Steppe Cement has published its financial results for the first six months of 2016. Losses in dollar terms fell to US$1.5m from US$2.2m in the same period in 2015. However, due to a revaluation of the tenge, losses in the company’s operating currency rose from KZT407m (US$1.2m) in 1H2015 to KZT517.5m in 1H2016.
Turnover fell by 1.1 per cent to KZT8.2bn, but sales rose 6.1 per cent in volume terms to 0.76Mt. Revenues were hit by a fall in prices, which were down 9.1 per cent to KZT8781/t, driven by declining domestic demand. The Kazakh cement market shrank by an estimated 10 per cent in the first half of 2016 and Steppe is anticipating demand of 9Mt for 2016 as a whole, down by 0.6Mt on 2015.
Steppe’s production costs increased by four per cent in the period, which the company maintains, must be viewed in the light of inflation running at 13.8 per cent.
In the first six months of 2016, Steppe’s market share increased to 18 per cent and the firm is aiming to grow this to 19 per cent by the year end.
Overall production of cement in Kazakhstan remains at around 4Mt in 1H2016, while imports fell 63 per cent as the value of the tenge fell. The rebalancing of exchange rates allowed Steppe to export around 30,000t of cement in 1H2016, having not exported at all in 1H2015.
