LONDON (ShareCast) - (Sharecast News) - Steppe Cement reported a 7% decrease in first-half revenue on Friday, to $34.4m, compared to $36.9m in the same period last year.
The AIM-traded firm said the decline was primarily due to a 4% reduction in sales volume, although a partial recovery was seen in the second quarter following price adjustments.

It recorded a net loss of $3.5m for the period, compared to a small profit of $0.1m in the first half of 2023.

The average sales price of cement fell slightly to $48 per tonne, down from $50 per tonne in the prior year.

Gross margins dropped significantly to 15%, from 26% in the first six months of 2023, largely due to a 6% increase in costs for electricity and maintenance.

Despite stable selling and administrative expenses, the higher production costs impacted profitability.

Steppe Cement's production costs rose 6% due to increased expenses for electricity, diesel, and consumables.

Notably, the company revamped its kiln in Line 5 for the first time since its startup.

Production volumes of clinker increased 7% in the first half and continued to grow in the third quarter.

The company also started producing and selling a new mineral powder product, using its spare mill capacity.

It said the Kazakh cement market contracted by 1.6% in the first half of 2024, although Steppe Cement expected to maintain or slightly increase its market share, which currently stood at around 14%.

Export volumes fell to 0.46 million tonnes from 0.55 million tonnes in 2023, while imports accounted for 3.7% of the local market, down 0.5% from last year.

On the financial side, Steppe Cement's total finance costs for the period amounted to $0.6m, primarily due to interest expenses on bank debt and lease liabilities.

The company's borrowings totaled $5.4m as of 30 June, with a cash balance of $2m, resulting in a net debt of $3.4m.

That compared to a net debt of $0.7m at the same time last year, as cash was used to reduce capital and build higher clinker and cement inventory.

Despite the challenging market conditions, the firm said it remained focused on operational improvements and maintaining its market position as it navigated the rest of the financial year.

At 1314 BST, shares in Steppe Cement were down 9.74% at 13.99p.

Reporting by Josh White for Sharecast.com.

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