12 January 2024
Steppe Cement Ltd
("Steppe Cement" or the "Company")
Year End Trading Update
Steppe Cement (AIM: STCM), the AIM-traded Kazakh cement producer is pleased to announce the following trading update for the Year ended 31 December 2023. All numbers referenced below are unaudited.
· The Company continued its focus on the domestic market in Kazakhstan, due to increasing logistical and cost inefficiencies of transporting cement long distances / internationally. This resulted in reduced top-line revenue but is expected to translate into higher margins.
· Steppe Cement recorded revenue for the year ended 31 December 2023 of KZT 37,286 million (approximately USD 82 million), which was 7% lower (in KZT terms) than the KZT 40,203 million (approximately USD 87 million) recorded for the previous year.
· In 2023, cement sales volume was c.1.63 million tonnes, all sold domestically (3% lower than 2022).
· The average price (ex-VAT) for delivered cement was KZT 22,927 (approximately USD 50) per tonne in 2023, representing a 4% decrease (in KZT terms) on the KZT 23,963 (approximately USD 52) per tonne achieved in 2022.
· The average ex-factory price (being the average price less delivery costs) in 2023 stood at KZT 19,659 (approximately USD 43) per tonne compared to KZT 20,970 (approximately USD 45) per tonne in 2022.
The Company successfully completed the modification of the pre-calciner in Line 6 in December 2023 which will allow clinker production to increase whilst reducing energy consumption. Additionally, the Company was able to complete its full annual maintenance programme before the extreme winter conditions set in, which should allow the factory to operate at full efficiency over the current year. The Company will continue a limited capex program in 2024 with the installation of a raw mill separator in Line 6, which is expected to be completed by the summer of 2024.
In 2023, the cement market consumption in Kazakhstan was 11.5 million tonnes (11.6 million tonnes in 2022) with Steppe Cement's local market share being 14.2% compared to 14.5% in 2022. Overall, Kazakhstan imported 0.5 million tonnes of cement (0.7 million tonnes in 2022) and exported 1.2 million tonnes (1.1 million tonnes in 2022).
Official inflation in Kazakhstan was reduced to 9.8% but will continue to impact the production and labor costs in 2024.
The full results and audited accounts denominated in USD are expected to be published in Q2 2024.
FX conversions are based on 2023's average exchange rate of USD:KZT of 1:456 (1:461 in 2022).
For further information, please contact:
Steppe Cement Limited www.steppecement.com
Javier del Ser Pérez, Chief Executive Officer Tel: +(603) 2166 0361
Strand Hanson Limited (Nominated & Financial Adviser and Broker) www.strandhanson.co.uk
James Spinney / Ritchie Balmer / Robert Collins Tel: +44 20 7409 3494
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.
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