Steppe Cement reported its 1H24 unaudited interim results with revenues amounting to US$34.4m, a seven per cent fall from US$36.9m in the corresponding period of 2023. The decline was mainly attributed to a four per cent drop in sales volume. The group made a loss after tax of US$3.5m in the 1H24 compared to US$0.1m profit after tax in the 1H23.
First-quarter trading saw an 18 per cent in sales for Steppe Cement, but this was offset by a two per cent rise in the 2Q24, while sales volumes have continued to recover as the price of cement fell. Sales for the Kazakhstan cement producer amounted to 719,294t in the 1H24, down from 749,034t in the 1H23.
The company's average price of cement was US$48/t in the 1H24, down from US$50/t in the 1H23. The gross margin decreased to 15 per cent in the 1H24 compared to 26 per cent in the 1H23, due mostly to a six per cent higher electricity cost and maintenance for the period. Selling and administration expenses remained constant at US$6.1m.
As at 30 June 2024, Steppe Cement’s borrowings totalled US$5.4m, with a cash balance of US$2.0m, resulting in a net debt of US$3.4m. At 30 June 2023 the company had borrowings of US$6.7m and a cash balance of US$6.0m, leading to a net debt of US$0.7m. The cash was used to fund a reduction and repayment of capital of US$4.16m, as announced on 5 April 2024, and to build a higher clinker and cement inventory, valued at US$5m as of 30 June 2024.
Kazakhstan market update
During the 1H24 the Kazakhstan cement market contracted by 1.6 per cent compared to the same period of 2023. Steppe Cement expects to maintain its 14 per cent market share for the full financial year ending 30 December 2024.
Cement exports from Kazakhstan fell to 0.46Mt in the 1H24 compared to 0.55Mt in the 1H23. Meanwhile, cement imports in the 1H24 represented 3.7 per cent of the market share, 0.5 per cent less than in the 1H23.
