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Steppe Cement (LSE:STCM) experienced a decline of over 16% following the announcement of reduced interim sales, resulting in a financial loss for the Kazakhstan-based cement producer. For the half-year period ending June 2024, the company reported revenues of $34.4 million, a decrease of 7% compared to the previous year. This decline culminated in a loss after tax of $3.5 million.
The company's gross margins fell significantly, decreasing to 15% from 26%. This shift can be attributed to rising costs associated with electricity and maintenance during the reporting period. Steppe Cement also noted a substantial drop in sales volume, which decreased by 18% in the first quarter. However, the second quarter saw a slight recovery, with a 2% increase in sales volume attributed to price adjustments aimed at aligning with market conditions.
In a more positive development, Steppe Cement reported that sales volume has continued to recover into the third quarter of 2024, accompanied by an increase in cement prices. This indicates a potential shift in market dynamics that may benefit the company moving forward.
The decline in share price, with a decrease of 2.5 pence to 13 pence, reflects market reactions to the company's interim performance and outlook. Stakeholders will be keenly observing Steppe Cement's ability to sustain the momentum in sales volume and manage costs effectively in the coming quarters, especially as the company navigates the challenges of the current economic landscape. The future performance will be pivotal in determining the company's trajectory within the cement industry.
