From/(Used
In) Operating Activities 9,538,124 21,933,768 (264,488) 336,012
------------ ------------ --------- -----------
CASH FLOWS FROM/(USED
IN) INVESTING ACTIVITIES
Purchase of property,
plant and equipment (4,810,425) (1,831,446) - -
Purchase of other
assets (48,749) (26,002) - -
Proceeds from disposal
of property, plant
and equipment 2,190 - - -
Interest received 5,205 40,584 - -
------------ ------------ --------- -----------
Net Cash Used In
Investing Activities (4,851,779) (1,816,864) - -
------------ ------------ --------- -----------
CASH FLOWS FROM/(USED
IN) FINANCING ACTIVITIES
Proceeds from bank
borrowings 36,522,283 20,184,000 - -
Repayment of bank
borrowings (39,840,598) (38,853,006) - -
Interest paid (2,755,206) (4,073,196) - -
------------ ------------ --------- -----------
Net Cash Used In
Financing Activities (6,073,521) (22,742,262) - -
------------ ------------ --------- -----------
NET (DECREASE)/INCREASE
IN CASH AND CASH
EQUIVALENTS (1,387,176) (2,625,358) (264,488) 336,012
EEFFECTS OF FOREIGN
EXCHANGE RATE CHANGES 4,072 (4,263,772) - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF
YEAR 2,406,309 9,295,439 338,124 2,112
------------ ------------ --------- -----------
CASH AND CASH EQUIVALENTS
AT END OF YEAR 1,023,205 2,406,309 73,636 338,124
============ ============ ========= ===========
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UURURBUAVURR
(END) Dow Jones Newswires
May 22, 2017 02:00 ET (06:00 GMT)
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