12 July 2024
Steppe Cement
Limited
("Steppe
Cement" or the "Company")
Result of AGM and Market
Update for the First Half of 2024
Steppe Cement is pleased to announce
that the resolutions proposed at the Company's Annual General
Meeting held today were duly passed.
The Company also provides the
following trading update for the first half of 2024 ("H1 2024" or
the "Period"). All numbers referenced below are
unaudited.
In H1 2024, the Company sold 719,294
tonnes of cement for KZT 15,343 million (approximately USD 34
million), compared with 749,034 tonnes of cement for KZT 16,977
million (approximately USD 38 million) in the corresponding period
in 2023 ("H1 2023"). The volume of sales and turnover decreased by
3.9% and 9.6% respectively.
As a consequence of increased
competition, the average price for the Period for delivered cement
was KZT 21,331 (approximately USD48) per tonne (excluding VAT),
compared with KZT 22,665 (approximately USD 50) per tonne in H1
2023. The ex-factory price for the current period was KZT 18,873
(approximately USD 42) per tonne, compared with KZT 19,205
(approximately USD 43) per tonne in H1 2023. Pressure in pricing
was mitigated by the reduction in delivery costs as the Company
focused on markets closer to the factory, namely Karaganda and
Astana. Following a weak pricing
environment in H1 2024, the Company expects prices to improve in
the second half of 2024.
The cost of transport and some
utilities, particularly electricity, have significantly increased
year-on-year. However, sales focus in local markets,
better production levels and higher productivity
have partially compensated for these increased
costs.
In H1 2024, the cement market in
Kazakhstan shrank by 1.6% compared to H1 2023. There was a
significant decrease in demand in the first quarter of the year.
However, the market has recovered since the end of May.
The Company's market share for
cement in H1 2024 was 13.6%. The Company lost market share in the
first quarter as there was an increased focus on the central and
northern Kazakhstan markets which are less active due to climatic
conditions. However, due to improvements in production, the Company
currently carries a significantly higher inventory than in 2023.
The Company managed to increase sales volumes in early June and
increased its market share to 17% at the end of H1 2024. Sale
volumes in 2024 are expected to be above those of 2023.
Exports from Kazakhstan were reduced
to 0.46 million tonnes compared to 0.55 million tonnes in 2023, and
imports represented 3.7% of the local market which was 0.5% less
than in 2023.
The Company currently estimates that
total demand in the Kazakh cement market will be similar to 2023 at
11 million tonnes.
Inflationary pressures have started
to ease in H1 2024 to 8.4% compared to 14.6% in the corresponding
period in 2023. The National Bank base interest rate stands at
14.50% (compared to 16.75% in 2023), while the Kazakh Tenge has
devalued by 5% against the USD since early June.
**ENDS**
For further information, please
contact:
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Steppe Cement Limited
|
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Javier del Ser Pérez, Chief
Executive Officer
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Tel:
+(603) 2166 0361
|
|
|
|
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Strand Hanson Limited (Nominated & Financial Adviser and
Broker)
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www.strandhanson.co.uk
|
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James Spinney / Robert Collins /
Ritchie Balmer
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Tel: +44
20 7409 3494
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The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019