Analyst Meeting Update on AKRA Q Performance

Transcription

1 Analyst Meeting Update on AKRA Q Performance April 28,2016 1

2 Agenda 1 BUSINESS SEGMENTS 2 BUSINESS UPDATE 3 FINANCIAL PERFORMANCE 4 Q&A 2

3 Integrated segments across supply chain & logistic services... PETROLEUM DISTRIBUTION Largest national private distributor of petroleum products to industrial customers in Indonesia Entry into Retail distribution : 129 petrol stations BASIC CHEMICALS DISTRIBUTION Over 50 yrs in Basic chemical distribution Main products are caustic soda,soda ash, methanol,pvc, hydrochloric acid Commision based business model Long term relationship with its principals LOGISTIC SERVICES JIIPE MANUFACTURING Extensive supply chain network in Indonesia & China which includes Independent Petroleum Storage Terminal Port handling Transportation Warehousing Vendor managed inventory ~2200 Ha of industrial and port estate Deep water port Complete energy and logistic solution Products includes Adhesives Sorbitol 3

4 Agenda 1 BUSINESS SEGMENTS 2 BUSINESS UPDATE 3 FINANCIAL PERFORMANCE 4 Q&A 4

5 Momentum picks up in Indonesian economy Economic growth picking up Reducing Inflation Indonesia GDP % % 4.3% Indonesia Inflation % 6.4% 6.4% 6.4% 4.3% (B) Focus on Infrastructure Indonesian Government Spending on Infrastructure (Rp trillion) Stable currency 14,657 11,253 11,860 12,185 12,440 13,084 13,332 13,795 13,276 USD IDR Exchange Rate Source : (B) Closing rate 5

6 In the midst of weak commodity cycle Coal production and consumption has weakened due to lower economic activity Indonesian oil and gas demand is still growing or stable due to demographic growth Source : 6

7 Financial Performance Summary Revenue (Rp.b) 4,731 4,801 3,572 Q4'15 Q1'15 Q1'16 Decline by 26% due to drop in oil price in excess of 30% whereas volumes grew by 8% 188 Net Income (Rp.b) Q4'15 Q1'15 Q1'16 Q1 15 recorded contribution from sale of industrial land ( approx.rp.30b) EBITDA (Rp.b) Gross Margin (%) Healthy EBITDA margins of 11.6% Vs. 9.6% last year 12.2% 12.2% 12.4% Gross margins maintained in excess of 12% consistently Q4'15 Q1'15 Q1'16 Q4'15 Q1'15 Q1'16 7

8 PETROLEUM 8

9 Petroleum Industry update Performance Initiatives Crude oil ($/bbl) Low Oil price environment Significant decline in prices of Refined products Source : Wood Mackenzie,company sources 9

10 Petroleum Industry update Performance Initiatives Volumes (KL) Q Vs Q Revenue (Rp b) 4,801 3,572 6,639 ASP (Rp/L) 4,375 Q1'15 Q1'16 Q1'15 Q1'16 Q1'15 Q1'16 Keyhighlights Increase in volumes from power whereas volumes with mining segment were stable Potential for growth from Fisheries segment. Gross Profit in Rp.b ( Trading&distribution) Margins improved on implementation of Efficiency & Cost management measures Effective Risk management measures enabled us to pass on significant price movement Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 10

11 Petroleum Industry update Performance Initiatives Market segments Coal Mining Industry 30% Non-Coal Mining (incl. Gold mining, nickel etc) 18% Retail Distribution 12% General Market (including Power 15% industrial) 25% Focus on increasing sales volume to existing segments such as Power and Mining. Grow volumes in new segments such as fisheries, bunkers and logistics Increase supplies in Eastern Indonesia Operational excellence Improve throughputs at tank terminals Improve controls in entire supply chain network Leverage on economies of scale 11

