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Corporate Profile | Message from the President Director
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Consolidated Net Profit grows 31% YOY Dear Shareholder, With this report, I am proud to report to you that despite tough economic conditions, AKR Corporindo Tbk., consolidated Net Profit recorded an increase 31% to Rp 274.7 billion, a record for the Company since it was listed on the stock exchange. This financial performance was achieved due to growth in volume of petroleum and basic chemical distributed by the company and the sustained rise in profitability of the manufacturing business. |
| Mr Haryanto Adikoesoemo | |
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Improving domestic conditions in Indonesia aided rebound in Second Semester of 2009:
The Company registered sales revenue of Rp 8.95 Trillion in 2009, which represents a Compounded Annual Growth Rate (CAGR) of 26% over the past 6 years. Consolidated Sales revenue was 5% lower during 2009 compared to 2008 performance, due to the lower average sales price realization in petroleum products which stabilized during 2009 from the record high levels in 2008 and basic chemicals which declined due to the weak global economic conditions. The lower selling prices were compensated by increased sales volumes with the growing demand for petroleum and basic chemicals in Indonesia. Coming out of the global economic meltdown during the first half of the year 2009, the Company reported lower volume sales in basic chemicals and sorbitol and starch derivatives business during the first semester of the year 2009 with net profit of Rp 110 billion for the 6 months ended 30th June 2009.. We are pleased to report a strong rebound in the petroleum and basic chemicals sales during the second semester of 2009, which enabled the company to post a growth of 31% in the consolidated net profit of Rp 274.7 billion for the full year of 2009 compared to 2008 performance. The Company has also consistently reported growth in Net profits with a CAGR of 24% over the past 6 years (CAGR). Largest Private Sector distributor of Unsubsidized Petroleum Products AKR continues to grow its Petroleum distribution business, which it started in Oct 2005, as the first private company to import and distribute unsubsidized petroleum products. From 21,000 KL in 2005, the Company’s petroleum distribution volumes have grown to 1,025,042 KL during the year 2009. Petroleum volumes grew 53% year on year. This growth is driven by the marketing efforts to ensure assured supplies of fuels required by Industrial, mining, energy and other sectors leveraging on AKR’s strong supply network and expanding the petroleum terminals and other facilities. The Company now operates not only in Jawa, Sumatra, but has expanded its operations into Bali, Kalimantan, Sulawesi during the past year. In a historical move, the Indonesian petroleum deregulation body, BPH Migas, has now allowed private companies to participate in the distribution of the subsidized petroleum products as part of the Public Service Obligation (PSO) during the year 2010. We are happy to report, that the Company is the first Indonesian private company that has been awarded rights to distribute subsidized fuel in 4 provinces in Indonesia. In order to be eligible to participate in the PSO the participants in the tenders were evaluated on various parameters including the experience, ability, facilities, financial strength and others and AKR won the tender process along with 2 other foreign companies. The Company has been allocated 56,500 KL of High Speed diesel in cities in Kalimantan and Sumatra during the year 2010. This opening of the subsidized fuel offers growth opportunity for the Company and we are working closely with our partners to distribute the subsidized fuels. Petroleum now contributes 56% of the total sales Revenue with sales of Rp 5,028 billion during the year ended 31st December 2009 Domestic demand drives manufacturing profitability growth PT. Sorini Agro Asia Corporindo Tbk (Sorini) ( 69.5% shareholding), major subsidiary of the Company reported 10.6% growth in Net Profits during the year 2009 to Rp 157 billion compared to Rp 142 billion during the previous year. Sorini one of the preferred supplier of Sorbitol and starch sweeteners to Multi national companies worldwide, reported sales of Rp 1,471 billion during the year 2009, with growth in volumes of products focusing on the domestic market in Indonesia. The Company which now exports to over 79 countries, experienced slow down in its exports but the strong performance in the starch and starch sweeteners business in Indonesia has enabled it to report sustained growth in its Margins. Sorini’s sales growth grew at a CAGR of 16% CAGR while net profit grew 34% CAGR over the past 5 years. PT Arjuna Utama Kimia ( ARUKI) a subsidiary of the Company engaged in Adhesives and paper chemicals manufacturing business also has reported improved performance during the year Third party logistics business in Indonesia and China reported better profitability during the year 2009. While container traffic grew in Indonesia and China, slow down in the economic activity in China resulted in lower volumes of bulk commodities including coal handled in the ports. Despite lower volumes, the various efficiency and cost reduction measures implemented in the River ports in China enabled the ports to report improvement in profitability. Strategy & Future Plans AKR has focused on developing a leadership position in all the business segments it operates by strengthening its competitive advantage both in terms of supply chain capabilities and also its customer network. AKR has during the past 5 years expanded its network in Indonesia and China and now operates in over 18 locations in Indonesia and 2 locations in China. The Company plans to further strengthen its supply chain capabilities in Eastern Indonesia to penetrate the markets and provide value added services to its customers. In order handle larger volumes and improve efficiencies the Company is also expanding its existing petroleum tank terminal capacities in Kalimantan and Sumatra islands, which offer areas for potential growth in the near future. In order to improve economies of scale, the Company plans to build capacity to handle larger size vessels in Surabaya port by building a new jetty of 65,000 DWT To fund these expansions and also to provide for adequate working capital the Company announced plans for a rights issue in the ratio of 1 new share for each 5 shares held in the first quarter of 2010 (at a price of Rp 860/share). We are happy to report that the Company’s right issue was well received by its shareholders which enabled the company to raise Rp 540 billion during the first quarter of the year 2010. This corporate action will not only strengthen the Company’s balance sheet but also provide a platform for future growth opportunities. In the manufacturing business, Sorini completed the expansion of the Maltose and Maltodextrine plant in Surabaya adding more than 42,000 MT additional production capacity per annum. This new capacity of starch sweeteners will enable Sorini to grow its market share of starch sweeteners to its domestic customers, who currently rely on imported supplies.. Also in the manufacturing business, we believe vertical integration is a long term strategy for improving our cost structure, securing consistent flow of raw materials as well as increasing our sales revenue in the future. Employing this strategy, Sorini acquired 4 starch production facilities in 4th quarter of 2009. These plants will enable Sorini to be self sufficient in terms of its starch requirements and may generate additional sales revenue via surplus starch sales to external parties. Human Resources As AKR continues to expand the Company endeavors to maintain a sound balance between the work responsibilities and the number of people employed in order to neither overburden the personnel nor increase the operating expenses of the Company significantly. The Company had a total workforce of 2,132 employees as of 31st December 2009. In order to retain the existing talent, the Company has implemented a Management Stock Option Program (MSOP) for eligible employees, which is designed to align the employees’ individual goals with the company’s goals i.e. to create shareholder value. This promotes a strong sense of Company ownership among the individual employees as well as curtails the talented employee attrition rate. We remain committed towards building on our core strengths and optimizing our potential by strengthening our logistics network and supply chain to generate sustainable value for all stakeholders while continuing on the growth path. In conclusion, I would like to thank all the shareholders, investors, employees, suppliers, customers, bankers for supporting AKR on its journey towards a bright future. For and on behalf of the AKR Board of Directors Mr Haryanto Adikoesoemo President Director |
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