In the midst of economic challenges and geopolitical crises, the Board of Directors remains fully committed to provide value to all stakeholders by being disciplined in implementing business model and being prudent in finance management while also maintaining sustainability. The year of 2022 is a testament of the Company’s business resilience and success in delivering consistent and sustainable performance.
Dear respected Shareholders and Stakeholders We give thanks to Almighty God for his grace and blessings that enabled PT AKR Corporindo Tbk management to once again deliver an excellent performance. Despite the challenging economic conditions, the Company recorded a solid performance and delivered sustainable growth. Once again, this reflects the resillience of the Company’s business model during the many economic dynamics.
The global economy has passed through several dynamic
situations since the Covid 19 pandemic. In 2022, global
economic growth continued to slow down, triggered by the
Russia – Ukraine conflict that started at the beginning of
the year, altering expectations of research and financial
institutions globally. One of the main impacts of the
Russia-Ukraine conflict was energy scarcity, especially
oil and gas, so prices surged in early to mid-2022 and led
to increasing global inflation.
Despite these conditions, the Indonesian economy
demonstrated solid growth reaching 5.3% in 2022.
Indonesia’s economic growth was mainly driven by domestic
consumption and excellent export performance. Indonesia’s
trade balance in 2022 recorded a significant surplus of
USD54.46 billion, the highest ever recorded.
However, the domestic inflation rate jumped significantly to
5.5% from 1.9% in 2021. An increase in VAT, and an increase in
subsidized fuel prices were factors that pushed up inflation.
In response to this, Bank Indonesia adopted a policy to
gradually increase the benchmark interest rate, the BI 7 Days
Repo Rate, to 5.5% by the end of 2022. This policy resulted
in a slowdown in lending at the end of 2022.
Despite these dynamics, the company fully commited in
providing value to all stakeholders with discipline and
prudent manner in conducting business model and financial
management.
The company believes necessary challenges will lead to great opportunities. As an end-to-end supply chain logistics company that facilitates trade and commerce through its infrastructure and intensive marketing, AKR’s position is critical during supply chain disruptions. The fluctuations in oil prices during the year were well managed due to AKR’s business model, where prices are passed on to customers. The Company’s working capital and net open position were also well maintained, so they could generate a positive financial performance.
The company has established strong relationships with local and international suppliers, securing deliverables of fuel and chemical products to customers, even during supply shortages that occurred in the first half of 2022. Furthermore, through improvement of information technology platform, AKR can monitor its inventory positions in real-time manner, enabling the company to distribute products to customers on time and on demand
In the retail fuel business, the Company continued to expand the number of bp AKR stations improving the economic level. By the end of 2022, there were 120 AKR retail stations spread across Java, Sumatra, and Kalimantan areas and 36 bp AKR stations around Greater Jakarta, Surabaya, Gresik, Malang, and toll road rest areas. In 2022, bp AKR also added high octane premium fuel – The Ultimate, which has the ability to clean the vehicle’s combustion chamber to make them more efficient.
In the industrial estate segment, the Company continued to
promote JIIPE as a world-class integrated industrial estate
that provides several benefits to the industry. By being
designated as a Special Economic Zone (SEZ), the Companies
in JIIPE Gresik SEZ can take advantage of the fiscal and nonfiscal facilities. JIIPE Gresik SEZ is championing industrial
growth and supporting downstream programs in Indonesia.
The Company recorded a very encouraging performance in 2022, and exceeded management’s expectations, which necessitated revision of the initial budget. The Company realized a 2022 net profit of Rp2,403 billion higher than revised budget, an increase of 116% above the 2021 net profit of Rp1,112 billion.
The 2022 revenue growth that reached Rp47,540 billion, was driven by strong performances across all AKR business segments. Trading and distribution revenue grew 89% yoy to Rp44,698 biillion, due to volume growth and higher average selling prices. In this segment, the Company recorded a gross profit growth of 86% to reach Rp3,444 billion. The logistics and manufacturing segment also recorded double-digit revenue growth of 16% to reach Rp1,693 billion.
