• Soft domestic demand
• Better margin as cost efficiency on track
• Substantial growth in income from operations, EBITDA and net income
• Solid Balance Sheet
• Expectation of upcoming infrastructure projects to bring recovery on domestic cement demand

Soft domestic demand

Financial Highlights in the First Half 2009

The impact of financial crisis started in the last quarter 2008 has resulted in soft domestic  demand in some big cities in Java since most of new residential and high rise buildings that are under construction seem slowing down or postponing their activities.  Therefore, national cement demand dropped by 7.0% and PT Indocement Tunggal Prakarsa Tbk.’s (the “Company”)  domestic sales volume were lower by 14.8% compared to the same period last year. This resulted in lower market share in 1H09 at 29.7% compared to 32.5% in H08. However, the Company’s domestic sales volume has shown big improvement in the month of June over the previous months and it is a welcome sign for the Company.

Export sales volume were down by -33.5% at 0.8 million tons in 1H09 (previous year: 1.2 million tons) due to the weakness of regional market in the first four months of 2009. Nonetheless, unexpected higher export sales volume has started in May and the trend is likely to continue for the balance of the year. Total sales volume in 1H09 was 6.1 million  tons or lower by 17.7% (previous year: 7.4 million tons).

Better margin as cost efficiency on track

The management has achieved better margin in 1H09 compared to the same period last year mainly due to the success of the Company to control the escalating cost in almost every aspect of operation. The key success is the Company’s ability to run only the most efficient kilns (while we shutdowns several inefficient kilns due to slow demand) and to exercise a tight control of fixed cost including lower repair and maintenance costs.

Despite of the increase in production cost per ton by 17.6%, we have to thank the successful cost efficiency especially in managing lower fixed cost as well as better sales mix proportion (higher domestic sales volume than last year), the gross profit margin improved to 47% from 41% or in the amount of Rp2,241 billion (previous year: Rp1,850 billion).

Operating expenses declined by -15.4% to Rp613 billion (previous year: Rp725 billion) in line with lower sales volume as well as lower logistic costs. Thus, income from operations rose by 44.7% to Rp1,628 billion (previous year: Rp1,125 billion) while operating margin advanced to 34% from 25%.

EBITDA also increased by 34.0% to Rp1,898 billion (previous year: Rp1,416 billion). Meanwhile, EBITDA margin expanded to 40% from 32%.

Due to the lower existing debt level (USD25 million only), the interest expense and other financial charges lessened by -60.1% to Rp30 billion from Rp76 billion. On the other hand, as a result of Rupiah depreciation, the Company experienced foreign exchange loss of Rp33 billion compared to foreign exchange gain of Rp18 billion in the same period last year.

On the bottom line, net income mounted by 51.8% to Rp1,172 billion (previous year: Rp772 billion).

Solid Balance Sheet

As of June 30, 2009, the Company continue to record net cash position with cash and cash equivalent at Rp1,137 billion. The management’s effort to enhance working capital management is also one of the key to achieve strong and solid balance sheet.

Capital expenditures for the full year of 2009 is expected at about USD75-80 million, including the new cement mills in Cirebon factory with capacity of 1.5 million tons planned to be completed by end of 2009. The capital expenditures payment in 1H09 was Rp151 billion compared to Rp237 billion in the same period last year.

No major capital expenditures for expansion is planned in the near future due to the Company’s ample capacity to supply the market demand.

* annualized

Expectation of infrastructure projects to bring recovery on domestic cement
demand

Mr. Daniel Lavalle as the President Director of the Company remarked:

"The national cement market experienced negative growth of -7% in the first half 2009. Nonetheless, we can see the demand has improved in the month of June showing a positive sign for the balance of the year. The government’s plan to spend on infrastructure project as well as the current low interest rate is the key driver to boost up the domestic cement demand in the near future. With its current excess capacity, the Company has a strong position to supply expected recovery domestic cement demand coming ahead”.

Jakarta, July 29, 2009

For further information, please contact:

Dani Handayani – Corporate Secretary
PT Indocement Tunggal Prakarsa Tbk.
Wisma Indocement 8th floor
Jl. Jenderal Sudirman Kav.70-71
Jakarta 12910
Telephone : (021) 2512121
Facsimile : (021) 2510066