Steppe Cement Reports 19% Revenue Growth and Narrows Loss in H1 2025

Steppe Cement H1 2025: Revenue Up 19% and Loss Sharply Narrowed

Steppe Cement’s unaudited H1 2025 numbers show a business riding a stronger home market while keeping a tight grip on costs. Revenue rose to USD40.9 million, up 19% year on year, with sales volumes up 18% to 850,424 tonnes. The company still posted a small loss, but it shrank to USD0.5 million from USD3.5 million in H1 2024 as margins improved and selling costs fell.

Management says volumes have been stable into Q3 2025 and prices have ticked up, which is typical for the summer high season. The headline: momentum is better, though inflation and electricity tariffs remain a headwind.

Headline Numbers Investors Should Know

Metric	H1 2025	H1 2024	Change
Revenue (USD)	USD40.9 million	USD34.4 million	+19%
Sales volume	850,424 tonnes	719,294 tonnes	+18%
Average cement price	USD48/tonne (KZT24,361)	USD48/tonne	Flat in USD
Gross margin	21%	15%	+6 ppts
Net (loss)/profit	USD-0.5 million	USD-3.5 million	Improved
EPS	-0.2 cents	-1.6 cents	Improved
Cash	USD7.3 million	USD6.1 million (FY24)	+USD1.2 million vs FY24
Borrowings	USD4.8 million	USD5.2 million (FY24)	-USD0.4 million vs FY24
Finance costs	USD0.6 million	USD0.6 million	Flat
Average USD/KZT	507	449	KZT -13%

Why revenue grew but USD prices stayed flat

Average realised prices were unchanged at USD48 per tonne, but in Tenge they rose to KZT24,656 per tonne from KZT21,458. That tells you two things: domestic pricing moved up, and the weaker KZT (-13% year on year on average) capped the USD translation. The volume gain did the heavy lifting for revenue growth alongside better local pricing.

Gross margin stepped up to 21% from 15%, helped by higher utilisation and price in KZT, even as electricity costs continued to run ahead of inflation. Selling expenses dropped 13% to USD5.4 million as Steppe focused on nearer markets to the plant, while admin costs nudged up 6% to USD3.6 million.

Kazakhstan cement market tailwinds – and new competition

The Kazakh cement market expanded 19% in H1 2025, driven by good weather, general economic growth, infrastructure spend, population trends and subsidised mortgage lending. Growth skewed towards South Kazakhstan. Management expects a slower H2, which is sensible given the step-up in H1.

Imports took a larger slice at 7.7% of the local market, about 1.5 times higher than last year. New capacity in Uzbekistan has pushed prices down there, reducing Kazakhstan’s exports to Uzbekistan (0.4 million tonnes vs 0.45 million) and boosting Uzbek imports into southern Kazakhstan. That is a competitive pressure to watch, particularly on pricing in the south.

For 2025, Steppe aims to hold market share at roughly 14% with full-year volumes of 1.8 to 1.85 million tonnes.

Operations and capex: incremental improvements add up

• Cash production costs were flat in KZT terms despite higher electricity, diesel and consumables, thanks to higher output. Management warns of further electricity tariff increases in H2 2025.
• Clinker production rose 4% in H1 and continued to increase into Q3. The full-year clinker growth target is 8%.
• Capex focused on environmental compliance, notably installing filters. A new dynamic separator for raw mill 3 has been commissioned.
• The company is exploring options to lift clinker output on Line 6 and optimise assets further.

This is classic cement-plant blocking and tackling: incremental debottlenecking to squeeze more clinker (the key input) out of existing lines while maintaining compliance. In a rising market, those tonnes matter.

Costs, currency and inflation: the trade-offs

Kazakhstan’s inflation ran at 11.8% in H1 2025, up from 8.4% last year, driven by utilities, food and imported goods after a 13% KZT depreciation. The central bank hiked the KZT refinancing rate to 16.5% in March to cool things down. Against that backdrop, Steppe’s ability to keep cash production costs flat in KZT is a quiet positive, though electricity is still biting.

The currency effect shows up clearly: turnover rose 34% in KZT to KZT20,717 million, but only 19% in USD. If KZT remains soft, USD-reported revenue and margins will translate lower even if the domestic business is doing well. The flip side is that some costs are local, so higher KZT prices help defend margin in-country.

Balance sheet and liquidity: modest debt, net cash position

At 30 June 2025, cash was USD7.3 million and borrowings were USD4.8 million, implying net cash of roughly USD2.5 million. Finance costs were USD0.6 million, including USD0.5 million of interest, mostly from subsidised loans. Inventories of clinker and cement were valued at USD7.3 million, giving further working capital flexibility for the high season. The group also has USD3.8 million of undrawn working capital facilities with Halyk Bank.

In short, leverage is low and liquidity is decent for a cyclical business heading into its busy months.

Outlook and what to watch into H2 2025

• Seasonality: Management says Q3 volumes are stable and prices have “slightly increased” as usual for the high season. That should support H2 cash generation if energy costs behave.
• Energy inflation: The company expects further electricity tariff increases and general inflation in H2. This is the biggest swing factor for margins.
• Imports from Uzbekistan: Rising import share to 7.7% could cap pricing in the south. Watch for any commentary on regional mix and discounting.
• Operational gains: The recently commissioned dynamic separator and potential Line 6 optimisation could add incremental tonnes and efficiency.
• Market share and volume: The 14% market share and 1.8–1.85 million tonne volume guidance are the key delivery metrics for FY 2025.

My take: a cleaner P&L with manageable risks

H1 shows solid commercial execution: more tonnes, better gross margins, lower selling costs and a much smaller loss. The move to sell closer to the plant is sensible in a high-energy-cost world. The balance sheet is in reasonable shape, and net cash of about USD2.5 million gives breathing room.

The risks are familiar: electricity tariffs, general inflation and a softer KZT could pinch USD-reported results, while Uzbek imports challenge pricing in the south. Even so, with the market up 19% in H1 and Q3 seasonality onside, Steppe has a fair breeze behind it.

Key positives and negatives at a glance

• Positives: Revenue +19%; gross margin 21% vs 15%; loss cut to USD0.5 million; selling expenses -13%; low borrowings and undrawn facilities; operational tweaks underway.
• Negatives: Rising electricity costs; elevated inflation (11.8%); KZT depreciation (-13%) dilutes USD translation; import pressure in South Kazakhstan; admin costs +6%.

Where to read the full numbers

The full interim financial statements are available on the company’s website: www.steppecement.com.