SMGR

Inflation rose more than 7.15 percent in May

The month of ramadhan will arrive in the middle of June and commonly consumption of goods and service will be double in quantity at ramadhan, as the result of that, the demand will pull the inflation rate. Aggregate demand will increase and the price level of goods and services are expected rise in month of ramadhan. In May of 2015, the inflation rate rose 7.15 %(source :  kompas) annually and it will be worst if the government do not anticipate it with more supply of goods in the market especially for consumption. Among of Indonesian citizen are Muslim who have duty to conduct fasting in that month.

The Fed rate may be increased in 2015?

The Fed rate is predicted increase in 2015 due the better economic indicator in US. The Fed would like to decrease inflation rate and money supply with higher interest rate. As the increase of fed rate the capital inflow is expected to be rose, the investor tend to look gain in US at Bond Market as the interest rate may be advanced.

Loan for Infrastructure project increased four times since 2007

Despite the loan for infrastructure project from bank increased four times since 2007, it is only covering 32% of total financial needs for the national infrastructure project.  Accordance to RJPM the infrastructure funding will allocate for various infrastructure project include Maritime, electricity, roads, housing, Oil and gas, water, Railroads, telematics and other transportations. The biggest portion is electricity project which is 20 % of total. The second is maritime sector (17.9%), followed by roads (16%) and housing (10%) (source : Indonesian update of Mandiri).

Cement consumption is predicted increase in 2015 due to the infrastructure project in Indonesia.

Financial Analysis

Semen Indonesia is a state owned company which is the biggest cement producer in Indonesia. In 2014, the sales growth was 10.1 % up compared to sales in 2013. The gross margin was 47.4 % of sales in 2014 which was less than gross margin in 2013 which was at 48.7 %. The activity ratio was stable; the company could maintain its business despite of the economic situation was slowing down.

The cost of operating may be added up by the higher price of energy. Semen Indonesia has several factories both in Indonesia and at abroad. The company had done acquisition of Thang Long cement at Vietnam in 2012 and at the same year the company has built new factories in Tuban and Sulawesi island. According its annual reports in 2012, the market share was more than 40 % in Indonesia.

