Steppe Cement first-half loss narrows, Kazakhstan

Steppe Cement Ltd Friday said its first-half loss before tax narrowed to US$2.29m from US$6.40m in the previous year.

Loss after tax totaled US$2.2m, narrower than the US$4.1m loss in the prior year.  Consolidated turnover fell to US$44.7m from US$51.8m. Sales increased to 717,654t from 709,459t.

The average ex-factory price decreased from 10 per cent to KZT10,797/t, due to competition from Russian companies helped by the Rouble exchange rate and the reaction of the main local factories to keep their market shares.

The company booked foreign exchange losses of US$0.7m in the first half, compared with US$5.1m in the previous year.

Update on the Kazakh cement market
The company said that the Kazakh cement market increased by 10 per cent during the first half of the year. Steppe  Cement expects demand to increase to 9.4Mt for full year 2015 from 8.5Mt in
2014.

Steppe Cement's market share declined from 19 per cent in 1H14 to 17 per cent in 1H15 as it chose to maintain a significant stock of clinker. "We will recover some of the market share during the 2H as we have sold most of our stock in the third quarter," the company added.

Imports into Kazakhstan have grown by eight per cent in 2015 in light of the weakness of the Russian
rouble and despite the new cement factory that opened in the west of Kazakhstan. Imports remain at 12 per cent market share, similar to last year.

Exports from Kazakhstan now represent  1.5 per cent of local production down from six per cent a year
ago. The relative strength of the Kazakh Tenge has forced the companies to sell almost all production locally.