Business
Results and Annual Report for 2015
Results and Annual Report for 2015.
About this update from Steppe Cement Ltd
[{"type":"text","content":"\n \nRNS Number : 2070Z Steppe Cement Limited 25 May 2016 \n\n25 May 2016\n \nSteppe Cement Ltd\nResults and Annual Report for 2015\n \nCEO STATEMENT\n \nThe 2015 results were significantly affected by the sharp devaluation of the Kazakhstan Tenge (KZT) against our reporting currency between August 2015 and January 2016. The relative strength of the KZT against the rouble until August forced local producers to lower their selling prices to fence off imports into Kazakhstan. As a result, our sales volume in tonnes increased only by 2% while the price in KZT decreased by 8%. After September imports slowed down significantly, but so did the economy as well as the cement consumption. \n \nIn 2015 we produced exclusively from the dry lines and, as a consequence, our cost of production was lowered more than our selling price, thereby increasing our gross margin. Steppe Cement operated Line 5 at 85% of its current capacity (1.1 million tonnes) and Line 6 at 87% of capacity (0.8 million tonnes). With small capital investments taking place in 2016 and 2017, we expect to increase the capacity to 1.2 million tonnes in Line 5 and 1.0 million tonnes in Line 6. \n \nSteppe Cement was able to hedge some of the impact of the devaluation as it maintained a healthy cash balance in USD during the year and devoted most of its cash flow to repay term loan principal (USD13.2 million) and interest. Besides, the short-term credit lines available were increased to KZT3.8 billion as at end of the year. \n \nShareholders' funds reduced from USD117.7 million to USD56.7 million over the year due to the combined effect of a USD3.4 million loss for the year and a USD57.6 million charge against asset carrying values arising from the substantial devaluation of the KZT to the USD over the course of the year (from 182 to 339). However as most of the assets required to build a new cement factory are denominated in USD, the replacement cost for the cement plant would be relatively unchanged in USD terms.\n \n\n\n\n\n Key financials\n\n\nYear ended\n31- Dec-15\n\n\nYear ended\n31-Dec-14\n\n\nInc/(Dec)%\n\n\n\n\nSales (tonnes of cement)\n\n\n1,643,136\n\n\n1,612,709\n\n\n2%\n\n\n\n\nConsolidated turnover (KZT million)\n\n\n19,537\n\n\n20,926\n\n\n(7%...