Gresik President: expects 2009 net to grow by more than 10%

Gresik President: expects 2009 net to grow by more than 10%
Published: 28 January 2009

PT Semen Gresik maintains a target for net profit to grow by more than 10% in 2009 due to a slight increase in sales and lower cost of operations despite weakening demand as a result of the global economic crisis, the company’s top executive said Tuesday.

"We will strive to maintain our bottom line for 2009 to grow by at least a double digit," Semen Gresik President Director Dwi Soetjipto told Dow Jones Newswires in an interview.

He said the company will launch some cost reduction programs and efficiency measures and maintain healthy revenue which he expects to grow by at least 5% in 2009. He didn’t offer details for the cost reduction programs that his company will do for 2009 but said that lower fuel prices could help reduce the company’s cost of operations.

To maintain steady growth over the coming years Semen Gresik also plans to make new investment during the crisis.

"2009 will be a challenging year which requires us to be more prudent, creative and disciplined," Soetjipto said.

For 2008, he believes that the company’s net profit would beat analysts estimates which average IDR2.1 trillion ($185 million), compared with the IDR1.77 trillion Semen Gresik earned in 2007.

As of September 30, Semen Gresik’s net profit was up 41% to IDR1.77 trillion compared with the January-to-September period a year earlier, partly due to strong revenue which was up 24% to IDR9.79 trillion over the same period.

Soetjipto said that Semen Gresik will take advantage of the market downside to expand its business by buying stakes in cement plants in the Asian region.

"At a time when people are hesitant to make new investment, Semen Gresik is mulling to acquire stakes in cement plants that would be able to give an added value to our customers," he said. He said that the company has asked independent advisers to study the possibility. He didn’t explain how the company would finance the acquisition but said that given its low debt-to-equity ratio - which stood at 0.3 as of Sept. 30 - it could seek bank loans.

"The best time to invest is in the crisis time," Soetjipto said. He said the company should be able to benefit from the new investment when the global economy recovers.