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Holcim seeks Rp 2.5t loans for refinancing
Cement execs: PT Holcim Indonesia advisor and CEO office director Lilik Unggul Raharjo (left to right), aggregates and construction materials director Derek Williamson, chief financial officer Kent Carson, legal and corporate affairs director F
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span class="inline inline-center">Cement execs: PT Holcim Indonesia advisor and CEO office director Lilik Unggul Raharjo (left to right), aggregates and construction materials director Derek Williamson, chief financial officer Kent Carson, legal and corporate affairs director F. Helianti Sastrosatomo, human resources director Wiwik Wahyuni, commercial director Jan Kunigk and president director Gary Schutz pose for photos after an annual shareholders meeting in Jakarta on Tuesday. JP/Jerry Adiguna
Major cement firm Holcim Indonesia is looking for Rp 2.5 trillion (US$189.59 million) in loans to refinance its maturing debts and wants to replace foreign-denominated debt to ease the currency burden, amid its dwindling financial performance.
Holcim Indonesia chief financial officer Kent Carson said that the company, which is in talks with a number of banks, expected to have a new loan facility in place in June, either in the form of syndication or a bilateral facility from a mix of local and foreign lenders with a maturity period between three and five years.
'There will be some renewing and the rest of the money is for capital projects and operations,' Carson told reporters on the sidelines of the company's annual general shareholders meeting in Jakarta on Tuesday.
Holcim Indonesia's current liabilities stood at Rp 4.45 trillion as of March, with Rp 1.32 trillion in long-term bank loans due this year. Total liabilities stood at Rp 8.78 trillion, while total equity was Rp 8.79 trillion.
Carson added that the company was working on refinancing its foreign-denominated debts with rupiah debts to ease the impact on the company's financial performance.
'For the end of 2016, we're targeting to have only 19-20 percent of foreign debts [out of total debts],' he said, adding that it made more sense to have rupiah debts as the company's assets and operations were in Indonesia.
Holcim Indonesia's foreign currency loans to date stood at 36 percent of its total debts, slashed by almost half from 70 percent previously, because of major restructuring efforts in October last year.
Holcim Indonesia, the local unit of the Zurich-based Holcim Ltd., experienced a 89.7 percent drop in net profit to Rp 33 billion in the first quarter of this year from last year driven by a high increase in financial costs. This result came on the heels of a poor performance throughout 2014.
The company also saw a 5 percent drop in quarterly revenues to Rp 2.25 trillion as it booked a 7 percent decline in cement sales by volume in line with the market trend.
Nationwide domestic cement consumption shrank 2 percent on an annual basis to 18.25 million tons from January to April this year as the country's economy slowed down, according to data from the Indonesian Cement Association.
Cement consumption has been regarded as a reflection of the developing country's economic growth.
Indonesia's economy grew 4.7 percent in the first quarter this year, the slowest in six years and since the start of the global financial crisis.
Holcim, the country's third largest producer with a 14 percent market share, was forced to lower its selling price by Rp 3,000 a sack to maintain its market, after President Joko 'Jokowi' Widodo instructed state-run cement makers to reduce their prices.
Amid poor financial results and weak demand, Holcim announced earlier this month that it planned to lay off workers in a corporate restructuring, which its labor union said could affect around 350 employees.
