Pulp and paper producer PT Indah Kiat Pulp & Paper Tbk (INKP) and PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM) reported a steep plunge in net profits in the first half of this year as a result of rising operating expenses.
Indah Kiat's net profit in 1H 2011 plunged 116.23% to US$14.77 million from US$91.01 million in 1H 2010.
Operating profit slumped 46.60% to US$75.39 million from US$141.19 million as well due to higher operating expenses that rose 23.24% to US$128.32 million from US$104.12 million.
Indah Kiat booked a slight increase in net sales of 8.06% to US$1.34 billion from US$1.24 billion. Indah Kiat's sister company, Tjiwi Kimia also suffered a 45.45% drop in net profit to US$40.59 million from US$74.41 million.
Operating profit fell 12.36% to US$70.18 million from US$80.08 million because operating expenses was higher than net sales.
Operating expenses increased 9.42% to US$63.98 million from US$58.47 million, while net sales slightly increased 4.77% to US$721.09 million from US$688.29 million.
Sinarmas Group controls 52.72% stake and 60% stake both in Indah Kiat and Tjiwi Kimia via PT Purinusa Ekapersada. The remaining shares are owned by public investors.
Disclosure: No position at the stock mentioned above.
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