Annual Financial Report.

26 June 2025

Steppe Cement Limited

("Steppe Cement" or the "Company")

Final Results for the Year Ended 31 December 2024

 Notice of Annual General Meeting

The Board of Steppe Cement (AIM: STCM) is pleased to announce the Company's final results for the year ended 31 December 2024, which are set out below.

Highlights:

- Resilient Operational Performance Amid Market Pressures
Steppe Cement maintained a 14.5% market share in a competitive domestic market, with cement consumption rising to 11.9 million tonnes (2023: 11.5 million tonnes) supported by infrastructure demand. Strategic and disciplined pricing helped defend volume despite intensified competition.

- Stable Revenue, Profit Impacted by Cost Inflation
Revenue increased to USD 84.9 million (+4% versus the prior year), but EBITDA fell to USD 7.5 million (2023: USD 12.4 million) due to rising input costs, especially electricity, and a one-off VAT charge. Net profit declined to USD 1 million (2023: USD 4.5 million), reflecting margin pressures and currency effects.

- Continued Production Strength and Cost Focus
Completion of the Line 6 upgrade lifted clinker output to 1.47 million tonnes, above budget. Despite a 42% rise in electricity tariffs, cement and clinker cash costs were maintained at USD 31 and USD 27/tonne respectively through operational efficiency.

The Company's forthcoming Annual General Meeting ("AGM") is expected to take place at its Malaysian Office at Suite 10.1, 10th Floor, West Wing, Rohas Perkasa, 8 Jalan Perak, Kuala Lumpur Malaysia on Friday, 25 July 2025 at 4:00 p.m. (UTC+8).

The full Annual Report and the formal Notice of AGM will shortly be made available on the Company's website at www.steppecement.com.

For further information, please contact:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.

CEO STATEMENT

2024 was a year of operational resilience and strategic focus for Steppe Cement as we navigated a complex and evolving market environment, both in Kazakhstan and globally.

Market and Economic Context

Kazakhstan's economy continued its recovery and modernization path in 2024, with official inflation decreasing to 8.6%, down from 9.8% the previous year. Population growth and government initiatives supported a steady demand for housing and infrastructure, contributing to an increase in cement consumption to 11.9 million tonnes (up from 11.5 million tonnes in 2023). The National Bank of Kazakhstan started 2024 with interest rates at 15.25%, then reduced them to 14.25% following which they were increased again to 15.25% at the end of the year while the TONIA (Interbank rate) also increased to 14.4% from 13% over the course of the year. Those rates have continued their climb in 2025 reaching 16.5% for the National Bank rate and 15.8% for the interbank rate in May 2025. The gap between official inflation and interest rates makes investment decisions for capital investment more challenging.

The domestic cement market showed heightened competition. Overall imports declined to 0.51 million tonnes in 2024 from 0.7 million tonnes in 2023, while exports were reduced to 0.9 million tonnes from 1.2 million tonnes. Cement imports from Uzbekistan entered the market for the first time in many years, applying pressure on southern regions. This trend is expected to continue as capacity in Uzbekistan has more than doubled in the last five years and the factories there are running at below 60% capacity. The consequent pricing pressure and reduction in export volumes from Kazakhstan are expected to continue in the more dynamic South Kazakhstan market (the biggest region for cement consumption in Kazakhstan), with implications for the broader Kazakh market.

Steppe Cement maintained a 14.5% share of the Kazakh market albeit at the expense of maintaining lower prices.

Operational and Financial Performance

Revenue increased to Kazakh Tenge (KZT) 39.8 billion (USD 84.9 million) in 2024, 7% higher in KZT terms compared to 2023 while gross profit was USD 23.4 million, a drop of USD 1.2 million. EBITDA fell from USD 12.4 million to USD 7.5 million as a consequence of inflation in costs, mostly electricity, that could not be passed onto clients in the form of higher selling prices, as well as a one off charge reflecting the reversal of VAT provision (USD 1.3 million). Net profit for the year was USD 1 million compared to 4.5 million in 2023.

The ex-factory selling price per tonne was maintained at USD 42 per tonne. In 2025 we expect a modest increase in prices in KZT, while the KZT may continue to devalue against the USD.