12 Petroleum Industry update Performance Initiatives New Terminals & Expansion of Existing Terminals in 2015 New Terminals Bitung 30,500 KL Palaran 15,000 KL Medan 15,000 KL Existing Terminals Pontianak 19,500 KL Banjarmasin 10,000 KL Increased overall storage capacity of AKR to 656,000 KL Total Investment Rp billion Energy Minister at inauguration ceremony Rationale behind Expansion Serve Eastern Indonesia Markets in line with government focus on promoting economic growth to islands outside Java This market holds significant growth potentials Growth in Fisheries Segment Newly inaugurated Bitung Storage Terminal 12

13 Petroleum Industry update Performance Initiatives 1. Reduced State budget Fuel Subsidy (Rp trillion) (B) Deregulation in the Retail segment 2. Larger Addressable Market Subsidised Non subsidised Oil consumption in Indonesia In mkl 3. Changing consumer preferences 4. Growing demand Source : Wood Mackenzie 13

14 Petroleum Industry update Performance Initiatives AKR extending scope from B B to B C Launched AKRA 92 Tuban, East Java New Products Lempasing, Lampung 14

15 Sustainable Margins through End to End Supply chain solutions AKR is able to maintain sustainable and superior trading & distribution margins as it provide end to end supply chain solutions to its customers Distribution Logistics Value Added Solutions Capturing Value across the Supply Chain in Trading & distribution business 15

16 CHEMICALS 16

17 Chemicals Industry update Performance Initiatives Commision products Trading products Products sold include: Caustic Soda Liquid PVC resin Hydochloric Acid Sodium Hypochloride Industries served include textile, pulp and paper, fertilizer, pharmaceutical, chemical, plywood, food, consumer goods etc Growth is general in line with Indonesia s GDP growth Products sold include: Caustic Soda Flakes Soda Ash Sodium Sulphate Sulphuric Acid Methanol Glue Industries served include textile, pulp and paper, soap, glass, pipes,cement, plywood, consumer goods etc Asahimas Chemicals Solvay USA 17

18 Chemicals Industry update Performance Initiatives Industry updates Expansion of Asahimas with new factory in Cilegon,Banten Capacity for Caustic soda to increase from 500,000 MT to 700,000 MT and PVC from 300,000 MT to 550,000 MT Expansion of some of textile majors Competition from China on products such as Soda ash, Sodium sulphate. AKRA Initiatives Increase volumes thru participation in principals expansion Explore new products such as sulphuric acid and others to diversify portfolio Gain market share by supplying to major customers in textile industry which are expanding this year. Growth expected in consumption of Basic chemicals as infrastructure spending picks up in H

19 Chemicals Industry update Performance Initiatives Volumes (KL) % Q Vs Q Revenue (Rp b) % ASP (Rp/L) 2,758 2,740-2% Q1'15 Q1'16 Q1'15 Q1'16 Q1'15 Q1'16 Key highlights Volumes have been slightly lower than Q1 16 but higher than Q4 15 and Q3 15. The volumes in Q4 15 and Q3 15 were 302 K Mt and 310 K Mt respectively ASP has slightly started reducing in Q1 16 after a significant upward trend seen in second half of previous year due to tough competition from china Margins have been maintained at historical levels and no deviation expected from full year target 19

20 LOGISTICS SEGMENT 20

21 Logistics Industry update Performance Initiatives 1. Jakarta Tank Terminal (JTT) 2. Port handling at Tanjung Perak Capacity utilization nearing 100% since Q Volumes in Q1 16 increased by 14% compared to Q1 15 Plan to expand from 250,000 KL to 450,000 KL to be completed by General and bulk cargo witnessed a slowdown in Q3 and Q but the volumes have rebound in Q

22 Logistics Industry update Performance Initiatives 3. Port Handling in China 4. Port handling at JIIPE (BMS) China port operations have seen significant slow down in bulk cargo due to weak commodity activities Continue to sustain operations with stable container volumes and through substitution with other products BMS Port commenced operations on 29 jan The next stage of development at the port will involve installation of equipments. 22

23 Logistics Industry update Performance Initiatives Revenue (Rp b) % Q Vs Q ,28 9 Volumes (KL) 1,047, 855 Q1'15 Q1'16 Q1'15 Q1'16 Continue to develop new tank terminals at strategic locations and expand existing ones. Expand BMS port in phases Offer value added solutions to our petroleum and chemical customers Segment Strategy Indonesia Tank storage ('K KL)

