Bahana Securities SMGR reported FY09 net profit in line with our expectation

Semen Gresik (SMGR-BUY-IDR7,550-Tp:IDR9,200) reported FY09 net profit of IDR3.3t (+31.8% y-y), in line with our expectation but above market consensus. 4Q09 net profit of IDR918b grew 2.7% q-q. The company booked 4Q09 sales of IDR4.0t rose of 9.6% q-q. It was mainly driven by the 8.9% q-q growth in 4Q09 volume to 4.7mt, making up FY09 total volumes of 17.1mt (+2.9% y-y vis-à-vis +0.7% y-y the industry’s growth). EBITDA margins hovered at 34.0% in 4Q09 or 33.5% for FY09. We maintain our Buy rating on the counter, trading at 2010 P/E of 12.4x or 26.2% discount to market valuation. It is worth of noting that SMGR’s 2M10 volume grew 8.5% y-y to 2.8mt. On separate news, SMGR stated that they still stick on their plan to acquire Semen Baturaja. Yet, SMGR withdrew their interest on Semen Kupang. Choil Hasan, SMGR Financial Director, said they will use internal funds to support their 2010 expenditure plan amounting to IDR3t-IDR4t.