Major players in Indonesia's cement industry have each posted solid growth in revenue in the first half of the year on the back of solid demand for the building material, but that has not translated into profitable results for all of them.
Holcim Indonesia, the nation s third-largest listed cement maker, said its net income fell 7 percent to Rp 467 billion between January and June this year, while revenue rose 7 percent to Rp 4.48 trillion.
Higher distribution, sales and administrative, and finance costs hurt earnings, Holcim said in a statement.
The company s interest expenses rose 25 percent, while distribution costs rose 15 percent and selling costs jumped 20 percent.
"Currently Holcim Indonesia is operating in conditions of a market oversupply," president director Eamon Ginley said in Thursday s statement.
"However, this condition is temporary in the face of steadily increasing demand over the medium to long term as Indonesia's economy continues to develop, while government and private sector investment in much-needed infrastructure and housing is pursued."
A subsidized fuel price rise in June prompted cement makers to adjust prices in line with higher transportation costs.
Faring better was Indocement Tunggal Prakarsa, the nation s second-largest listed cement maker, which said on Wednesday that its net income rose 12 percent to Rp 2.42 trillion in the first half of the year, while revenue grew 9 percent to Rp 8.92 trillion.
The company declined to provide any commentary to further explain its performance.
Another cement maker, Thailand's SSG, on Thursday said it had posted strong sales numbers in Indonesia.
Indonesian revenue rose 17 percent in the first half of the year to Rp 2.1 trillion, the company said in a statement, declining to release profit results for the unit.
SSG is consolidating the new ready-mix concrete business it recently acquired in Indonesia.
SCG is building its first cement plant in Indonesia, which will be operated by subsidiary unit Semen Java.
The plant, with a 1.8-million-metric-ton annual capacity, is scheduled to start operations by the third quarter of 2015. The company is also investing in lightweight concrete block production, aiming for an annual 6-million-square-meter capacity by 2014.
SCG president Kan Trakulhoon said in a statement that Southeast Asia would shrug off an economic slowdown in the second half of the year and remain an attractive investment destination.
Earlier this week, cement industry market leader Semen Indonesia said it had posted a 23 percent increase in first-half profit, to Rp 2.58 trillion, while revenue had risen 33 percent to Rp 11.4 trillion. The state-controlled company attributed the result to strong sales in Java.
In Jakarta trading on Thursday, shares in Indocement rose 2.2 percent to Rp 21,300, while shares of Holcim Indonesia traded unchanged at Rp 2,625.
