Indonesia’s Gajah Tunggal has reported a net profit of Rp 332 billion in the first quarter of 2011, a 35% year-on-year and 182% quarter-on-quarter increase.

This result is "well above" Deutsche Bank’s consensus (the bank’s equity research analysts comments that it is equal to 40% of consensus and 43% of its full year 2011 forecast). Much of this growth was, however, from foreign exchange gains and associates.

Core net profit, excluding foreign exchange and associates, was Rp 181 billion – relatively unchanged from the first quarter of 2010 and a quarter-on-quarter increase of 60%.

Sales during the quarter amounted to Rp 2.9 trillion and represent a 25% year-on-year increase and 23% of Deutsche Bank’s full year estimate. Margins were adversely impacted during the quarter by higher natural rubber prices, however Deutsche Bank analysts maintain that its forecast full year 2011 gross margin of 15.7% “seems conservative” as the tiremaker’s own price increases have been higher than expected and rubber prices have recently started to ease. According to Deutsche Bank, “robust product demand should also support a swift margin recovery over the next quarters.” (Tyres & Accessories)