Semen Cibinong's losses widen on currency woes

The Jakarta Post, Jakarta

Publicly listed PT Semen Cibinong, the country's third largest cement producer, posted a loss in the first nine months of this year due to the sharp depreciation of the rupiah against the U.S. dollar over the past three months.

In its statement to the Jakarta Stock Exchange on Tuesday, the firm said it recorded a net loss of Rp 435.5 billion (US$43.5 million) between January and September, widening by 14.8 percent from Rp 379.2 billion in losses over the same period last year.

According to the company, the major factor contributing to the losses was the weakened rupiah, which had resulted in higher costs to service its outstanding foreign-denominated debts.

Since the start of the year, the rupiah has lost about 9 percent of its value against the dollar.

Semen Cibinong, which is 77.3-percent owned by Switzerland- based cement giant Holcim Ltd., had to convert its revenues derived in local currency to service its foreign debts.

As of September, the company had liabilities amounting to Rp 5.68 trillion.

The net losses, however, have come at a time when the company recorded stronger sales numbers. In the first nine months of this year, sales rose by 29.4 percent to Rp 2.27 trillion from Rp 1.75 trillion last year.

The higher sales was attributed to higher cement prices, which increased by an average of 13.6 percent, and higher sales volume, which rose by 9.9 percent on robust growth in the construction sector.

With the higher sales numbers, the company managed to improve its market share to 15.9 percent from 14.7 percent.

The company's gross profit nearly doubled to Rp 291.7 billion from Rp 143.6 billion.

Semen Cibinong's bigger rivals, state-owned PT Semen Gresik and PT Indocement Tunggal Prakarsa (controlled by Germany's HeidelbergCement AG), also recorded higher sales during the period on strong demand from the construction sector.