Profit of cement producers drops
Profit of cement producers drops
The Jakarta Post
Jakarta
The country's second-largest cement producer, PT Indocement
Tunggal Prakarsa, and the third-largest, PT Semen Cibinong,
recorded a decline in their first-semester net profit on
unexpectedly low demand for cement in the home market.
Cement sector analyst Deni Lesmana from PT Samuel Sekuritas
said on Thursday that domestic demand for cement in the first
semester was way below prediction as it had grown by only 0.4
percent to 12.6 million tons, compared with an earlier growth
estimate of 5 percent to 10 percent.
"The cement sector is still suffering from low demand and also
from the high cost of sales," said Deni, adding that the jump in
sales of the two companies was mostly caused by an increase in
cement prices rather than an increase in volume.
He explained that the weak growth was mainly attributable to
slow progress in government projects and the property sector.
Deni also added that the two companies were hurt by lower
foreign exchange gains and, as with most other manufacturing
companies, operational expenses had increased after the
government raised electricity and fuel prices.
Indocement said that foreign exchange gains in the first half
declined to Rp 461 billion (US$56.22 million) from Rp 1.04
trillion in the same period last year, while Semen Cibinong
earned Rp 317 billion from Rp 880 billion.
Indocement said that its first-half net profit declined by 26
percent to Rp 650 billion from Rp 878 billion, although sales
rose to Rp 1.96 trillion from Rp 1.82 trillion.
However, Deni said that the company's revenue cost of sales
jumped to Rp 1.29 trillion from Rp 1.28 trillion and also the
increase in its operating costs to Rp 272 billion from Rp 163
billion.
Meanwhile, Semen Cibinong's net profit plunged by 60 percent
to Rp 312 billion from Rp 787 billion.
Semen Cibinong's sales increased to Rp 1.1 trillion from Rp
921 billion, but cost of sales rose to Rp 998 billion from Rp 929
billion, and operating expenses jumped to Rp 121 billion from Rp
72 billion.
Indocement and Semen Cibinong both control almost half of the
cement sales in Indonesia, while the remainder is controlled by
state-owned PT Semen Gresik.