JAKARTA: PT Krakatau Steel Tbk's operating profit fell 73.16% in the first half of 2011 on lower sales volume, while net profit rose, thanks to a one-time gain from an asset sale.Krakatau Steel booked operating income of IDR326.33 billion in the January-June period, compared to IDR1.22 trillion a year earlier, according to a filing to Indonesia Stock Exchange yesterday.Krakatau Steel, Indonesia's largest steel maker, sold 967,900 tonnes of steel products in the January-June period, falling 17.2% from 1.17 million tonnes in the same period last year.The firm's revenue fell 6.56% to IDR8.41 trillion in the first half of this year, compared to IDR9 trillion at the same period last year. On the other hand, direct costs rose by 5.66% to IDR7,51 trillion compared to IDR7.11 trillion in first half 2010.Despite a sharp drop in operating income, the company's net profit rose 36.97% to Rp1,37 trillion in the first half of this year, compared to Rp997,75 billion in the same period last year.Gains from a sale of asset helped the company to compensate the sharp drop in the operating income. The company booked gains from selling a 302.7 hectare land in Kubangsari, Cilegon Banten worth IDR1.09 trillion to a joint-venture company between Krakatau Steel and South Korea's steel maker POSCO, said Krakatau Steel Financial Director Sukandar.But Sukandar expects the company's performance will improve in the second half this year on higher production.We expect production will exceed 1 million tonnes after it had 967,000 in the first half, he said.Krakatau Steel is expected to book revenue of IDR19.31 trillion and net income of IDR1.31 trillion this year, analysts consensus compiled by Bloomberg shows.Based on the first half performance, Krakatau Steel only achieved 43.55% of this years revenue target while exceeding its net profit target.Edwin Sebayang, head of research at PT MNC Securities said Krakatau Steels performance will be modest considering its limited production volume.Krakatau Steels net profit has exceeded analysts estimate but it was contributed by a sale of asset. But in term's of production, Krakatau Steels ability is limited, he said.Komatsus heavy equipmentSeparately, PT United Tractors Tbk sold 4,333 units of Komatsu's heavy-equipment in the first half of 2011, surging 58.60% from 2,732 units in the same period last year.On the mining contractor business, PT United Tractor's subsidiary PT Pamapersada Nusantara produced 39.9 million tonnes of coal, a 5.84-percent increase from 37.7 million tonnes in the same period 2010.Pama's overburden removal rose 15.95% to 364.9 million bank cubic meter (bcm) from 314.7 million bcm.On the coal mining business, PT Prima Multi Mineral dan PT Tuah Turangga Agung men sold a combined 2.2 million tonnes of coal in the first half of 2011, surging 71.87% from 1.28 million tonnes from the same period last year. (wisnu wijaya) (t02/msw)

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