Steppe Cement FY Pretax profit US$53.6m Vs US$21.5m

Steppe Cement FY Pretax profit US$53.6m Vs US$21.5m
Published: 16 April 2008

Steppe Cement Wednesday reported a pretax profit of $53.6m for the year ended Dec. 31, 2007, compared to a profit of $21.5m a year earlier.
The company said it expects a decline of the construction sector market, an increase of local supply and a decrease in imports from Russia.
It added 2007 witnessed an increase in sales volume of 11%, whilst average Tenge selling prices rose by 60% and consolidated profit after tax increased by 158% compared to the previous year.
The company said the wet lines performed in line with expectations and that it intends to increase their output marginally in 2008 as a consequence of the implementation of a new chain system inside the kilns.
The company added it intends to refurbish cement mill 6 during 2008.
This will enable the company to utilise the wet lines as a completely independent unit from the dry lines, it said.
Steppe said it invested $62 million in the refurbishment of dry lines 5 and 6 in 2007 but delays were experienced with the project due to problems relating to the clearance of materials from customs during the summer as a consequence of Kazakh legislation that was subsequently amended in November 2007.
The company had custom cleared the main materials for line 6 by February, it said.
It added the cement plant was subject to a very cold winter that slowed the progress of work on site and some suppliers extended the delivery period agreed beforehand due to global material constraints.
Present expectations are that che Company will commence testing line 6 in June 2008 and continue with its commissioning during the summer, it said.
Line 5 is scheduled to be completed by the end of 2008.
All contracts for line 6 have been signed and the remaining contracts for line 5 are under tender, Steppe said.
Expenditure between lines 5 and 6 has been redistributed and the Company has increased the investment in the main electrical system, compressor, boiler, heating, cement mills and delivery area. Overall, the capital expenditure is now expected to total $78 million for line 5 and $51 m for line 6.
During the year, in addition to cash flow generated from operations, the company drew down $25 million from EBRD and $16 million from the KKB facility. The company said it is currently seeking to renegotiate this credit line with other banks.
It is intended to finance the balance of the project with the remaining $10 million from EBRD and internal cash flow.