The Board of Commissioners appreciates the strategic steps taken by the Board of Directors throughout 2022 in dealing with global economy dynamics, and in optimizing the potential of distribution business and industrial estate. The Board of Commissioners also fully encourages the establishment of ESG Committee in order to ensure the Company’s sustainability strategy implementation.
Dear Shareholders and Stakeholders,
Gratitude to the Almighty for His abundant blessings and grace, which enabled PT AKR Corporindo Tbk (AKRA) to navigate 2023 with remarkable results.
The Board of Commissioners has fulfilled its oversight duties and responsibilities, providing guidance to the Board of Directors to ensure that AKR is managed in accordance with the established business plan, and within the framework of Good Corporate Governance. The Board of Commissioners encourages the enhancement of corporate governance practices, risk anticipation, and mitigation, as well as the adoption of healthy business practices that benefit the Company.
In the environment of the declining prices of crude oil and other commodities, the Board of Commissioners has evaluated that AKR’s resilience in 2023 was excellent, indicating the solidity of AKR’s business model and strong implementation, resulting in the Company’s profitability continuing with double-digit growth. The Board of Commissioners appreciates the performance of the Board of Directors in managing the Company throughout 2023, especially in the JIIPE Industrial Estate business where the Company successfully recorded land sales of 91 hectares, an increase from the target of 75 hectares.
Based on the implementation of the established strategy and the performance results, the Company was able to achieve a commendable financial performance with significant improvements in various aspects. Net profit grew by 16% year on year from Rp2,403 billion in 2022 to Rp2,780 billion with a 31% CAGR over the last five years. Total assets increased from Rp27,188 billion in 2022 to Rp30,255 billion. This increase in profit also resulted in a significant increase in ROA to 9.2% and ROE to 24.7%.
The Board of Commissioners realizes that embarking on new businesses is not without its challenges. Therefore, maturity in research and planning are crucial factors determining the success of these businesses, especially amidst global uncertainty and the transition of government leadership in Indonesia.
The Board of Commissioners provides guidance to study risks and opportunities holistically regarding decisions made so that a reasonable risk profile ensures opportunities remain within the Company’s strategic corridor. The Board of Commissioners hopes that the positive performance achieved throughout 2023 becomes a foundation for AKR to continually improve standards and welcome new growth.
The Board of Commissioners has evaluated that the Audit Committee performed its duties and responsibilities well. The appointment of Public Accountant Firms and the evaluation results have been conducted in accordance with the latest regulations, namely POJK Number 9 of 2023 regarding the Use of Public Accountant and Public Accountant Firms’ Services in Financial Service Activities. The Audit Committee also assisted the Board of Commissioners in conducting internal audits and provided evaluation reports on the provision of audit services for the 2023 Financial Statements with a summary of 10 (ten) meetings.
The Nomination and Remuneration Committee reviews and proposes succession planning for members of the Board of Directors and the Board of Commissioners, and performed its duties well in 2023. The Nomination and Remuneration Committee provided adequate recommendations based on the reviews conducted with a summary of 4 (four) meetings.
The Board of Commissioners has observed that implementation of corporate governance has continued to increase, as seen from various awards received, comprehensive governance structures, and recommendations followed up by the Company. In order to meet best practices in implementing governance, AKR continues to make improvements and refinements in both structure, processes, and mechanisms.
AKR’s responsive steps in following up on recommendations and improving governance are reflected in the implementation of the Code of Ethics and Integrity Pact socialization, where a total of 1,654 employees signed the Integrity Pact, followed by all central and branch employees of AKR.
The Board of Commissioners considers it important to build awareness among personnel regarding the application of corporate governance, so therefore provides guidance to the Board of Directors to continue strengthening the commitment through socialization, education, and training. The Board of Commissioners also encourages the integration of corporate governance as part of the culture and essence in operational activities, including interactions with external parties.
The Board of Commissioners recognizes that, amidst issues of economic slowdown and ongoing geopolitical pressures, the prospects for the industry and logistics & supply chain sectors in Indonesia will continue to grow. This is confirmed by government support for improving infrastructure quality to enhance industry competitiveness and attract investment. The development of downstream programs continues to show growth from year to year, driving industrial growth in Eastern Indonesia. Therefore, the availability of a logistics infrastructure is crucial, considering Indonesia is an archipelagic country with high logistic challenges that need to be addressed promptly.
In facing challenges, AKR consistently applies a disciplined business model and develops infrastructure capabilities, preparing for additional logistics capacity of ships and port tank terminals to serve the distribution of petroleum and industrial chemicals in new areas. The Board of Commissioners believes that logistics infrastructure is the foundation of a trading and distribution businesses. Therefore, AKR must always prioritize innovations that support asset optimization and efficiency improvement through control towers and the development of artificial intelligence for asset monitoring in distribution activities.
In the trend of downstream developments, AKR has positioned itself as an aggregator, facilitating developments in related sectors. With its status as a Special Economic Zone (SEZ), JIIPE provides fiscal and non-fiscal advantages for various industries within the area. Industrial utility needs are crucial to improve competitiveness and are expected to provide stable and sustainable income for the Company.
The Board of Commissioners believes that to maintain consistent growth in the future, AKR must be able to develop according to future market needs supported by innovations that align with industry dynamics. In addition to developing the business-to-business segment, expanding the retail petroleum market needs to continue to prepare for the growth of the premium quality petroleum market. Several initiatives with cleaner energy markets in the transition period also need to be carefully considered to be executed with adequate profitability results, and a healthy financial performance.