Kazakhstan: Steppe's 1H volumes edge ahead, revenue falls

In the first half of 2015, Steppe Cement Ltd sold 717,654t of cement for KZT8277m (US$44.3m), which compares with 709,459t of cement for KZT9125m in the first half of 2014. This represents an increase of one per cent and a decrease of nine per cent, respectively over the same period in 2014.

The company said in a statement that the average price for the current period for delivered cement was KZT11,533/t excluding VAT (EUR56), compared with KZT12,862/t (EUR62) in the corresponding period of 2014. The ex-factory price for the current period was KZT9665/t, compared with KZT10,797/t in the corresponding period of 2014.

The market reduction in selling price was driven by the unfavorable Rouble exchange rate against the Kazakh Tenge. Steppe Cement chose to maintain its stock of clinker and push for higher volumes at higher prices in the third quarter, it said.

However, the situation has improved in June and July 2015 allowing price increases. Steppe noted that pricing in the second half will be influenced by the Rouble/Kazakh Tenge exchange rate and the cement market evolution.

Revised market estimates
The Kazakhstan cement market continued to recover in 2015, driven by public infrastructure. The cement volume sold in Kazakhstan increased by 10 per cent during the first half of 2015 compared to the same period last year. Over the same period Steppe Cement's market share fell to 17 from 19 per cent YoY.

The company has revised its estimate for domestic consumption upwards from 8.5Mt to 9.2Mt for 2015 and anticipates recovering the lost market share in the coming months.