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16 Sep, 2020 10:12

Steppe Cement earnings rise even as sales slide

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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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Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.