Semen 1Q profit hit by lower prices

Indonesia's biggest cement producer, PT Semen Indonesia Tbk, posted a 8.5 per cent drop in first-quarter net profit from a year earlier on the back of lower selling prices and weaker domestic demand.

The state-owned company reported net profit of IDR1.19trn (US$91.82m) for the three months ended March, down from IDR1.30trn for the corresponding period a year earlier.

“The company’s performance for the first quarter was affected by the decrease in selling prices in mid January, and weakening of domestic cement demand by 3.2 per cent. In addition, the increase in expenses also affected our performance for the last three months,” Agung Wiharto, Corporate Secretary of Semen Indonesia told Indonesia Finance Today.

Sales volumes declined by 1.8 per cent to 6.04Mt s from 6.16Mt in the same period last year. Revenue rose by just 2.6 per cent to IDR6.34trn from IDR1.17trn in the same period in 2014.

The government earlier this year instructed state-owned cement enterprises to reduce the price of cement by IDR3000/bag. However, first quarter domestic consumption has proved disappointing on the back of a weakening economy, heavy rainful and government development projects which have yet to get off the ground.