Gajah Tunggal 1Q11 Sales Increased 25% Even As Operating Margins Came Under Pressure

PT Gajah Tunggal Tbk posted net sales of Rp 2,896 billion in 1Q11, an 25.1% increase from Rp 2,315 billion in the same period last year. All segments increased in sales, with particular strong performance in passenger car radial segment and the synthetic rubber division. Both volumes as well as ASP increases contributed to the growth in sales.

Nonetheless even with the selling price increases, margins were significantly presses in 1Q11, as certain key raw material prices rose to historic levels, as well as a rapidly increasing oil price. Consequently, gross margin decreased to 14.8% in 1Q11 though gross profit in the quarter still grew to Rp 428,5 billion. EBITDA 1Q11 reached USD 42,3 million.

In 1Q11, Net income grew to Rp 331,7 billion or Rp 95 per share and was supported by the stronger Rupiah against the USD resulting in a foreign exchange gain related to our US$ denominated bonds.