Steppe Cement earnings rise even as sales slide
Steppe Cement reported a 2% decline in sales in its first half on Wednesday, to 0.76m tonnes, as its consolidated turnover in Kazakhstani tenge slipped 3% to KZT 13.68m.
The AIM-traded firm said that in dollars, its consolidated turnover was 9% weaker for the six months ended 30 June, at $33.8m.
Consolidated profit after tax improved to $4.1m from $3.1m a year earlier, however, while earnings per share came in at 1.9 cents, rising from 1.4 cents in the first half of 2019.
The company said it maintained prices from last summer until the Covid-19 crisis affected the second quarter, which led to the average ex-factory price decreasing by 3% to KZT 14,727 per tonne.
Its gross margin increased to 40% from 37% in dollar terms, however, due to cost containment measures, while selling expenses decreased by 20% per tonne in dollar terms and 13% in tenge terms due to distribution in areas closer to the factory, as well as the implementation of IFRS 16 as some of the rental fees for wagons had been transferred to financial leases, reducing the transport costs.
Administrative expenses remained constant in dollars.
The board noted that the tenge depreciated by 7% compared to the first half of 2019, which translated to a foreign exchange loss of $0.6m.
“The Kazakh cement market increased by 2% during the first half of the year,” the board noted in its statement.
“The increase happened mostly in the first quarter, while the second quarter was slightly below 2019.
“Steppe Cement currently expects a market of about 9.1 million tonnes for the full year 2020, an increase of 2% over 2019.”
At 0944 BST, shares in Steppe Cement were up 4.17% at 25p.
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