Semen Padang complete 2004 reports, profit increases

The Jakarta Post, Jakarta

Cement producer PT Semen Padang has completed its 2004 audited financial statement, paving the way for its parent company, publicly listed PT Semen Gresik, to issue the latter's consolidated account soon.

Semen Padang's chief financial officer, Endang Irzal said that although the West Sumatra-based company missed its March end deadline by a few weeks, it was a vast improvement from the 2002 and 2003 statements that took until last October to be completed.

"Semen Gresik should be able to complete its consolidated financial statements in a few weeks," said Irzal, whose firm in 2003, accounted for roughly 25 percent of its parent company's Rp 6.5 billion assets.

The report showed that Semen Padang booked sales of Rp 1.78 trillion (US$ 187 million), a 12.6 percent increase from 2003, resulting in a net profit of Rp 76.9 billion, more than tripling last year's Rp 25.2 billion.

Turning to this year, Irzal said the company targeted Rp 2.2 trillion in sales, which should result in a net profit of between Rp 90 billion and Rp 100 billion.

However, he emphasized that this year's target could only be met if the company received approval for the restructuring of its short-term loans worth Rp 450 billion.

Semen Padang would also spend Rp 135 billion on capital expenditure this year, partially to upgrade its plant, so that it could produce at its full design capacity of 5.3 million tons per year.

Semen Padang produced an average of 5 million tons of cement per year from 2000 to 2002, but only produced roughly 4.6 million tons annually in 2003 and 2004 due to poor maintenance of its plant and mine, stemming from an internal management conflict.

Semen Gresik, Semen Padang's parent company, as a group has the capacity to produce nearly 16 million tons a year, one third of the country's cement producing capability.

"The repair of the plant equipment is almost complete," said Irzal, who joined the company's new management team in late 2003.

He also said that the company was fully cooperating in respect to the ongoing special audit on the company's 2002 and 2003 performance, as mandated by Semen Gresik's shareholders in June last year.

He said the reason for conducting the special audit was fully understandable as the old management had not presented routine reports to Semen Gresik for nearly two years, in contrast with the current management's practice of reporting each month.

The internal management conflict, which came to an end in September 2003, originated from the government's decision to divest part of their holdings in Semen Gresik to Mexico-based Cemex in 1998.

Cemex owns 25.53 percent of Semen Gresik, while the Indonesian government and the public own 51.01 percent and 23.46 respectively. (002)