Steppe Cement posts 24% drop in 1Q revenue

Kazakhstan-based Steppe Cement reported revenue of KZT3.779bn (US$8.4m) in the first quarter of 2024, down 23.5 per cent from KZT4.938bn in the year-ago period. The company's market share in Kazakhstan contracted to 11.5 per cent in the 1Q24 from 12.7 per cent in the 1Q23.

Steppe Cement sold 175,383t of cement, representing a 18.4 per cent drop when compared with the 1Q23 when sales volumes stood at 214,832t. The average price received by the cement producer fell 6.3 per cent to KZT21,545/t from KZT22,985/t in the 1Q23. The ex-works price slipped 2.2 per cent to KZT18,835/t from KZT19,249/t over the same period.

Due to a significant increase in transportation costs, the company also reported lower margins, particularly in terms of deliveries to the southern part of the country. As sales in winter are comparatively small in the northern region when compared to those in summer, Steppe Cement said it is currently building up clinker inventory in preparation for the more lucrative summer season. Clinker production in the 1Q24 has increased by 25 per cent YoY.  

Market overview
The Kazakh cement market contracted by 12 per cent YoY to 1.69Mt in the 1Q24, with Steppe Cement forecasting demand in 2024 to reach 11Mt, down five per cent YoY.

Exports declined by six per cent in the 1Q24, mainly due to a drop in exports to Uzbekistan.

Imports, mainly from Russia were stable, representing four per cent of the market in the 1Q24.