PT Holcim Indonesia Tbk - PT Holcim Indonesia Tbk First Half Results 2007 : Strong improvement of operating results

As national cement sales rose during the first half of the year by 7.6% to 15.6 million tons, Holcim Indonesia recorded a significant improvement in its interim financial performance. The company’s sales revenue grew 17% to Rp 1,608 billion driven by a volume increase to 3.2 million tonnes of cement and clinker, together with delivery of 464,000 cubic metres of ready mixed concrete. Over this period Holcim Indonesia has recovered its share in the Java market driven by increased brand presence and improved distribution, while exports remained steady at 1.1 million tonnes.

Average selling prices for cement, which had been in decline through the previous year from a level of about Rp 600,000 to Rp 500,000 per tonne, recovered significantly during the first half of 2007, while export prices over the same period have also improved by more than US$2 per tonne. In ready mixed concrete, intense competition has put prices under pressure, however prospects have continued to improve with a significant increase in large scale commercial projects and a limited resumption of spending on infrastructure projects, including power stations and highways.

Taking account of one-off charges and exchange translation costs, net profit totalled Rp 5.7 billion at the half year. The company’s operating performance was a considerable improvement. Despite increased electricity and fuel prices, manufacturing and distribution costs were well controlled. Operating income of Rp 124 billion was recorded at the half year, compared to a loss of Rp 35 billion in 2006. Depreciation of the Rupiah during the course of 2007 resulted in a net exchange translation loss of Rp 30 billion, relating to the company’s US Dollar denominated debt. In addition, a one-off charge of Rp 60 billion was made in respect of costs relating to a voluntary separation scheme.

President Director Tim Mackay commented, “We are pleased with the operating performance for the first six months, a period in which we have benefited from efforts put into building brand visibility and market presence. The bottom line result reflects one-off costs involved in streamlining our operations, primarily the restructuring of a non-core transportation business. This enables us to focus on our integrated range of building materials products including cement, concrete and aggregates.”

He continued, ‘Looking forward, we believe our control over costs, available production capacity, retail presence and added value services, positions us well to make further encouraging progress in the second half.”