Gajah Tunggal FY 2009 Profit Increases, Amid Recovery on Margins

Gajah Tunggal’s FY 2009 profit increases, amid recovery on margins
PT Gajah Tunggal Tbk. managed to overcome a difficult first half of 2009, to post stable net sales for the full year of Rp 7,936 billion compared to Rp 7,963 billion in 2008, as global macro economic conditions improved and the domestic market proved resilient in the second part of the year. Overall sales volumes were down in 2009, primarily due to volume decreases in the export markets.

Gross profit in 2009 increased 60% to Rp. 1,822 billion from Rp 1,135 billion in 2008, as the Company benefited from lower raw material inventory costs ordered in the first part of 2009, which coincided with a higher margin product mix and favorable exchange rates. Consequently, gross margin for FY2009 surged to 23% and EBITDA in 2009 reached a better-than-expected US$ 142 million, up 52% from US$ 94 million in the prior year.

Bottom line earnings in 2009 improved significantly to Rp. 905 billion compared to a loss of Rp (625) billion in 2008. Strong operational performance was the main driver of this, though a large translational foreign exchange gain, related to our US$ denominated bonds, contributed to the gain in net income as well. Furthermore our associated company, PT Polychem Indonesia Tbk. added Rp 16 billion to earnings from a loss of Rp. (76) billion the year before.