PT Jaya Pari Steel Tbk (JPRS) is a domestic steel manufacturing company with main product of hot rolled steel plate with thickness range of 8 millimeters – 25 millimeters (mm). JPRS was formally established in 1973 and commence its commercial operation in 1976. Currently, JPRS production capacity has reached 66,000 metric ton plate per year. Currently, many things support Jaya Pari to grow, such as Indonesia economic growth, as measured with GDP has grown 2.8% QtQ in the 2Q 2010, or 6.2% YoY.
At the same time, inflation in 2Q 2010 remained comfortably low, paved the way for rupiah appreciation as much as 3.5% in 1H 2010.
A relatively low and stable BI rate at 6.5%, which caused a lowered banks interest rate on property and infrastructure loan, caused an increased of steel demand.
Government support on property and infrastructure sectors by providing stimulus as much as IDR2.6 trillion and IDR12.2 trillion, respectively. Also, increased demand on ships, which requires steel in their construction, in 2010. During 1H 2010, Jaya Pari revenue climbed up to IDR237.03 billion or increased 150.3% compared to 1H 2009 which is only IDR94.6 billion.
This improvement is mainly due to the increased of steel plate price.
Based on the increasing trend of sales price, JPRS net profit margin also significantly improved from -IDR29.7 billion in 1H 2009 to IDR38.6 billion in 1H 2010, or improved more than 100%."We believe that JPRS has experience a rebound phase in 1H 2010, where the sales price of steel plate is climbed up again, after dropped deep in 2009 period business prospects global steel improvement, as production has increased by 18% in 1H 2010 YoY, with June production of 118.8 million metric tons," said a company report published by PT Pemeringkat Efek Indonesia (Pefindo) yesterday. Apparent consumption for steel also increased 59.3% YoY during 1H 2010.
Better domestic steel industry condition as other industries obtained support from Government, such as in property and infrastructure industry, and also growing demand of ships, especially ships for coal transportation, fueled Jaya Pari to grow in years ahead. "Based on the above conditions, and looking back at JPRS performance in 1H10, we believe that Jaya Pari sales could grow 34.8% YoY in 2010 and 11.0% CAGR growth during 2009 – 2014 period." (wiw)