AKRA and Reconstitution of LQ45 Index

JAKARTA, 28 January 2022 – PT AKR Corporindo Tbk (IDX ticker code: AKRA.IJ) has received inquiries from investors and analysts regarding the reconstitution of LQ45 Index for the period Feb-July 22.  AKRA, which is constituent stock since January 2012 in the LQ45 Index will not be part of the LQ45 index for the coming period as per the public notification published by the IDX. 

We would like issue the following clarification as per our understanding: 

1. LQ45 index measures the stock price performance of Top 45 stocks which we are given to understand is based on periodic review of the companies based on market capitalization, volume, and frequency of trading and not the least good fundamentals.
2. AKR Management assumes that ranking and non-inclusion of AKRA in the next period for LQ45 could be due to the frequency, volume of trade in the stock; We firmly believe that AKRA business fundamentals remain robust, and the Company has delivered sustainable growth in the profits and maintains strong financial position with low gearing, adequate cash balance and asset base with adequate liquidity; and to expand greater participation of retail investors, the Company has conducted  stock split with a ratio of 1:5 to increase the number of shares and also make the share price more attractive to retail investors, especially Millennials; stock split has taken effect from 12 January 2022.
3. AKRA during the past 2 financial years (2020, 2021) has delivered double digit growth in profits despite the global Pandemic has caused significant disruptions and significant downturn in economic growth as per preliminary estimates AKRA revenue and profit growth is expected to be in high teens and we have a strong cash flow and good performance in all the business divisions.
4. The Company’s Corporate governance is well recognized, and the Company has implemented good ESG practices.  AKRA is getting continued appreciation with induction to main ESG Indices: 1) IDX KEHATI & Quality 45 IDX KEHATI Index, 2) SRI KEHATI Index, 3) Constituent of ESG Leaders Index since Dec 2020, 4) IDX and OJK (Financial Services Authority) have showcased AKRA as one of seven ESG Star Listed Companies, 5) Meanwhile, our ESG scores are showing steady improved by various international rating agencies like Sustainalytics and ISS.
5. We remain confident of maintaining similar growth levels in 2022.   This is based on 1) Higher demand for basic chemicals and Energy driven by higher GDP growth, 2) demand of chemicals and energy from smelters as Indonesia has aggressively adopted value-addition of mineral raw materials, and 3) increasing interest of potential investors in KEK JIIPE (Java Integrated Industrial and Port Estate).
   

AKR Management is always available to discuss our performance, outlook and any issue related to our business

Suresh Vembu

Director & Corporate Secretary