Cement giants report concrete results

Andi Haswidi, The Jakarta Post - 2007-04-03 14:44

Jakarta, 03-April-2007 (The Jakarta Post) - The country's largest cement manufacturer, PT Semen Gresik, has reported hefty growth in net profit and sales for last year, despite lower overall demand.

The publicly listed company said Monday that it had booked a total net profit of Rp 1.3 trillion (about US$140 million) in 2006, about 29.3 percent higher than in the same period of 2005, when the equivalent figure was Rp 1 trillion.

The significantly higher net profit was attributable largely to an increase in net sales from Rp 7.53 trillion in 2005 to Rp 8.73 trillion last year, and to an increase in operational income from Rp 1.54 trillion to Rp 1.78 trillion.

The company's earnings per share jumped by 29.3 percent to Rp 2,184.13, compared with Rp 1,688.9 in 2005.

Cholil Hasan, finance director, said that despite last year's slower growth in domestic demand -- about 1.8 percent compared with 4.3 percent in 2005 -- Semen Gresik managed to boost its sales through effective marketing, as shown by 4.8 percent growth in domestic sales alone.

In 2006, domestic demand for cement reached 32.06 million tons, of which Semen Gresik supplied about 14.96 tons. The company successfully increased its domestic market share to 46.9 percent from 45.4 percent in 2005

Including exports, the company recorded total sales of 16.76 million tons, an increase of 2.6 percent from the 16.34 million tons sold in 2005.

Of the company's overall 2006 sales, 46.9 percent was accounted for by the company's own-brand sales, while subsidiary PT Semen Padang accounted for 33.2 percent and subsidiary PT Semen Tonasa the remaining 19.9 percent.

"The improved performance in 2006 was due to better synergies between all our subsidiaries, and our internal consolidation program," president director Dwi Soetjipto said.

After last year's robust performance, Semen Gresik is targeting an increase in total sales this year of 17.2 million tons on the back of an expected 4.6 percent increase in demand for cement, Dwi said.

Another cement giant, PT Holcim Indonesia, also reported its 2006 results Monday, which showed that the company earned total sales revenue of Rp 3 trillion last year, around the same as it booked in 2005.

"Sales for the period were virtually unchanged year on year at Rp 3 trillion. However, our net income of Rp 176 billion, or Rp 23 per share, represented a distinct improvement," Holcim president director Tim Mackay said in a press release.

The company made a loss of Rp 334.08 billion in 2005.

Mackay said that domestic demand, especially in Java, had contracted by 2 percent in 2006, in contrast to the 4.3 percent growth seen in 2005, despite the additional demand for cement for rebuilding work after the Aceh tsunami, and a spate of earthquakes and floods in different parts of the country.

Holcim currently controls around 16 percent of the domestic cement market.