Indocement Reports Higher First Half Profits

By webadmin on 02:49 pm Aug 01, 2012
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Jakarta Globe

Indocement Tunggal Prakarsa, a cement maker, reported profit climbed 24 percent in the first half, boosted by higher sales of the building material.

Net income at Indocement rose to Rp 2.1 trillion ($223 million) in the January-June period from Rp 1.7 trillion in the same period a year earlier.

Meanwhile, revenue increased 30 percent to Rp 8.2 trillion, the company said in a brief prospectus published in Investor Daily on Tuesday.

Indocement follows the trend of its rivals such as state-controlled producer Semen Gresik. Semen Gresik reported a 12 percent increase in net income to Rp 2.1 trillion in the first half, while its revenue increased 14 percent to Rp 8.66 trillion the company said on Friday.

Cement sales are considered a leading economic indicator in Indonesia. The country’s economy, which expanded 6.3 percent in the first quarter this year, has been forecast by the government to grow more than 6 percent in the second quarter. Plans by consumers and corporations to build houses and other infrastructure have boosted demand for cement.

At Indocement, the cost of goods sold rose 33 percent to Rp 961.6 billion.

Indocement Tunggal Prakarsa, an Indonesian cement maker, has forecast between $150 million and $180 million in capital expenditures this year, Tju Lie Sukanto, the company’s finance director, said in March.

The company will use some of the money to build a new plant in Bogor. Indocement said last year that it planned to build a cement production factory in Pati, Central Java, at an estimated cost of $300 million.

Widodo Santoso, chairman of the Indonesia Cement Association, said two weeks ago that full-year cement sales by the country’s cement makers, including Indocement Tunggal Prakarsa, Holcim Indonesia and Bosowa group, would likely reach 54 million tons, up 12 percent from last years sales, boosted by strong first-half figures.

Several infrastructure projects have started under the government’s master plan for economic development, known as MP3EI, including roads, bridges and ports. Low borrowing costs have spurred such projects.

Lending rates at local banks have been cut, after the central bank kept its benchmark rate at 5.75 percent this month, the lowest since the interest rate was introduced in July 2005.

Indonesia is forecast to use 55 million tons of cement by 2015 and 100 million tons by 2020. In preparation for the rising demand, local cement companies aim to boost their combined production capacity to 80.39 million tons by 2015 compared to 56.82 million tons in 2011.

Indocement is 51 percent controlled by Birchwood Omnia Limited, 13.03 percent by Mekar Perkasa and the investing public 35.9 percent.

Shares of Indocement rose 6.7 percent to Rp 21,500 on the Indonesia Stock Exchange on Tuesday They have risen 42 percent in the past 12 months.