Semen Gresik profit margin to reach 30%

Semen Gresik profit margin to reach 30%
Published: 26 November 2007

PT Semen Gresik Tbk has projected that its EBITDA margin could reach 30% this year.  
 
The Vice President Director of Semen Gresik Rudiantara said through revamping program the company will increase its production capacity from 17.1Mt at present to 17.6Mt.  
 
"The revamping will cost US$40/t," he said last week.  
 
He said the company will have free cash flow of US$60m - US$70m this year, while it has maintained the market share of 45%.  
 
He said to support the profit the company has planned to arrange the sales area of its units to prevent price war among the units.  
 
Semen Gresik’s third quarter net profit has grown by 54.85% to IDR572bn from IDR370bn on the second quarter.  
 
But he declined to comment when asked about the plan of  Semen Padang, its unit, to develop new cement facility in Indarung to produce 2.5Mt. 
 
The share price of  Semen Gresik closed at IDR5,900 last week, unchanged from IDR5,900, unchanged from that on the previous day.  
 
The company has been considering issuing convertible bonds next year to support its expansion plan of the company has issued US$500 million bonds in January next year. 
 
Bank Mandiri also has just increased its lending plafond to  Semen Gresik from IDR1.5 trillion to IDR2.5 trillion-IDR3 trillion.  
 
The cement producer needs additional capital of US$200m from the initial target of US$1.3m to develop two power plants.