Steppe Cement reports lower production, revenue in first quarter

The AIM-traded firm said that marked a decrease of 18% in volume and 23% in revenue compared to the first quarter of 2023, where 214,832 tonnes were sold for KZT 4.94bn.

It said the average price per tonne of cement, excluding VAT, in the first quarter was KZT 21,545, down 6% year-on-year, while the ex-factory price for the first three months of 2024 stood at KZT 18,835 per tonne, down 2% compared to the first quarter of last year.

Steppe Cement's market share dipped to 11.5% in the first three months of 2024 from 12.7% in the same period of 2023.

The company cited increased transportation costs and low margins from shipments to Kazakhstan's southern region.

Despite operating at full efficiency, Steppe Cement said it had opted to build up clinker inventory in preparation for the upcoming summer season rather than engaging in sales at reduced prices during the smaller winter market in the northern regions.

Notably, clinker production jumped 25% compared to the first quarter of 2023, positioning the company favourably for the high-demand summer season.

In the broader market context, Kazakhstan saw a 12% decrease in cement sales during the first quarter compared to the same period in 2023.

Cement exports from Kazakhstan decreased 6%, primarily due to reduced exports to Uzbekistan.

Imports, constituting 4% of the market, remained stable, with the majority sourced from Russia.

Looking ahead, Steppe Cement estimated Kazakhstan's cement market demand for 2024 to be 11 million tonnes per annum, representing a 5% decrease from 2023 figures.

At 1118 BST, shares in Steppe Cement were down 15.04% at 17.42p.

Reporting by Josh White for Sharecast.com.