Final Results

Steppe Cement Limited
08 May 2007


                                Steppe Cement Ltd
                                   8 May 2007

                      Annual results, update on operations
                  and progress with cement plant refurbishment



Results


Steppe Cement is pleased to announce its preliminary annual results for the year
ended 31 December 2006:

                          
                                                                         Year
                                                                        ended
                                                                      31-Dec-06
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Sales (tonnes)                                                         740,322
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Consolidated turnover (US$'000)                                         55,625
--------------------------------------------------------------------------------
Consolidated profit before tax (US$'000)                                21,483
--------------------------------------------------------------------------------
Consolidated Profit after tax (US$'000)                                 14,375
--------------------------------------------------------------------------------
Shareholders' funds (US$'000)                                           69,185
--------------------------------------------------------------------------------

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Exchange rate (Tenge to the US$)                                         126.0
--------------------------------------------------------------------------------
Turnover CAC (Tenge '000)                                            7,007,037
--------------------------------------------------------------------------------
Profit after tax CAC (Tenge '000)                                    1,942,672
--------------------------------------------------------------------------------


2006 saw sales volumes increase by 4% and selling prices by 11% in Tenge over
the previous year. Gross profit grew 11% for the operating company, CAC (Central
Asia Cement JSC).


During 2006 the Company completed the refurbishment of three of the four wet
kilns and, despite the prolonged shutdowns, production for the year was 740,000
tonnes of cement, representing a 4% increase over the previous year. The
remaining wet kiln was refurbished during February and March of 2007, and with
all wet lines now fully operational, the total capacity of the Company's wet
lines is expected to be approximately 670,000 tonnes of clinker (for 860,000
tonnes of cement per annum). Total clinker production from the wet lines during
2006 was 602,000 tonnes.


The consolidated profit after tax reduced from the US$16.7 million achieved
during 2005 to US$14.4 million. The 2005 consolidated result included a positive
restructuring adjustment of US$12.4 m and the 2006 result includes the impact of
foreign exchange losses of US$0.4 million incurred on holding of foreign
currency and a charge of US$0.24 million for a number of costs associated with
the refurbishment of the dry lines which were not capitalized as plant and
equipment.


As required by IFRS, the Group revalued its plant during the year by US$12.6
million and this resulted in an increase to the depreciation charge of US $1.4
million. The revaluation surplus was taken directly to the revaluation reserve
account.

Dry Line Refurbishment


Steppe Cement has expanded the scope of refurbishment work of the two dry lines
at its Karaganda cement plant as follows:

   • Line 5 and 6 - raw materials, cement milling, dispatching areas,
    compressors, boilers and quarry equipment that were not included in the
    original scope
   • Line 6 - upgrade the filters to improve environmental standards together
    with the pre-heater, kiln, cooler and coal feed equipment


The contracts for additional work are expected to be signed by June 2007.


With the expanded scope of works, the capital cost of the dry line upgrades are
now expected to be US$81 million for line 5 and US$39 million for line 6 for a
total of US$120 million. The original estimates before the expansion to the
scope of works were US$73 million and US$20 million respectively with a total of
US$93 million.


The expected annual cement production following re-commissioning will be 1.4
million tonnes for line 5 and 1.0 million tonnes for line 6. Line 6 will however
have capacity to produce 1.3 million tonnes of cement per annum if demand
warrants this level of production.


Line 5 is expected to be re-commissioned during the summer 2008 and line 6
during the summer 2007.


Monthly picture updates of the refurbishment work are posted on the web site
www.cac.kz .

Financing


The additional scope of works is being financed by an increase in the EBRD loan
facility (originally signed in December 2005) from US$35 million to US$65
million and improved operational cash flows. The facility includes a local bank.


Kazakh bond issue


On 1 December 2006, the last tranche of the bond issue was disbursed. The total
amount raised was 2.7 billion Tenge (approximately US$21 million). All the
proceeds have been used in the refurbishment.


Market


The second half of 2006 confirmed a strong market with total Kazakh cement sales
exceeding 6.3 million tonnes for the year.


Personnel


Since December, Steppe Cement has welcomed an additional eleven expatriate
professionals for the re-commissioning of line 6, with a further ten expected to
be engaged by the end of July. 125 workers from the wet line operations have
been transferred to the dry line operations where they have commenced training.


Announcement of 2006 Results


Steppe Cement expects to release its 2006 annual report in its web site
www.steppecement.com in second week of May 2007.


The Company's Annual General Meeting will again take place in London at Hanson
Westhouse offices in One Angel Court, London EC2R 7HJ on 24 May 2007 at 2:30pm.






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