AKRA Update February 29 - March 6' 2020

• Strong Petroleum and Chemical Volumes in Q1 2020
• BP-AKR continues to increase MoM sales, with positive change in Regulations
• JIIPE expects to book Sales in Q1 2020

PT AKR Corporindo has enjoyed strong Q1 2020 despite prevailing concerns about impact of COVID19.  Petroleum volume averaged at more than 200k KL/month in Jan-Feb 2020 and is expected to sustain into March 2020. This will support strong growth relative to Q1 2019 (482k KL). Chemical volumes are also trending higher in Q1 2020 and expect to record 10% higher YoY.

Indonesia coal sector has been so far beneficiary of COVID19.  Coal exports to China have doubled to USD205mn in February, as per Customs data.  Meanwhile, declining oil prices are generally supportive of AKRA margins.

The BP-AKR joint venture has further boosted its volume growth, with February daily volumes up 16% (mom basis).   The new pricing formula effective from March 2020 is delivering margins that are in line with our investment plans in BP-AKR joint venture.  The previous formula was effective from Jan 2020-Feb 2020 only and had been opposed by Petroleum Distribution companies operating retail outlets.

JIIPE continues to enjoy strong investor interest, both existing and new.   We now expect to book land sales of 25 – 30ha during 2020.  These are from existing customers that are expanding their operations.  We are likely to close sale of land parcel under the MoU of 14Ha that we have signed in Dec 2019 – customer has indicated they would finalize the first parcel in Q1 2020.  

As per news report, PT Freeport Indonesia has requested extension of copper concentrate permit from Ministry of Energy and Mineral Resources (ESDM).   This is based on achieving 4.88% completion of Smelter Project, vs requirement of 4.09%.  Three positives for AKRA are; 1) reaffirms smooth progress of project in JIIPE, 2) expected leasing for Laydown area as stated construction date is August 2020 and 3) potentially higher demand for petroleum products as Export quota requested in 2020 is higher than in 2019.

Source: https://investor.id/business/freeport-ajukan-perpanjangan-izin-ekspor-konsentrat 

Change in Board of Commissioner

Ministry of State Owned Enterprise has appointed Pak Agus Martowardojo as President Commissioner of PT Bank Negara Indonesia (Persero) Tbk.  He has consequently resigned as Commissioner of PT AKR Corporindo Tbk (due to prevailing law that restricts holding of this position in one company only).

Division of Investor Relation

PT AKR Corporindo Tbk