The Company’s performance was also accelerated by land sales in the JIIPE industrial estate segment where in 2022 land sales recorded 44.5 hectares, exceeding the 2022 target of 40 hectares, and higher than land sales in 2021 of 14 hectares. The increase in revenue contribution from the industrial estate is a sign of the Company’s success in monetizing its long-term investments in JIIPE. With additional revenue of Rp172 billion from land leases for smelter projects in the JIIPE Industrial Estate, and Rp47 billion in revenue from utilities, the JIIPE industrial estate total sales amounted to Rp1,149 billion in 2022. Gross profit from the industrial estate in 2022 also increased by 65% yoy to Rp543 billion.
AKR consistently generated strong cash flow in 2022 with
an EBITDA of Rp3,539 billion, so with good working capital
management the Company could reduce overall loans. In
2022, the Company’s assets grew by 16% to Rp27,188 billion,
and equity increased to Rp13,155 billion from Rp11,299 billion
in 2021. The Company’s return on assets (ROA) and return on
equity (ROE) also increased to 8.8% and 21.9% respectively,
indicating that the Company’s ability to generate profits
is improving. The Company is now in a net cash position
and has received a rating upgrade from a leading rating
agency, PEFINDO Indonesia, who upgraded the Corporate
and Corporate Bonds ratings to id AA with a stable outlook.
The IMF predicts the global economy will slow down to 2.9% in 2023. The continuing geopolitical conflict between Russia and Ukraine, high inflation, and the increasing of interest rate will be challenges for the global economy in 2023.
In response to these conditions, the Company will remain focused on carrying out its business development in line with the business model followed by the Company to date. With the improving economic conditions, the Company has seen a positive signal that there will be an increase in demand from customers in 2023.
The Company sees opportunities from the Government’s initiative to promote downstream and industrialization. The mineral downstream program in Indonesia opens up massive opportunities for the fuel and basic chemicals segment, The Company will supply products needed by metal processing and refining facilities.
The Company will optimize its JIIPE Gresik SEZ marketing as it brings many advantages to encourage the creation of an effective and efficient downstream ecosystem. JIIPE with its status as a SEZ also offers many advantages for tenants in terms of efficiency in logistics and utility costs, and the fiscal and non-fiscal incentives provided.
The largest single-track copper smelter project in Indonesia
built at JIIPE will attract industries related to copper products
and their derivatives and will become part of the industrial
processing ecosystem, including opening up industrial development opportunities related to clean energy and
electric vehicles.
The Company is increasingly paying more attention to the ESG aspects as a commitment to sustainable business performance in the long term. In 2022, The Company established an ESG Committee chaired by the Company’s Independent Commissioner and President Director, who are tasked with formulating a sustainability strategy, program plans, policies, and a roadmap for the Company’s sustainability. The Company has also established an ESG Task Force in each business segment so that the implementation of ESG aspects can be delivered.
In the environmental aspect, the Company made several improvements to the existing environmental standards at AKR’s operational terminals and branches, based on PROPER. We are preparing our compliance with this standard by conducting workshops for representatives of each terminal and branch, as well as renewing the required experts’ certifications. 13 of our operational areas have received Blue PROPER certification including the Bali, Ciwandan, Tanjung Emas Semarang, Nilam Timur, Nilam Utara, Pontianak, Stagen, Banjarmasin, Palaran, Bitung, Medan Gabion, AKR Lampung terminals, and the Jakarta Tank Terminal.
The Company is also continuing its participation in the national energy transition journey, and pays close attention to environmental and energy management through the following initiatives: 1. Increasing efficiency by using a digital system to track product and fleet locations, product conditions in terms of quantity, temperature, and other aspects. This will enables the Company to be more efficient in its energy use. 2. Complying with Indonesian Government’s biodiesel policy as a cleaner energy transition in its distribution, and exploring initiatives to procure cleaner energy 3. Developing JIIPE Gresik SEZ as a green industrial area by providing international standard facilities and benefits needed by industries in the estate, including electricity from Gas and solar panels, water management by zero water run off, SHE management based on ISO standards, and also ease of doing business with one-stop licensing.
