Semen Gresik expects earnings to rise 15 per cent

Semen Gresik expects earnings to rise 15 per cent
Published: 18 September 2008

PT Semen Gresik estimates its income by the end of this year will reach Rp11trn (US$1.2bn) or up by 15 per cent from around Rp9.5trn last year, the company’s chief said.

"In the second semester of this year, demand has been low but it is expected to rise again in September and remain high until year end," the company’s president director, Dwi Sutjipto, said.

Accordingly, the company hoped its net profit this year would at least be the same as last year, he said.

Dwi said the company’s financial performance depended much on demand and cement price movements in the market, referring as an example to the situation in August when national demand dropped around two per cent compared to the same period last year.

"However, this is not a problem because the target of the first semester has already been surpassed," he said.

Dwi said the company’s rising income until the end of this year would probably be the result of an increase in demand from 34Mt in 2007 to 37Mt.

It was even predicted cement consumption would increase 10 to 11 per cent until the end of this year, he said.

"The drop in August could be taken as a base for calculating demand until the end of the year," he said.

In connection with the company’s plan to build a new factory in Pati, Central Java, Dwi said that it would be realized soon.

"It cannot as yet be carried out because we have yet to receive the environmental impact analysis report from the government agency concerned," he said.

The report is an important requirement which has to be met by the company before starting the development and acquiring land.

Regarding funding, he said it was not a problem because the company had already set aside US$1.6bn for the construction of two new plants.