PT Indocement expects high growth in 1997

JAKARTA (JP): Publicly listed PT Indocement Tunggal Prakarsa of the Salim Group expects further revenue growth this year.

It is expected that cement operations and increased sales of its subsidiary, Indofood, will generate the increased revenue.

Indocement's president, Sudwikatmono, said the previous increase in net revenue was due to higher sales of both Indofood products and cement.

"The sustainable growth over periods accounted for the steady sales performance, with net revenue rising by 8.4 percent to Rp 4.27 trillion (US$1.73 billion)," Sudwikatmono said.

The increases were particularly due to the success of the company's 10th cement plant. The plant, opened in December 1996, has the capacity to produce 1.3 million tons of cement annually.

The company also expected that success in Indofood's proposal to acquire equity in six Salim Group companies would contribute a 45 percent net profit growth.

Last year Indofood proposed to acquire 80 percent equity in six companies of the Salim Group operating in edible oils and fat, oil palm plantations and consumer product distribution.

Indofood management plans to issue rights shares to finance the acquisition, which will boost its earning per share to exceed 20 percent.

"We'll continue to aim for better growth, performance and profit in the future," Sudwikatmono said.

The firm reported yesterday that its net income in 1996 increased by 15.9 percent to Rp 551.5 billion. The firm's earning per share stood at Rp 228 by the end of last year, a 15.7 rise from Rp 197 of the same period in 1995.

Its net revenue from cement rose to Rp 1.46 trillion last year from 1.42 trillion in 1995. The net revenue of Indofood also rose by 11.9 to Rp 2.82 trillion last year.

Cement accounted for 34.4 percent of Indocement's net revenue and 51.9 percent of its income last year, an improvement from 36.2 percent and 58 percent respectively of the same period in 1995, the company said.

Indofood accounted for 66.2 percent of the firm's net revenue and 45.9 percent of its operating income last year, compared with 64.1 percent and 41.2 percent respectively in the same period in 1995.

Indocement's gross profit margin also increased to 37.8 percent from 36.5 percent last year, and its operating profit margin grew to 26.6 percent from 26.1 percent.

Its net profit margin increased to 12.9 percent, which resulted from an increase in operating profit by 10.4 percent and a decrease in financing costs by 4.1 percent, the company said.

Sudwikatmono said his company planned to build its 11th plant which would be expected to increase cement production capacity to 15.8 million tons a year by 1999. (02)