24 Manufacturing Industry update Performance Initiatives INDONESIAN OPERATIONS The Volumes declined by 5% in Q1 16 due to general economic slowdown in wood products industry. Strategy is to gain volumes with new customers which are looking to capitalize on growth in real estate segment, export market and infra development CHINA OPERATIONS Sorbitol volumes declined due to lower consumer demand. Situation on raw material prices and other input cost have improved allowing the margins to sustain. Strategy is to gain volumes by regaining market share and exploring new market segments. 24

25 JIIPE 25

26 JIIPE Industry update Initiatives 15 New Industrial estates in Indonesia Fiscal incentive stipulated in the new Government regulation No 142/2015 on industrial zones which came into effect on 28 th December, which set to provide tax incentives for industrial zones in the form of tax holidays and allowances Source: National Economic Planning Agency (BAPPENAS)

27 JIIPE Industry update Initiatives ONE STOP LOGISTIC & ENERGY SOLUTION... UTILITIES Un-interrupted power supply from coal and gas Fresh water and Sea water Waste water treatment Gas and LNG Intermodal transport PT BERKAH KAWASAN MANYAR SEJAHTERA (BKMS) Integration with port & residential estate Accesability from sea, road, rail and air Strategic location in east java Kawasan Logistic Berikat (Bonded Warehouse) INDUSTRIAL ESTATE RESIDENTIAL ESTATE* PORT ESTATE PT BERLIAN MANYAR SEJAHTERA (BMS) Deep water port, draft~16m ~6500m of jetty Dedicated Energy, Container and Bulk terminals Operated by Pelindo III * Will be implemented by unlisted affliate of AKR 27

28 JIIPE Industry update Initiatives JIIPE Staging Plan 28

29 JIIPE Industry update Initiatives 29

30 JIIPE Industry update Initiatives 30

31 JIIPE Industry update Initiatives KLIK Scheme Latest Government Incentive President Jokowi during the signing ceremony at State Place JIIPE has been selected as one of 15 industrial estates in the country approved by the Government under this newly established KLIK scheme. This scheme was initiated by Indonesian Investment Coordinating Board (BKPM) and aimed to incentivize and spearhead the process of further promotion of industries in Indonesia. Under this new scheme, industrial estate tenants are able to obtain their permit in only 3 hours and able to commence construction as soon as their permit have been approved. There are no minimum requirements in terms of capital investment as well as number of workers to be employed making JIIPE as an attractive investment destination. JIIPE is the only industrial estate that meets the selection criteria due to various considerations which have been taken into account including legal, environmental, land availability and infrastructure. The scheme was signed on Monday 22 nd February 2016 by BKPM Chief Mr. Franky Sibarani and inaugurated by President Joko Widodo at State Place. 31

32 JIIPE Industry update Initiatives Bonded Logistics Warehouse Bonded Logistics Centre is a new initiative introduced by BKPM aimed at reducing logistics cost Bonded Logistics Centre is a multi-functional logistics warehouse which are exempted from import tax and duty. It is hoped that this new initiative will further promote Foreign Direct Investment ( FDI ) JIIPE will provide such facility within its industrial estate in order to support BKPM efforts in promoting industrial estate in Indonesia in becoming the preferred investment destination. JIIPE is also one of the 14 industrial estates in Indonesia which have been approved by the government under this recently established KLIK scheme aims to incentivize and spearhead further promotion of industries in Indonesia. The benefits of this BKPM backed incentive scheme includes lesser processing time for investment permit (only 3 hours) and tenants able to commence construction as soon as their permit has been approved. Source: National Economic Planning Agency (BAPPENAS)

33 JIIPE Industry update Initiatives Progress of Power Plant (Stage 1) 23MW Gas Fired 500 MW GAS COD Q MW COAL COD Q MW GAS COD Q JIIPE Power Plant 33

