PT Holcim Indonesia Tbk Annual Results 2014

9 March 2015
 

• Sales revenues up 9% to Rp 10.5 trillion

• Net profit of Rp 669 billion or Rp 87 per share

• 2014 Total dividend proposed of Rp 65 per share

• New capacity: Tuban 1 on line in 2014, Tuban 2 on schedule for 2015

Jakarta, March 9th 2015.  PT Holcim Indonesia Tbk announced the 2014 financial results today, reporting sales revenue growth of 9% to Rp 10.5 trillion. Profit for the year was Rp 669 billion, or Rp 87 earnings per share.

 

Selected comparative highlights: Financial Results 2014 and 2013 (audited)

Rp billion (unless otherwise stated) 2014 2013
Sales Revenue  10,529  9,686
Gross Profit  3,026 3,355
Gross Profit Margin  28.7%  34.6%
Operating EBITDA  2,002  2,453
Income from Operations   1,292  1,849
Net Profit   669 952

 

Competitive environment

The economy continued to slow during 2014, impacted by lower commodity prices and a widening current account deficit. Tighter credit conditions and rising inflation contributed to weaken sentiment across the retail supply sector for construction materials. National election activity affected progress on infrastructure and large private sector projects.

Despite increased competition and a growing supply-demand imbalance, Holcim Indonesia retained market share at over 14% with sales revenue growth of 9% for the year. National cement sales grew by 3.3% to 59.9 million tons, according to the cement association (ASI).

 

Capacity and distribution improvements

Holcim Indonesia commissioned significant new production capacity of 1.7 million tons in 2014 at the new Tuban plant on Java, with a second 1.7 million tons kiln line on schedule for mid 2015. Improvements to cement mills in the company’s two other plants were also completed. The supply chain was extended, loading times were reduced by new palletizer equipment and greater use made of rail transport. Work on a new cement terminal commenced for South Sumatra.

 

Cost and margin pressure is transitory 

In commissioning the first kiln line at Tuban, unexpected technical delays resulted in additional freight costs to ensure supply commitments were met using the company’s existing plants. This plus higher electricity costs contributed to reduce margins.

Financial costs were 44% lower, year on year, and exposure to exchange rate volatility has been reduced with the repayment of foreign currency debt, while extending the maturity profile with Rupiah-based financing.

Net profits of Rp 669 billion or Rp 87 earnings per share, reflected the lower than expected sales and surplus supply across markets, plus upward cost pressure during this transition year, ahead of new economic stimulus and the full benefit of additional capacity.      

 

Change and opportunity

The transition to a new Government provides a more positive outlook, based on structural reform and new medium term economic plans, in the context of substantial change in energy prices. Fuel subsidies were reduced in November and a new national medium term plan has been put in place to stimulate growth. Parliament approved budget revisions leave the way open for an unprecedented boost for infrastructure spending in the year ahead, amounting to Rp 290 trillion (US$22.6 billion) almost double the commitment made for 2014, assuming such expenditures are realized. In an unexpected development, post reporting date, Government has announcement that state owned cement companies must reduce prices by Rp 3,000 per 50 kilogramme bag. In response, a price adjustment has ensued among leading private sector cement producers. It is hoped that the Government is able to realize the infrastructure programme mentioned above, so that increased volume can help mitigate the negative price impact. 

Holcim Indonesia is well positioned to capitalize on any new market opportunities. The second kiln line at Tuban is on schedule for completion in the first half of 2015. Inflation has eased and a recent cut in the central bank benchmark interest rate is feeding through to mortgage rates. A general easing of credit will support the SME construction sector, as the main source of demand, and lower fuel prices will contribute to cheaper transport costs.

 

Innovation

Over the past year, a number of products have differentiated Holcim Indonesia as innovator and leader in advanced construction materials as our market increases in sophistication. Holcim SpeedCreteTM, ThruCreteTM and OptimaCreteTM were all highly successful, in providing large-scale solutions in road repair and highway construction, in use for all weather airport taxiways, and in complex, but high strength structural projects, among other examples. A new range of mortar products was developed and successfully tested early in 2015. The Company’s large-scale industrial and mixed-use waste treatment facility was opened in the final quarter and has generated considerable interest from private sector enterprise and Government departments, as a secure, safe and sustainable waste management solution. A new automated sales management platform has been introduced to provide customers with unparalleled service levels in this market. 

 

Environmental and Social performance

Well-established community and environmental management programmes were continued in and around every operational site - from cement plants to concrete batching plants, from quarries to sales and distribution hubs. The Holcim Plant in Cilacap, achieved a fifth consecutive Gold in the Ministry of Environment and Forestry’s PROPER awards, a considerable achievement for being the first cement company to receive Gold title for five consecutive years.

In terms of health and safety, the company kept focus on refreshing and strengthening health and safety awareness among Holcim employees, communities, contractors and all strategic business partners. As a company operating worldwide, Holcim remains committed to achieving zero harm in every aspect of our business.

We also participated in key global programmes of the Holcim Group. Firstly, in line with the company’s commitment to promote sustainable construction, Holcim Indonesias acted as host for the Asia-Pacific round of the Holcim Awards, to recognize and encourage talent in the design of energy efficient, low impact and socially sustainable construction projects, as managed by the Holcim Foundation.  Secondly, in the rollout of the Holcim Sustainable Development Ambition 2030, by setting new targets for value creation, revenues and earnings directly emanating from sustainable construction, sustainable development and environmentally responsible sourcing. Thirdly, we invested in refreshing our approach to governance in respect of all commercial activities, fair trade practices and performance-based rewards, across the entire company.   

 

About  PT Holcim Indonesia Tbk 

PT Holcim Indonesia Tbk  (Holcim Indonesia) is a publicly listed company which its majority stake  (86.35%), is owned and managed by Swiss-based Holcim Group, one of the world’s largest cement companies with more than 85,000 employees and production capacity of more than 170 million tons of cement.

As one of the largest cement companies in Indonesia, PT Holcim Indonesia Tbk maintains integrated businesses of cement, ready-mix concrete, and aggregates production. The company operates three cement plants in Narogong-West Java,  Cilacap-Central Java, Tuban 1-East Java and a grinding facility in Ciwandan-Banten with total capacity of 11 million tons of cement and employs more than 2,500 employees. 

PT Holcim Indonesia Tbk operates a domestic building material supply network, which covers special distributors, retailers, masons, and Solusi Rumah outlets – the outlet provides housing design service, building materials, building consultation, and financing access. All under one roof.

 

Further information please contact:

Rusli Setiawan Diah Sasanawati (Anna)
Relationship Management Director Corporate Communications Manager
PT Holcim Indonesia Tbk PT Holcim Indonesia Tbk
Mobile: 0811 860375 Telepon: +62 21 29861000 ext 8361
  Mobile: 0813 81818554
e-mail: rusli.setiawan@holcim.com e-mail: diah.sasanawati@holcim.com
website: www.holcim.co.id website: www.holcim.co.id