expressed in rupiah (SMGR)	2013	2014	2015F	2016F	2017F
Revenue	24,501,240,780.0	26,987,035,135.0	29,415,868,297.2	32,063,296,443.9	34,948,993,123.8
COGS	-12,577,694,219.0	-14,195,968,934.0	-15,296,251,514.5	-16,672,914,150.8	-18,173,476,424.4
Gross Profit	11,923,546,561.0	12,791,066,201.0	14,119,616,782.6	15,390,382,293.1	16,775,516,699.4
Operating Expense	-3,902,612,073.0	-4,565,707,889.0	-4,976,621,599.0	-5,424,517,542.9	-5,912,724,121.8
Depreciation n amortization	-1,048,549,677.0	-1,271,618,313.0	-1,363,204,978.6	-1,439,842,114.5	-1,511,312,751.2
Other Income / - expense	288,183,490.0	519,945,090.0	566,740,148.1	617,746,761.4	673,343,970.0
Interest Expense	-340,168,567.0	-382,919,122.0	-22,198,008.7	-22,500,000.0	-22,500,000.0
Pretax Income	6,920,399,734.0	7,090,765,967.0	8,324,332,344.4	9,121,269,397.1	10,002,323,796.5
Taxes	-1,566,101,213.0	-1,517,188,688.0	-1,781,130,970.5	-1,951,649,062.2	-2,140,165,475.5
Net Income	5,354,298,521.0	5,573,577,279.0	6,543,201,373.9	7,169,620,334.9	7,862,158,320.9
Cash	4,070,492,871.0	4,925,949,551.0	10,312,208,723.2	16,369,631,770.5	23,186,379,894.2
Short Term Investment	142,434,379.0	105,569,233.0	105,569,233.0	105,569,233.0	105,569,233.0
Trade Receivable	2,238,452,900.0	2,553,653,508.0	2,783,482,323.7	3,033,995,732.9	3,307,055,348.8
Inventories	2,645,892,517.0	2,811,704,405.0	3,029,630,310.1	3,302,297,038.0	3,599,503,771.4
Other Current Asset	874,837,703.0	1,251,667,978.0	1,364,318,096.0	1,487,106,724.7	1,620,946,329.9
Total  Curr Asset	9,972,110,370.0	11,648,544,675.0	17,595,208,686.0	24,298,600,499.0	31,819,454,577.3
Net Property, Plants and equipment	18,862,518,157.0	20,221,066,650.0	21,357,861,671.4	22,418,019,556.9	23,406,706,805.7
Other Non Curr Asset	1,958,255,565.0	2,445,054,702.0	2,665,109,625.2	2,904,969,491.4	3,166,416,745.7
Total Non Curr Asset	20,820,773,722.0	22,666,121,352.0	24,022,971,296.6	25,322,989,048.4	26,573,123,551.4
Total Asset	30,792,884,092.0	34,314,666,027.0	41,618,179,982.6	49,621,589,547.3	58,392,578,128.7
Short Term Debt	320,926,026.0	81,808,678.0	90,000,000.0	90,000,000.0	90,000,000.0
Account Payable	1,672,272,211.0	2,160,613,721.0	2,328,075,741.5	2,537,602,558.2	2,765,986,788.5
Curr Portion of Long term debt	519,274,300.0	516,069,752.0	530,000,000.0	530,000,000.0	530,000,000.0
Other Curr Liabilities	2,785,158,000.0	2,514,776,971.0	2,741,106,898.4	2,987,806,519.2	3,256,709,106.0
Total Curr Liabilities	5,297,630,537.0	5,273,269,122.0	5,689,182,639.9	6,145,409,077.5	6,642,695,894.4
Long Term Debt	113,093,127.0	131,988,819.0	130,000,000.0	130,000,000.0	130,000,000.0
Deferred Taxes	7,219,730.0	58,201,897.0	58,201,897.0	58,201,897.0	58,201,897.0
Other Non Curr Liabilities	3,570,964,823.0	3,848,754,253.0	4,195,142,135.8	4,572,704,928.0	4,984,248,371.5
Total Non Curr Liabilities	3,691,277,680.0	4,038,944,969.0	4,383,344,032.8	4,760,906,825.0	5,172,450,268.5
Total Liabilities	8,988,908,217.0	9,312,214,091.0	10,072,526,672.6	10,906,315,902.5	11,815,146,162.9
Minorities	921,432,547.0	960,414,183.0	960,414,183.0	960,414,183.0	960,414,183.0
Common Share	593,152,000.0	593,152,000.0	593,152,000.0	593,152,000.0	593,152,000.0
Additional Paid Up Capital	1,458,257,900.0	1,458,257,900.0	1,458,257,900.0	1,458,257,900.0	1,458,257,900.0
Retained Earning	18,480,910,979.0	21,630,157,442.0	28,173,358,815.9	35,342,979,150.9	43,205,137,471.8
Other	350,222,449.0	360,470,411.0	360,470,411.0	360,470,411.0	360,470,411.0
Share holder Equity	20,882,543,328.0	24,042,037,753.0	30,585,239,126.9	37,754,859,461.9	45,617,017,782.8
Share holder Equity & Min Interest	21,803,975,875.0	25,002,451,936.0	31,545,653,309.9	38,715,273,644.9	46,577,431,965.8
Total SE,Min Interest and Liabilities	30,792,884,092.0	34,314,666,027.0	41,618,179,982.6	49,621,589,547.3	58,392,578,128.7
Financial Ratio	2013	2014	2015F	2016F	2017F
ROA	17.39	16.24	15.72	14.45	13.46
ROE	25.64	23.18	21.39	18.99	17.24
Gross Margin	48.67	47.40	48.00	48.00	48.00
Profit Margin	21.85	20.65	22.24	22.36	22.50
Current Ratio	1.88	2.21	3.09	3.95	4.79
Debt to asset	0.03	0.02	0.02	0.02	0.01
Dividend Pay Out Ratio	41.2	-	-	-	-
Days Payable	49	56	56	56	56
Days Inventory	77	72	72	72	72
Days Receivable	33	35	35	35	35
Free Cash Flow		3,453,984,102.0	5,366,126,421.2	6,057,423,047.3	6,816,748,123.7
EBITDA	8,309,117,978.0	8,745,303,402.0	9,709,735,331.7	10,583,611,511.6	11,536,136,547.6
EPS	905.00	938.00	1103.12	1208.73	1325.49
Revenue Growth		10	9	9	9