SPINDO Builds a New Growth Foundation Through Plant 7 Expansion

PT STEEL PIPE INDUSTRY OF INDONESIA Tbk (SPINDO), delivered a solid performance in the first quarter of 2026 amid dynamic conditions in Indonesia’s steel industry. The Company continued to maintain profitability through cost efficiency, a stronger financial structure, and the continuation of its strategic expansion agenda, particularly through the development of Plant 7.

SPINDO Recorded Revenue in 1Q2026

In 1Q2026, SPINDO recorded revenue of IDR 1,22 trillion, slightly lower than IDR 1,28 trillion in the same period of the previous year. The decline reflected more dynamic market conditions at the beginning of the year, including changes in product mix and pricing dynamics during the quarter. 

Despite the softer top line, SPINDO was able to maintain its earnings performance. The Company recorded gross profit of IDR 213,3, with a gross profit margin of 17.5%. Meanwhile, SPINDO’s net profit reached IDR 77 billion, with a net profit margin of 6.3%.

Operational Efficiency Supported Profitability

Operational efficiency was one of the key factors supporting SPINDO’s performance in early 2026. The Company reduced operating expenses by approximately 14.5% year-on-year, helping maintain profitability despite a moderate decline in revenue. 

SPINDO also continued to apply cost discipline through raw material management and operating expense control. In 2026, the Company adjusted its accrual method for several expenses items, including religious holiday allowance and bonuses, allowing these costs to be distributed more evenly across quarters. 

This step reflects SPINDO’s commitment to maintaining operational efficiency while improving the quality of expense recognition, so that quarterly performance can better reflect the Company’s sustainable performance throughout the year. 

Stronger Financial Structure

From a balance sheet perspective, SPINDO’s financial position continued to demonstrate a strong foundation. The Company’s total asset increased to IDR 8,93 trillion in 1Q2026, supported by higher equity of IDR 5,73 trillion. At the same time, total liabilities declined to IDR 3,20 trillion, reflecting SPINDO’s strategy to maintain a healthy and disciplined financial structure. 

SPINDO has also continued to reduce its reliance on short-term debt by shifting toward a longer-term funding structure. The Company's debt-to-equity ratio stood at approximately 0.56x in 1Q2026, indicating that leverage remained well controlled. 

This strategy strengthens SPINDO’s financial flexibility in supporting both operational needs and long-term expansion, including production facility development and capacity enhancement. 

Maintained Liquidity to Support Expansion

In terms of liquidity, SPINDO recorded cash and cash equivalents of approximately IDR 806 billion at the end of 1Q2026. This cash position provides sufficient room for the Company to meet its funding needs, including bond repayment due in April 2026.

SPINDO’s investment cash flow was primarily allocated to the phased execution of Plant 7 expansion and production capacity enhancement. The investment was carried out in a structured manner to remain aligned with internal cash generation and avoid excessive on the Company’s capital structure. 

With adequate liquidity, SPINDO has the flexibility to continue its growth agenda while maintaining financial discipline. 

Product Diversification Strengthens Business Resilience

SPINDO has diversified product mix serving various sectors, including construction, infrastructure, utilities, automotive, furniture, and oil and gas. This diversification is one of the key factors supporting the Company’s business resilience amid changing market conditions.

In 1Q2026, the contribution from strips and plates increased significantly, while deliveries of project-based products such as spiral pipes and API pipes experienced timing delays. This condition affected the Company’s revenue and margin profile in the first quarter. 

However, SPINDO sees potential for margin normalization in the following quarters as backlog orders are realized. This outlook should be understood as management’s expectation, which remains subject to demand realization, project schedules, and market conditions. 

Plant 7 Expansion as a Foundation for Long-Term Growth

One of SPINDO’s key strategic agendas is the development of Plant 7, which is designed to strengthen production capacity and enhance the Company’s competitiveness in Indonesia’s steel pipe market. 

The first phase of Plant 7 development, the construction of the North Distribution Centre, was completed in 2024. This facility serves as a distribution center with an improved layout to reduce loading time and enhance handling efficiency. 

The second phase of Plant 7 development includes the installation of new 8-inch and 20-inch machines. The facility is targeted to add approximately 24.000 tons of API pipe capacity and around 36.000 tons of black pipe capacity by 2027, with total potential new output of approximately 50.000-70.000 tons. The plant is also supported by ERW technology, robotic automation, and Industry 4.0 monitoring system to improve production efficiency and quality consistency.

The development of Plant 7 is an important part of SPINDO’s strategy to move toward higher value-added products, improve efficiency, and strengthen its position as a national steel pipe producer. 

Supporting Indonesia’s Infrastructure and Energy Needs

The development of Plant 7 is aligned with potential steel pipe demand from various national projects, particularly in the energy, oil and gas, infrastructure, and utilities sectors. In the medium to long term, demand for large-diameter pipes is expected to remain relevant to gas network development, strategic infrastructure projects, refinery development, and industrial utility facilities.

SPINDO sees opportunities from projects such as gas network expansion, national infrastructure development, industrial estate development, and utility projects that require high-quality steel pipe supply. With enhanced capacity and technology, SPINDO aims to strengthen its role in supporting Indonesia’s development needs. 

However, the realization of these opportunities will depend on project schedules, tender processes, government policies, and market conditions. Therefore, SPINDO’s strategy is not built on a single sector, but on market and product diversification.

ESG and Sustainability Commitment

Beyond business expansion, SPINDO continues to implement various ESG initiatives. The Company has developed the use of solar panels across several plants as part of its efforts to improve energy efficiency and reduce carbon emissions. 

SPINDO also carries out CSR programs that support SDG 6: Clean Water and Sanitation through the installation of clean water pipeline from bore wells to storage tanks and residents homes in several areas across Java. These programs have been implemented in Petungsinarang, Pacitan; Dusun Undakan, Wonosobo; and Padukuhan Bulu, Gunungkidul.

These initiatives reflect SPINDO’s commitment not only to business growth, but also to contributing to the environment and society.

SPINDO’s Outlook

Looking ahead, SPINDO continues to direct its business strategy toward sustainable growth through sector diversification, operational efficiency improvement, capacity expansion, and stronger strategic partnerships. The Company also aims to increase the contribution of value-added products, particularly those related to national infrastructure, energy, and utility needs. 

Although first-quarter performance showed pressure on revenue and margins, SPINDO maintained a solid financial foundation. Plant 7 expansion, efficiency improvements, and a focus on value-added products remain important factors in supporting the Company’s long-term growth. 

With a healthy financial structure and continuously developing production capacity, SPINDO is well positioned to strengthen its competitiveness in Indonesia’s national steel pipe industry.

Conclusion

SPINDO’s 1Q2026 performance demonstrates the Company’s ability to balance profitability, efficiency, and long-term growth. The Company recorded revenue of IDR 1,22 trillion, net profit of IDR 77 billion, and cash position of approximately IDR 806 billion at the end of the period. 

Although revenue and margins faced pressure at the beginning of the year, SPINDO continued to maintain a solid financial structure, adequate liquidity, and a focused expansion agenda. With a broad product portfolio and the development of Plant 7 as a future growth engine, SPINDO continues to strengthen its role in supporting Indonesia’s steel pipe needs the development of the national manufacturing industry.