The balance sheet shows a foreign exchange translation loss of over USD 8.7 million. The translation reserve was mainly due to an unrealised forex loss on an intercompany loan of approximately USD 4 million and the translation (from KZT to USD) of the net assets of the Kazakh subsidiaries of approximately USD 4 million as a result of depreciation of the Tenge against the USD in 2024 versus 2023. Since inception the Company has accumulated a foreign translation reserve of USD 134 million as we hold a KZT denominated asset and the KZT has continued to devalue due to high inflation, from 130 KZT/USD in 2005, when we listed on the London Stock Exchange, to 510 KZT/USD in 2025.

This is the most important factor contributing to the decline in total equity to USD 57 million, compared to USD 70.7 million at end of 2023.

Nonetheless, we are in a net cash position at a group level and ended the year with over USD 6 million in cash, demonstrating our ability to sustain operations prudently.

Electricity remains cheap by international standards, but 2024 saw prices rise 42% year-on-year, driven by regulation and grid distribution tariffs. Clinker production cost per tonne was therefore 16% higher than 2023, though consumable, repair and maintenance costs were kept within budget. We maintained a cash cost per tonne of clinker at USD 27 and cement at USD 31. Real selling expenses were stable at USD8.2 per tonne. However, sales costs for deliveries by truck were reclassified (please see note 33 for a summary of reclassifications between 2023 and 2024) from selling expenses to other expenses, which correspondingly increased by USD 2 million. Administrative expenses of USD 8.6million included a one-off cancellation of USD 1.4 million in recoverable VAT. Excluding this charge, administrative expenses increased to USD 7.2 million from USD 7.1 million in 2023, in line with inflation and salary adjustments.

The increased production and higher reliability of Line 6 should allow us to decrease the costs in 2025.

Production and Investments

We completed the upgrade of the Line 6 pre-calciner, achieving clinker production of 1.471 million tonnes in 2024, exceeding budget. Operational reliability improved, despite some setbacks including refractory failure in May and kiln issues in November-December.

We ended 2024 with a stock of 140,000 tonnes of clinker, to support our 2025 sales target of 1.85 million tonnes. Capex was limited at USD 1.5 million, focused on automation, emissions systems, and reliability improvements. Increases in production levels and reliability in Line 6 remains key to our production strategy in the coming years.

The improved performance across both kilns during the first quarter will support higher production. We expect clinker production to increase by 90,000 tonnes, with improved reliability and lower heat consumption.

For the full year, we forecast clinker production of 1.55 million tonnes, above the 1.47 million tons in 2024. Cement production is expected to reach 1.85 million tonnes.

Cost efficiency has improved significantly in 2025, however, electricity costs continue to rise, now over 22% higher year-on-year due to centralised grid cost increases.

We anticipate a stable 2025, with limited capex (USD 2.5 million planned) focusing on reliability and emissions compliance. We have started to work on a multiyear strategic investment in Line 6 to increase the production to 2.2 million tonnes, if market conditions allow. In the meantime we continue to pursue growth cautiously, balancing margin preservation with market share. The cement market remains competitive and we expect moderate growth supported by domestic demand.

Our average headcount remained stable. Additional subcontracting of machinery will reduce our headcount in the future. We monitor and maintain competitive compensation across all categories to keep our key personnal.

There is an ongoing tax dispute involving our subsidiary KarCement (as referenced in note 32). The claim relates to asset classifications, intercompany transactions, and tax requalifications. We consider that we have a strong case and grounds to have this claim rejected by the courts (we have won the hearings so far) and therefore we have not taken a provision. We expect the case to be resolved in the summer 2025.

We managed to return USD 8.4 million to the shareholders in the form of capital reduction. Half of that amount was related to income derived from 2023 that was paid early in 2024, while the balance was paid at the end of the year. We intend to continue this way of returning capital to the shareholders while we simplify the structure of the ownership of the operating companies.

Sincerely,

Javier del Ser Pérez
Chief Executive Officer

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF COMPREHENSIVE INCOME (cont'd)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF FINANCIAL POSITION (cont'd)

AS AT 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CASH FLOWS (cont'd)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CASH FLOWS (cont'd)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 (cont'd)

(i)      Cash outflow for leases as a lessee are as follows:

(ii)      Reconciliation of movements of liabilities to cash flows arising from financing activities:

STEPPE CEMENT LTD

(Incorporated in Labuan, Malaysia)

STATEMENTS OF CASH FLOWS (cont'd)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

(ii)      Reconciliation of movements of liabilities to cash flows arising from financing activities: (cont'd)