Indocement Tunggal Prakarsa, PT.

Financial Review
Management’s Discussion and Analysis
The Company’s consolidated financial statements include those of
PT Indomix Perkasa, PT Dian Abadi Perkasa and PT Indo Kodeco
Cement, a 72.1 percent owned subsidiary held through
PT Indocement Investama.
In 1999 the Company posted a net income after tax and minority
interest of Rp523 billion, including a gain on foreign exchange of
Rp527 billion, vis-a-vis a net loss of Rp634 billion in 1998.
The foreign exchange gain is primarily attributable to the adjustment
in the exchange rate of our foreign currency debts. As a result of
realizing a profit in 1999, the Company ended the year with a much
stronger financial position.
The consolidated net revenues increased by 11 percent, mostly from
higher selling price and export sales, from Rp1,590 billion in 1998 to
Rp1,759 billion in 1999, net of the sales revenue realized from
Plant 11 production during the test-run period which was capitalized
to construction in progress (minus corresponding cost) in conformity
with generally accepted accounting practice. Against the backdrop of
continuing economic difficulties, volumes and margins improved
slightly across our cement products.
Cost of sales and operating expenses increased by 20 percent from
Rp1,153 billion in 1998 to Rp1,388 billion last year due to higher
provision for bad debts and increase in production costs. The income
from operations decreased by 15 percent from Rp437 billion in 1998
to Rp371 billion in 1999. Other income (net of charges) increased
from a net charge of Rp1,519 billion in 1998 to an income of Rp386
billion in 1999. A contributing factor to the positive change was the
effect of foreign exchange. In 1998 there was a significant amount of
foreign exchange loss of Rp1,082 billion while in 1999 we realized a
foreign exchange gain of Rp527 billion. In addition, the interest
expense was down to Rp255 billion in 1999 from Rp383 billion in
1998. The reduction in the interest expense was the result of the
adjustment of the exchange rate from Rp8,025 to Rp7,100 in 1999.
I N D O C E M E N T A N N U A L R E P O R T 1 9 9 9 F i n a n c i a l R e v i e w
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