We continue the Company’s operational excellence with six zero targets as part of our efforts in mitigating the environmental impact of our operational activities. In addition, the Information technology being used to monitor the movement of the Company’s truck fleet has helped to improve truck utilities, and reduce emissions by 41%. JIIPE Gresik SEZ has also added roof top solar panels to provide renewable energy, and with the consumption of biodiesel and electricity from solar panels, the Company consumed 30,914 Gigajoules of energy from renewable energy sources. In total, the Company recorded stable carbon emissions compared to the previous year. By improving the Company’s financial performance, and the efforts to maintain energy consumption, emission intensity decreased to 0.02 ton CO2/ Rp Gross Profit, from 0.036 ton CO2/Rp Gross Profit.
In the social aspect, the Company continues to carry out corporate social responsibility (CSR) programs with a focus on three main areas, education, health, and community development. These include providing education assistance such as scholarships, repairing school buildings, improving public health through free medical treatment and health education programs, and also monitoring employee health and wellbeing
AKR continues to encourage all of its subsidiaries to play an active role by contributing to the progress of the surrounding communities in the areas where they operate, through community development programs and creating job opportunities for the local communities. AKR’s CSR funds in 2022 reached Rp22.9 billion for education, health, social, environmental, religious, and public facilities and infrastructure improvement programs.
AKR continues to encourage all of its subsidiaries to play an active role by contributing to the progress of the surrounding communities in the areas where they operate, through community development programs and creating job opportunities for the local communities. AKR’s CSR funds in 2022 reached Rp22.9 billion for education, health, social, environmental, religious, and public facilities and infrastructure improvement programs.
The Company also pays great attention to the sports sector. The Company wants to contribute to advancing the world of national sports, one way by providing support for the sport of Wushu. To increase employees’ awareness and knowledge of ESG aspects in the future, the Company organized crossdepartmental workshops facilitated by the Corporate Secretary. These workshops were carried out based on the focus each ESG taskforce was given by the ESG Committee.
The Company’s ESG performance is increasingly showing
good improvements. The Company’s risk score based on
Sustainalytics decreased from 26.7 in 2021 to 25.6 in 2022
where a lower score indicates a lower ESG risk. This result
brought the Company into the main ESG indices on the stock
exchange, and it is now recognized as one of the ESG star
listed companies.
The Company also continuously delivers the best value to
all its shareholders. The Company consistently distributes
dividends to shareholders every year with a payout
ratio of above 30%. In 2022, based on an Annual GMS
Resolution dated April 28, 2022, the Company distributed
cash dividends of Rp572,377,918,400.00, or 51.5% of the
Profit for the Year Attributable to Equity Holders of the
Parent Entity.In addition, with the approval of the EGMS held on January
14, 2022 the Company carried out a 1:5 stock split initiative
to expand the Company’s retail investor base. This corporate
action received a good response from the capital market,
and the number of AKRA investors increased by 35% as of
December 31, 2022.
In 2022, the
Company’s Board of Directors composition did not change, and remained as
follows:
President Director :
Haryanto Adikoesoemo
Director : Jimmy Tandyo
Director : Bambang
Soetiono Soedijanto
Director : Mery Sofi
Director : Suresh Vembu
Director : Nery Polim
Director : Termurti Tiban
The Board of Directors would like to express its highest appreciation to our customers for their trust, loyalty and support, which supported the Company in delivering a very proud performance in 2022. The Board of Directors would also like to thank our employees who have worked hard in the face of the dynamic conditions of 2022.
The Board of Directors would also like to express its thanks the Board of Commissioners for their support and guidance, which greatly assisted management in achieving our targets. We would also like to thank all our stakeholders, including OJK and the Indonesia Stock Exchange.
Finally, the Board of Directors is committed to always
providing sustainable value and upholding the rights of its
shareholders and stakeholders, in line with the Company’s
values and GCG principles.