Sales Of Domestic Cement Are Predicted To Increase By 4 Percent In 2023

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Indocement Tunggal Prakarsa Tbk predicts that the national domestic cement sales volume will grow by 4 percent in 2023.

"The construction of the new capital city (IKN) will also support the demand for bulk cement, therefore, we estimate that domestic cement will grow by around 2 percent to 4 percent in 2023," said President Director of PT Indocement Tunggal Prakarsa Tbk, Christian Kartawijaya in the Public Expose 2023, online, quoted from Antara, Friday, March 31.

According to him, this year with a combination of higher prices than last year and high rainfall since the beginning of the year, demand for pocket cement looks relatively weak.

However, with Eid al-Fitr celebrations earlier than last year, he hopes that demand for pocket cement can begin to recover in May 2023 and continue into the second semester where public spending can increase before the 2024 election year.

"Meanwhile, we estimate that demand for bulk cement will continue to grow because the Infrastructure Budget summarized from the 2023 State Budget is set to be 5 percent higher than 2022," he said.

Christian explained, in 2022, Indocement posted a sales volume of 17.58 million tons of cement and klinker, a decrease of 374 thousand tons or minus 2.1 percent from the volume of 2021.

However, the company's net income increased by 10.5 percent due to an increase in selling prices throughout 2022 to Rp16.32 trillion, from the previous year's Rp14.77 trillion.

Then, the cost of revenue in 2022 increased 16.0 percent from minus Rp9.64 trillion to minus Rp11.18 trillion due to an increase in energy costs, especially from coal prices, in the middle of the first year, reducing gross profit margin to 31.5 percent in 2022 from 34.7 percent in 2021.

"In the second half of 2022, the new company managed to get 60 percent of the total coal demand", Christian explained.

According to him, to reduce the use of coal and the impact of high coal prices, the company continues to increase the use of alternative fuel consumption from 12.2 percent in 2021 to 18.1 percent in 2022, including an increase in the use of low-calorie coal (LCV) from 88 percent to 92 percent.

Furthermore, the increase in operating expenses by 3.6 percent from minus Rp3.21 trillion to minus Rp3.33 trillion was due to an increase in logistics costs and corporate action in 2022.

Then there was an increase in other net operating expenses by 155.7 percent from Rp163.3 billion to Rp417.6 billion in 2022 due to foreign exchange profits, insurance claims, used goods sales, and the completion of several projects.

"As a result, in 2022, the operating profit margin will decrease from 14 percent to 13.6 percent and the EBITDA margin will decrease from 22.5 percent to 21.2 percent," he explained.

Christian explained that the Company recorded lower net financial income of minus 70.8 percent from Rp139.3 billion in 2021 to Rp40.6 billion due to lower cash positions in connection with the share purchase program.

"The net income tax burden increased by 0.3 percent from minus Rp445.5 billion to minus Rp446.9 billion due to an increase in operating profit. Based on the financial figure above, profit for the year rose 3 percent from Rp1.78 trillion to Rp1.84 trillion in 2022," said Christian.