Thursday, July 27, 2017

PT United Tractors Tbk (“the Company”) booked a net income of Rp29.4 trillion during the first half of 2017, an increase of 30% over the same period in 2016. This increase in net income was mainly due to an increase in sales volume of heavy equipment, coal production and overburden removal, as well as the average selling price of coal. Each business unit, namely: Construction Machinery, Mining, Mining, and Construction Industries respectively contributed 38%, 45%, 13% and 4% to the total consolidated net income.

In line with improved operational performance accompanied by better revenue margins, the Company recorded a net profit during the first half of 2017 reaching Rp3.4 trillion, an increase of 85% when compared to net profit in the first half of 2016 amounting to Rp1.9 trillion.

Construction Machinery Business Segment

The Construction Machinery business segment recorded an increase in sales of Komatsu heavy equipment by 69% to 1,751 units, compared to 1,036 units in the first half of 2016. The increase in sales of heavy equipment was mainly driven by increased sales in the mining sector. Of the total sales of heavy equipment, 51% is absorbed by the mining sector, 22% is absorbed by the construction sector, 14% is absorbed by the plantation sector, and the remaining 13% is absorbed by the forestry sector. Komatsu was able to maintain its position as a heavy equipment market leader, with a domestic market share of 37% (based on internal market research). Sales of other brand products, namely UD Trucks, increased from 217 units to 276 units, while sales of Scania trucks and buses increased from 246 units to 553 units. On the other hand, sales of spare parts and heavy equipment maintenance services increased by 16% to Rp3.2 trillion. In total, net revenue from the Construction Machinery business segment recorded an increase of 63% to Rp11.2 trillion.

Mining Contracting Business Segment

The Mining Contracting business sector operated by PT Pamapersada Nusantara (PAMA) recorded a 15% increase in net income to Rp13.3 trillion. PAMA recorded an increase in coal production volume from 50.2 million tons to 52.0 million tons, while the volume of overburden removal increased from 341.1 million bcm to 360.4 million bcm.

Mining Business Segment

Mining business is run by PT Tuah Turangga Agung. Total coal sales up to the first half of 2017 reached 3.6 million tons, down by 18% from 4.5 million tons in the same period in 2016. The decline in coal sales was due to a decrease in volume from the coal trading business. However, the increase in the average selling price of coal made the Mining business unit revenue record a 24% increase in net income to Rp4.0 trillion.

Construction Industry Business Segment

The Construction Industry business is run through PT Acset Indonusa Tbk (ACSET). Up to the first semester of 2017, ACSET posted a net income of IDR1.0 trillion, an increase of 8% from the previous IDR944 billion in the same period in 2016. Meanwhile, net profit increased by 95% to IDR64 billion. The value of new contracts obtained up to June 2017 reached IDR 7.1 trillion compared to IDR 2.4 trillion in the same period in 2016. Significant increase in new contracts was obtained from several strategic contracts in the infrastructure sector, including the Jakarta-Layang Toll Road contract Cikampek II, Bakauheni-Sidomulyo Toll Road, and JORR II Toll Road Kunciran-Serpong Section.

In March 2017, Bhumi Jati Power (BJP), which is 25% owned by a subsidiary of the Company, reached an agreement regarding a project funding agreement with creditors (financial closing). BJP will develop and operate a 2×1,000 MW steam power plant in Jepara, Central Java. At present, the BOT (build, operate and transfer) project is under construction and is expected to begin commercial operations in 2021. Bhumi Jati Power is a joint venture between a subsidiary of the Company, Sumitomo Corporation and Kansai Electric Power Co. Inc.

In March 2017, the Company through its subsidiary PT Tuah Turangga Agung, completed the acquisition of 80.1% ownership of PT Suprabari Mapanindo Mineral, a coking coal company (high calorie coal which is commonly used as a mixture in steel smelting) located in Central Kalimantan . The concession is currently in the process of supporting infrastructure development and is expected to start production at the end of 2017.