Surya Toto sees flat earnings growth

JAKARTA (JP): PT Surya Toto Indonesia, a manufacturer of sanitary and metal-based fitting products listed on the Jakarta Stock Exchange, projects that a bearish property market will result in flat earnings growth for the company this year.

"The property sector may not grow as fast as last year because the central bank has urged banks to curb their lending to property companies. Therefore, we predict that our sales growth may not be as high as last year," the company's president, Mardjoeki Atmadiredja, said yesterday.

"On the export side, we will also face stiff competition due to an increase of supply from other developing countries," Mardjoeki added.

He said that the situation will become more difficult for the company in the coming years as more imported products, particularly fittings, will enter the domestic market because of trade liberalization.

"I think imports of sanitary products have accounted for 5 percent of the total supply on the domestic market, while imports of fitting products have gained a 30 percent share on the market," he noted.

He claimed that Surya Toto controlled a 60 percent share on the domestic market of sanitary products and 40 percent of fitting products last year.

Mardjoeki said that the company's total sales rose by 20 percent to Rp 127 billion (US$54 million) last year, of which Rp 87 billion was derived from domestic sales (which recorded an increase of 23 percent), while the remaining Rp 39 billion came from exports (14 percent).

He said the company's net profits increased slightly by only 2.5 percent to Rp 24 billion last year.

The company's shareholders, according Mardjoeki, approved the management's proposal to pay dividends of Rp 150 per share, totaling Rp 7.4 billion or 31 percent of its net profits. (alo)