Semen Indonesia: H1 profit up 5.5x, but margins remain under pressure

On August 31, PT Semen Indonesia (Persero) Tbk released its results for the first half of 2026. Net profit for the period rose to IDR 228.3 billion from IDR 40.0 billion a year earlier, revenue increased 13.1% to IDR 17,649.5 billion. However, EBITDA margin was only 10.9% and net margin 1.3%, reflecting continued margin pressure. Shares trade at an EV/EBITDA LTM multiple of 2.06, which looks attractive given weak dynamics, but warrants caution due to low profitability.

Key takeaways

— Net profit for the half-year rose 5.5x to IDR 228.3 billion, but from a low base

— Revenue for the half-year increased 13.1% to IDR 17,649.5 billion, which did not save the margin

— EBITDA margin for the half-year was 10.9% – pressure on profitability persists

— Net margin for the half-year – 1.3%, profit is eaten by interest and taxes

— Operating cash flow for the half-year – IDR 2,170.8 billion, but investments and debt consume it

— Leverage: net debt / EBITDA LTM – 0.0, but absolute debt decreased by IDR 0.9 billion over the half-year

— Valuation: EV/EBITDA LTM 2.06 – below its own history, but profitability is not improving

Attractiveness

Key figures, IDR bn

Net profit for the half-year rose 5.5x to IDR 228.3 billion, but from a low base

For the first half of 2026, net profit attributable to owners of the parent amounted to IDR 228.3 billion versus IDR 40.0 billion for the same period a year earlier. The 5.5x growth is impressive, but it starts from a very low base: a year ago profit was almost zero due to weak conditions and one-off expenses.

The second quarter of 2026 was weaker than the first: net profit for the quarter was IDR 80.3 billion versus IDR 148.0 billion in the first quarter (calculated). This indicates that the recovery is uneven, and in the second quarter the pace slowed.

Revenue for the half-year increased 13.1% to IDR 17,649.5 billion, which did not save the margin

Revenue for the first half of 2026 increased 13.1% to IDR 17,649.5 billion compared with IDR 15,609.0 billion a year earlier. Growth was driven by both volumes and pricing, but it did not lead to a proportional increase in profit.

In the second quarter of 2026, revenue was IDR 8,288.5 billion, lower than the first quarter (IDR 9,361.0 billion, calculated). Seasonality in the construction sector usually gives a stronger second quarter, but here we see the opposite – possibly due to weather conditions or competition.

EBITDA margin for the half-year was 10.9% – pressure on profitability persists

EBITDA for the first half of 2026 was IDR 941.1 billion (calculated from quarterly data), corresponding to a margin of 10.9%. This is a low level for a cement producer – historically Semen Indonesia had a margin above 20%.

In the second quarter, EBITDA was IDR 941.1 billion – the same as in the first quarter, but with lower revenue the margin improved slightly. Nevertheless, operating profit for the quarter was only IDR 156.3 billion, indicating high depreciation charges and operating expenses.

Net margin for the half-year – 1.3%, profit is eaten by interest and taxes

Net margin for the first half of 2026 was only 1.3%. Even after a 5.5x increase in profit, the company earns only 1.3 cents of net profit for every rupiah of revenue.

Finance costs for the half-year were IDR 335.3 billion, income tax – IDR 185.4 billion. These two items together consume more than half of operating profit, leaving little for shareholders.

Operating cash flow for the half-year – IDR 2,170.8 billion, but investments and debt consume it

Operating cash flow for the first half of 2026 was IDR 2,170.8 billion – noticeably better than a year earlier (IDR 1,173.9 billion). The company is collecting money from the market, but the main question is where it goes.

Capital expenditures for the half-year were IDR 533.4 billion (calculated from quarterly data), significantly lower than operating flow. However, the company directed IDR 960.0 billion to repay long-term loans and IDR 714.0 billion to repay bonds, which led to a decrease in cash by IDR 1,034.9 billion over the half-year.

Leverage: net debt / EBITDA LTM – 0.0, but absolute debt decreased by IDR 0.9 billion over the half-year

At the end of the half-year, net debt was IDR 4,054.2 billion, and the net debt / EBITDA LTM ratio was 0.0. This is a very low level, but it also reflects weak EBITDA: with a margin of 10.9%, EBITDA LTM is IDR 5,763.7 billion, making the ratio deceptively low.

Over the last 12 months, net debt decreased by IDR 2.6 billion, and over the half-year – by IDR 0.9 billion. The company is actively reducing borrowings, which is positive, but does not solve the profitability problem.

Valuation: EV/EBITDA LTM 2.06 – below its own history, but profitability is not improving

The market capitalization of the company is IDR 11,854.6 billion, and EV/EBITDA LTM is 2.06. This is an extremely low multiple, especially for a cement company with state control and stable cash flow.

P/E LTM is 29.08 – a high level, but due to low net profit. Investors pay for EBITDA, not for profit, and at current profitability the shares look cheap on EV/EBITDA, but expensive on P/E.

Dividend yield for the last 12 months is 1.61%, lower than the market average. The company pays dividends, but they are small relative to the share price.

Valuation on the latest reported figures

Bottom line

For the first half of 2026, Semen Indonesia showed revenue growth of 13.1% and a fivefold increase in net profit, but from a low base. Profitability remains under pressure: EBITDA margin of 10.9% and net margin of 1.3% – far from historical levels. The company generates operating cash flow (IDR 2,170.8 billion for the half-year), but a significant portion goes to debt repayment rather than development or dividends. At EV/EBITDA LTM of 2.06, the shares look cheap, but this reflects weak profit and low market expectations. The verdict is rather attractive: the potential for margin recovery and low leverage offer a chance for improvement, but confirmation requires margin growth in the coming quarters.