Indonesia’s Gresik passes profit target

Indonesia’s  Gresik passes profit target
19 January 2007

PT Semen Gresik Tbk has said that the company’s 2006 net profit increased by 30% from IDR1.02 trillion in 2005 to IDR1.32 trillion, compared with the target of IDR1.12 trillion. 
The President Director of Semen Gresik Dwi Sutjipto said the company’s revenue should have reached IDR8.1 trillion, compared with the target of IDR8 trillion. 
"The unaudited financial report of 2006 shows that the revenue has increased by 16% from IDR7.53 trillion in 2005, while the net profit has increased by 30%," he told Bisnis Indonesia yesterday. 
He said that the high net profit increase was due to the efficiency on production as well as on distribution so that the cost has declined by 10%. 
Efficiency of the holding company as well as of the subsidiaries has become the company’s priority amid the lower domestic cement consumption. 
Dwi said that the national cement consumption in 2006 has been 1% lower than the growth target of 8%, so that the company has postpone the development of new facility. 
"The capacity of Semen Gresik is enough to meet the need of cement nationally until the next two or three years so that we need not to develop new facility." 
He said that to anticipate the growth of cement consumption, the company has planned to increase the production rate of the facility by modifying the machineries. 
Dwi said that in the next three years the company has allocated US$45 million to increase the company’s capacity to by 1.5 million tons - 2 million tons. 
"We need US$30 to produce one ton of cement, so that to increase the capacity by 1.5 million tons we need an investment of US$45 million," he said. 
He said that the company will use internal cash reserve to meet such investment need. The capacity enhancement will be in the company’s facilities in Tuban, Padang and Tonasa. 
The report on research of Danareksa released in 2006 has predicted that the revenue of Semen Gresik will reach IDR8.26 trillion, an increase of 9.2% from IDR7.53 trillion on the previous year. The net profit would reach IDR1.26 trillion, an increase of 23.5% from IDR1.02 trillion in 2005. 
An analyst of Danareksa Chandra Pasaribu has targeted that the share price of Semen Gresik would reach IDR35,000 in 2006, with the price to earning ratio of 14.9:1. 
The research of PT Trimegah Securities Tbk, meanwhile, has predicted that Semen Gresik’s revenue will reach IDR9.05 trillion this year, compared with IDR8.29 trillion in 2006, and the net profit will be IDR1.46 trillion from IDR1.23 trillion.
Published under Cement News