Indonesia: Semen Gresik revenue up 12%

Indonesia: Semen Gresik revenue up 12%
20 October 2011

State cement producer PT Semen Gresik Tbk. recorded a 10 to 12% increase in total revenue in the first nine months of this year compared to the same period last year, a top executive said on Wednesday.

Semen Gresik president director Dwi Soetjipto, before the company’s extraordinary shareholders general meeting, declined to give exact figure, saying it would be announced next week.

The firm recorded revenues of IDR10.29trn (US$1.16bn) in the first three quarters of 2010. A 10-12% increase in the same period this year will result in revenue between INR11.31trn and INR11.52trn.

 Dwi also said that Semen Gresik booked a 10% increase in domestic sales as of September 2011 compared to the same period last year. The company recorded sales of 14.37Mt in the 3Q10.

Semen Gresik, Dwi said, estimated a 5 to 10% increase in net profits. The firm recorded INR2.52trn of net profits in the same period last year leading to possible profits in the range of INR2.64trn to INR2.77trn in the first nine months of this year.

 Dwi admitted that surging production costs, particularly due to rising prices for coal and electricity, caused the slight increase in net profits.

To offset the decline in the narrowing profit margin, the company will operate its plants for longer periods at maximum capacity and use cheaper sources of power, he said. The company’s plants use coal to fuel its plants, and Semen Gresik has set aside INR1trn to purchase a coal mine.

“I think the production costs will increase about 5 to 10%. Meanwhile, we cannot increase cement prices. If we increase the price and our competitors maintain their current price, we will lose our market share, which is about 43%,” Dwi said. 

“We’re keeping the operation stable and at maximum capacity.

Moreover, we use alternative fuels to the maximum extent as possible.”

Published under Cement News