UT raises sales target by 25% after a robust first half

JAKARTA: PT United Tractors Tbk boosts its heavy equipment sales by 25% this year after it had a good first half.The company expects to sell 7.500 units this year, from 5,400 units last year, according to Corporate Secretary Sara Loebis. It sold 4,300 units, or 71.67% of the initial 2011 sales target during the first half.Heavy equipment is about half of the companys total sales, while the remainder is the combination of mining contracts and coal sales.At the moment, heavy equipment unit contributes 55% to United Tractors total sales, while the remaining 45% is from its mining unit. Nevertheless, analyst at PT Onix Capital, Bagus Hananto perceived that United Tractors sales volume may decline following the recent Japans quake. This natural disaster in fact caused decreasing sales over the past two months.United Tractors, a subsidiary of PT Astra International, sold 617 heavy equipments in May, or a decrease by 19.6% compared to that in April where it sold 767 units, the lowest monthly sales this year.This decline was primarily caused by the component supply problem from Japan due to the Marchs quake. The companys revenue from heavy equipment unit in the second quarter of 2011 will be affected although it will not be significant, wrote Bagus in a June 21 research note to clients.The company in fact is still able to record solid sales, above 600 units every month in April and May. The company is projjected to book favorable consolidated sales, backed by mining contract unitand coal sales.United Tractors Finance Director Gideon Hasan said he expects the acquisition of a coal mining site with a 50 million ton reserve will be realized by the end of this month.We will source the needed fund for the acquisition from our recent rights issue. I cannot disclose the exact amount yet. Hopefully we are able to announce this by the end of this month.United Tractors recently issued new shares valuing IDR6.07 trillion, where 45% of the proceeds were to be used to finance the planned acquisition while the remaining was earmarked for working capital particularly in financing heavy equipment business and mining contract.Corporate Secretary Sara added that the acquisition will bolster coal production by 500,000 ton next year after the would-be acquired greenfield mining site is developed.It's a greenfield. Usually, we need 10 months to make the new mining site produce 500,000 tons. Possibly the site can begin Giving output by next year if the acquisition is completed by this month, she added. T02