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Key Points:
- Steppe Cement’s revenue grew by 7% in Q3 2024, reaching USD 32 million.
- Sales volume increased by 5% to 621,915 tonnes during the period.
- The company holds USD 11 million in cash, maintaining a strong financial position.
Steppe Cement Ltd (LSE:STCM), a prominent cement producer in Kazakhstan, has released its unaudited financial report for the third quarter ending 30 September 2024. The company recorded a significant improvement in its revenue and sales volume, driven by both increased demand and higher prices for its products. However, year-to-date performance remains slightly below last year's figures due to earlier market conditions.
Q3 2024 Performance
In the third quarter of 2024, Steppe Cement reported revenue of KZT 15,085 million (approximately USD 32 million), representing a 7% increase from the KZT 14,116 million (USD 31 million) recorded in Q3 2023. This growth was largely attributed to a 5% increase in sales volume, which reached 621,915 tonnes for the period. The company also implemented a 2% price hike on its products during the quarter, further contributing to the revenue boost.
For the first nine months of 2024, however, the company’s total revenue showed a slight decline. Steppe Cement generated KZT 30,520 million (USD 67 million), a 2% drop compared to KZT 31,093 million (USD 69 million) in the same period of 2023. Despite the overall decrease in revenue, the company maintained stable production levels, with a total of 1.34 million tonnes sold during the first three quarters of 2024, consistent with the previous year.
Price and Production Developments
Steppe Cement's average price per tonne for delivered cement during the first nine months of 2024 was KZT 22,755 (approximately USD 50), down slightly from KZT 23,163 (USD 51) per tonne in 2023. The decrease in the average price reflects competitive market conditions, but the company managed to offset this through increased sales volume and production efficiencies.
Higher production levels were supported by capital expenditures made over the last two years, which have enhanced the company's operational efficiency. These improvements stabilized the company’s cost base and increased clinker stocks in preparation for the fourth quarter. This increased production capacity will be crucial as the company looks to capitalize on the stable demand for cement in Kazakhstan.
Market Dynamics and Outlook
The domestic demand for cement in Kazakhstan remained steady at 9.1 million tonnes for the first nine months of 2024, mirroring the figures from 2023. Imports into Kazakhstan decreased, accounting for 3.5% of total consumption, compared to 4.6% during the same period in 2023. Exports from Kazakhstan amounted to 0.72 million tonnes, facing higher competition from Uzbekistan.
Steppe Cement expects the Kazakhstani cement market to maintain a total consumption of around 11.3 million tonnes for the full year of 2024, consistent with the previous year. The company’s market share is anticipated to remain stable at approximately 15%, reflecting its solid position in the domestic market.
As of 7 October 2024, Steppe Cement holds USD 11 million in cash and cash equivalents, which provides the company with financial stability as it heads into the final quarter of the year.
