SMGR profit-growth slows to 15 percent

JAKARTA. PT Semen Indonesia (SMGR), the country’s largest cement manufacturer, reported double digit growth in its revenue and net profit in the first nine months of the year, boosted by higher sales volume in line with analysts’ forecasts.

According to its quarterly financial report, the state-owned company’s revenues jumped 27.2 percent to Rp 17.39 trillion (US$1.57 billion) as its sales volume increased 15.6 percent year on year to 18.5 million tons during the first nine months.

In September alone, it sold 2.41 million tons of cement, rising 12.8 percent year-on-year. As a group, Semen Indonesia currently has four subsidiaries, namely Semen Gresik in East Java, Semen Padang in West Sumatra, Semen Tonasa in South Sulawesi and Thang Long Cement, a Vietnamese cement manufacturer it acquired last year.

Semen Gresik remained the major contributor to the company’s total revenues, accounting for more than a half of its sales volume in the third quarter. More than 98 percent of Semen Indonesia’s sales were marketed domestically and the remainder exported by Semen Padang and Semen Tonasa.

Semen Indonesia investor relations head Agung Wiharto said the company was upbeat it would be able to hit its target of booking between 12 percent and 14 percent increase in its sales volume this year.

With the target, the publicly listed company is expected to sell between 25.26 million tons and 25.71 million tons of cement, up from 22.55 million tons recorded in 2012.

Data from the Indonesian Cement Association (ASI) shows that with the nine-month results, Semen Indonesia’s growth rate was higher than the industry average and it continued to dominate the domestic cement market with a market share of 43.8 percent. In the January-September period, total domestic consumption only climbed 5.3 percent to 41.58 million tons.

In terms of net profits, although Semen Indonesia posted increased costs and expenses, it was still able to gain higher net profits compared to the third quarter of 2012.

According to its financial report, the company’s costs of revenues surged 31.5 percent to Rp 9.55 trillion and selling expenses were up 31.3 percent to Rp 1.59 trillion.

Net profits rose by 15.2 percent to Rp 3.91 trillion despite higher costs during the nine month period. But, the growth rate of the profits slowed from 22.8 percent a year ago.

Bahana Securities analyst Teguh Hartanto attributed the slower growth rate in net profits to foreign exchange volatility and the subsidized fuel price increase.

“Some of Semen Indonesia’s costs are related to the US dollar, such as coal and packaging prices. At the same time, it suffered from higher transportation costs with the fuel price hike. All that had squeezed its net profits margin,” he said.

But, according to Teguh, the company’s performance was still in line with Bahana’s forecast as it predicted Semen Indonesia would reap at least Rp 5.38 trillion in net profits by year-end. “So far, it has attained more than 72 percent of the forecast,” he said.

On Tuesday, its shares ended at Rp 14,300 on the Indonesia Stock Exchange (IDX), unchanged from a day before. (The Jakarta Post)