Profile

Industry Sector Basic Industry and Chemicals
Industry Sub Sector Cement
Established 25 March 1953
Listed 8 July 1991
Listed Company Code SMGR
Listed Shares 5,931,520,000
Dividend Yes
Major Shareholders (>5%) Government of Indonesia (51.01%)
Key Subsidiaries Semen Gresik
Semen Padang
Semen Tonasa
Kawasan Industri Gresik
Industri Kemasan Semen Gresik
United Tractors Semen Gresik

Stock Quote Semen Indonesia - SMGR:

Business Summary

Although Semen Indonesia's core business is the production (and distribution) of cement, the company is also involved in:

Industrial real estate
Cement bags
Mining

The majority of the company's cement production stems from Semen Gresik (East Java), Semen Padang (West Sumatra) and Semen Tonasa (South Sulawesi).

The company's cement production, production capacity and sales volume have risen steadily in recent years - reaching record highs - due to robust domestic cement demand in combination with capital expenditure to build new plants. These numbers are predicted to increase further in the near future.

Semen Indonesia's Operational Highlights:

  2009 2010 2011 2012 2013 2014 2015 2016
Cement Production
in million tons
18.1 18.2 19.8 22.8 26.9 28.3 28.5 28.3
Production Capacity
in million tons
19.0 19.0 20.2 28.5 30.0 31.8 31.8 31.8
Domestic Sales
in million tons
18.4 17.9 19.7 21.8 25.4 26.2 26.1 25.8

Source: Semen Indonesia Annual Report 2016

An example of Semen Indonesia's intention to expand its business is the company's acquisition of a majority stake in Vietnam’s Thang Long Cement (worth USD $157 million) in December 2012. This move shows that the company is keen to look across borders to tap new markets and strengthen its production capacity. At mid-2013, Semen Indonesia is seeking to acquire a cement company in Myanmar.

Although Semen Gresik is clear market leader in Indonesia's cement industry, its market share has fallen a couple of percentage points in recent years because of increased production of competitors. To reverse this trend, the company has invested in the construction of two new cement plants in Rembang (Central Java) and Padang (West Sumatra), each with a production capacity of three million tons. The factory in Padang should become operational in late 2015, while the factory in Rembang is expected to start operations in late 2016. Moreover, the company is busy preparing the establishment of four new cement mills; two in Tuban (East Java) and two in Dumai (Riau, Sumatra).

Semen Indonesia's Financial Highlights:

     2010    2011    2012    2013    2014    2015    2016
Net Revenue 14,344.2 16,378.8 19,598.0 24,501.2 26,987.0 26,948.0 26,134.3
Gross Profit    7,486.9  9,297.6 10,944.1 11,578.9 10,646.0  9,855.9
Net Income  3,633.2  3,925.4  4,848.0  5,370.2  5,559.9  4,521.5  4,521.6
EBITDA  4,969.5  5,402.0  6,869.1  8,099.0  8,491.9  7,473.5  6,962.9
Total Assets 15,563.0 19,661.6 26,579.1 30,792.9 34,331.7 38,153.1 44,226.9
Total Liabilities  3,423.2  5,046.5  8,414.2  8,988.9  9,326.7 10,712.3 13,652.5
Earnings per
Share¹
    613     662     817     905     937     762
Dividend per
Share¹
  306.26   330.89   367.74   407.42   375.34

in billion IDR rupiah, except stated otherwise
¹ in IDR rupiah
Source: Semen Indonesia Annual Report 2016

Future Prospects of the Indonesian Cement Sector

Indonesia's cement sector has shown a steep increase in domestic cement production and consumption. This trend is estimated to continue for a number of reasons:

Indonesia's current low per capita cement consumption
The government's intention to ramp up much-needed infrastructure development
An expanding middle class that gives rise to to new housing and real estate development
Solid national economic conditions with annual GDP growth of plus 5 percent

What are issues that negatively affect the Indonesian cement sector?

Infrastructure development is not reaching its full potential due to red tape, a weak legal system, and a lack of public and private funds
International financial turmoil (USA and Europe) can influence Indonesia's economic growth, thus affecting domestic cement demand
Recent central bank monetary tightening led to a cooling property market

Semen Indonesia, Indocement Tunggal Prakarsa and Holcim Indonesia dominate Indonesia's cement sector. Click here for a detailed analysis of Indonesia's cement industry and market.

Future Forecast Semen Indonesia's Financial Highlights:

     2014    2015   2016F   2017F   2018F
Revenues 26,987.0 26,948.0 25,239.0 27,279.0 29,370.0
Net Income  5,559.9  4,521.5  4,079.0  4,240.0  5,244.0
Operational Profit
 7,142.0  5,946.0  5,367.0  5,391.0  6,750.0
P/E Ratio (x)
    9.3    11.4    12.6    12.2     9.8
P/BV (x)     2.1     2.0     1.8     1.7     1.6

in billion IDR rupiah unless otherwise stated
¹ in IDR rupiah
Source: Ciptadana Securities (10/02/2017)

Location

Contact Details

Semen Gresik Building
Jalan Veteran, Gresik,
Surabaya - 61122
Phone: +62 31 398 1731 3
Fax: +62 31 398 3209
Email: corp.sec@sg.sggrp.com
www.semengresik.com