by Robert Yota
Publicly-listed state cement giant Semen Indonesia Group (SMGR) records a convincing performance to cap off the first quarter of 2020. The company successfully recorded growths in revenue and net profit. During the quarter, SMGR earned revenue of Rp 8.58 trillion, which is a 5.5% increase from Rp 8.12 trillion (YoY). Furthermore, the company’s net profit also enjoyed a drastic 66.5% growth (YoY) from Rp 268.10 billion to Rp 446.45 billion. The rise in revenue can be attributed to the noticeable growth in SMGR’s cement exports, which experienced a 23.2% increase into 1.02 million tons. As a whole (domestic and export), SMGR sold 9.37 million tonnes in 1Q, which is roughly a 7.04% increase from 8.75 million tonnes in last year’s first quarter.
Semen Indonesia Group president director Hendi Prio Santoso stated the performance improvements from his company were mainly driven by the synergy and efficiency initiatives SMGR has undertaken since 2018. “Semen Indonesia will continue to safeguard our profitability by conducting cost transformation initiatives and transacting with businesses in the building material industry that bring the most added-value for our company,” said Hendi in a recent press release.
According to Mandiri Sekuritas recent research, in April, SMGR market share started to pick up as infrastructure in Sumatra, and East Indonesia saw strong growth. Furthermore, its export volume in April increased by 35.5% YoY to 441 tonnes, as a business in China starting to resume, followed by Bangladesh's demand.
Meanwhile, SMGR subsidiary, Solusi Bangun Indonesia (SMCB), also performed well in this year’s first quarter, posting a 4.89% growth (YoY) in revenue of Rp 2.46 trillion and a net profit of Rp 68.43 billion, which is an improvement from last year’s Rp 123 billion net loss. According to Danareksa Sekuritas analyst Maria Renata, SMCB plays a pivotal role in boosting the revenue and net profit growths of Semen Indonesia Group since the start of the consolidation.
“From January-April 2020, Semen Indonesia Group has sold 12.43 million tonnes of cement, which is a 5.3% increase (YoY) backboned with the SMCB consolidation. The January-April sales are 31.2% of our full-year sales forecast volume of SMGR at 39.8 million tons, and we will maintain our previous estimation,” stated Maria in a report.