Gresik fails to meet financial report deadline

The Jakarta Post, Jakarta

The country's largest cement maker, PT Semen Gresik, expects its consolidated 2002 financial report to be finalized by December, after missing an end-of-September deadline.

"I expect the full consolidated report will be completed by December," Gresik president Satriyo said on Monday.

The publicly listed company has faced difficulties in filing its report as its West Sumatra-based subsidiary PT Semen Padang declined to give its financial accounts. For months, a new management team for Padang could not enter the company due to a blockade by the old management team. It was only on Sept. 5 that the new management could finally enter the company.

Gresik was supposed to file the report by the end of August with the Jakarta Stock Exchange. But the company failed to meet this original deadline, forcing it to pay penalties to the exchange.

Satriyo also acknowledged that shareholders would not get dividends for the 2002 fiscal year due to the delay.

The previous managers of Padang, supported by local politicians and some employees, for over two years had rejected the government's plan to sell a majority 51 percent stake in Gresik and its two subsidiaries (Semen Padang and Semen Tonasa in South Sulawesi) to Mexico's Cemex SA de CV.

These people had demanded the central government spin off Semen Padang from Gresik.

Semen Padang's shares are 99.99 percent owned by Gresik, which is 51 percent owned by the government, 23.46 percent by the public and 25.53 percent by Cemex, which became Gresik's shareholders in 1998.

Gresik's combined output is 17.25 million metric tons per year. Semen Padang contributes an annual capacity of 5.5 million metric tons, compared to Tonasa's 3.48 million tons.

In the meeting, the company also reported a steep decline in its first semester unaudited consolidated net profit, as against the same period the year before, due to higher cost of sales.

Gresik's first half net profit fell to Rp 83.47 billion from Rp 170.38 billion a year earlier, as sales cost rose to Rp 1.74 trillion.

The 6.7 percent increase in sales cost outweighed the 3.5 percent rise in sales to Rp 2.49 trillion.

While foreign exchange gains also fell to Rp 7.58 billion from Rp 69.80 billion, all resulting in a decline in the gross profit to Rp 752 billion from Rp 775.5 billion.

In another part of the meeting, Satriyo also reiterated the company's plans to seek fresh funds to refinance its debts, which amount to Rp 1.2 trillion.

To do that, he went on, the company might issue commercial papers and seek more bank loans, whose interest rates of around 12 percent to 13 percent at the moment would be lower than the loans' rate of 16 percent to 18 percent it has been shouldering so far.

Gresik's debts are Rp 600 worth of bonds, and Rp 590 billion in bank loans.

As much as Rp 117 billion of the bonds, issued in 2001, is to mature in July 2004 and another Rp 493 billion in 2006, Satriyo said.