34 Strategies to achieve sustainable growth during Grow volumes ( 10% - 12% p.a.) with existing customers through efficient logistic & supply chain solutions. Expand in Retail Petroleum segment and grow in fast deregulating downstream sector Operational efficiency to maintain margins Effective Risk management on product pricing, forex and capital cost Working capital & cash flow management Execution of JIIPE and utilities for sustainable recurring income Sustainable growth of 15% - 20% CAGR 34

35 Agenda 1 BUSINESS SEGMENTS 2 BUSINESS UPDATE 3 FINANCIAL PERFORMANCE 4 Q&A 35

36 Strong performance during 2015 NET PROFIT Rp.1,034b 28% YOY GROSS PROFIT Rp.2,216b 28% YOY MARKET CAP~Rp.27,438b 74% YOY 1 Growth 2 Margin 3 Strong cashflow 4 Low debt NET PROFIT in Rp.b 1, % 7.7 % Gross Margin 11.2 % 1,02 0 1,37 3 EBITDA in Rp.b 1, Net gearing Annual Report Award Top 50 companies in Indonesia Award by Indonesian instituteof Corporate directorship Constituent of MSCI Global index/ LQ 45/Bisnis 27/Kompas Consistent payout 38.7 % 39.0 % 38.7 %

37 Continued in Q Financial Performance Summary Revenue (Rp.b) 4,731 4,801 3,572 Q4'15 Q1'15 Q1'16 Decline by 26% due to drop in oil price in excess of 30% whereas volumes grew by 8% 188 Net Income (Rp.b) Q4'15 Q1'15 Q1'16 Q1 15 recorded contribution from sale of industrial land ( approx.rp.30b) EBITDA (Rp.b) Gross Margin (%) Healthy EBITDA margins of 11.6% Vs. 9.6% last year 12.2% 12.2% 12.4% Gross margins maintained in excess of 12% consistently Q4'15 Q1'15 Q1'16 Q4'15 Q1'15 Q1'16 37

38 Unaudited 3M financial statement : 31 st March

39 Revenue by Segment (In Million Rp) Revenue 3M16 3M15 Petroleum 2,382,174 3,347,851 Chemical 855, ,726 Logistics 183, ,586 Manufacturing & others 150, ,194 BKMS - 94,010 Total 3,572,467 4,801,368 Revenue by segment - 3M16 Logistics 5% Manufacturing & others 4% BKMS 0% Revenue by segment 3M15 Logistics 4% Manufacturin g & others 5% BKMS 2% Chemical 24% Petroleum 67% Chemical 19% Petroleum 70% 39

40 Gross profit by Segment (In Million Rp) Gross Profit 3M16 GM% 3M15 GM% Trading & distribution 382, % 447, % Logistics 28, % 40, % Manufacturing & others 31, % 44, % BKMS - 51, % Total 442, % 583, % Logistics 7% Gross Profit by segment - 3M16 Manufacturin g & others 7% Trading & distribution 86% BKMS 0% Logistics 7% Gross Profit by segment - 3M15 Manufacturin g & others 7% BKMS 9% Trading & distribution 77% 40

41 Sustainable growth in Volumes 438, , , , , , , , ,539 Petroleum Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 336, , , , , , , , ,206 Chemicals Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 41

42 Controlled Operating expense 42

43 Balance sheet Description 3M (%) Cash 751,384 1,289, % Trade Receivables 2,643,508 3,049, % Inventories 768, , % Industrial Estate Under Dev. 1,745,425 1,621, % Other Current Asset 425, , % Total Current Asset 6,334,407 7,285, % Investment 427, , % Net Fixed Assets 4,372,048 4,469, % Industrial Estate For Dev. 1,491,488 1,395, % Other Non Current Asset 1,930,960 1,628, % Total Non Current Asset 8,221,737 7,917, % Description 3M (%) Short Term Bank Loan 842, , % Trade Payable 2,354,363 3,433, % Current Maturities of LT Loan 289, , % Other Current Liabilities 596, , % Total Current Liabilities 4,081,686 4,871, % Long Term Bank Loan 1,327,459 1,417, % Bonds 1,493,111 1,492, % Other Non Current Liabilities 156, , % Total Non Current Liabilities 2,977,565 3,045, % Equity 6,304,185 6,090, % Minority Interest 1,192,707 1,195, % Total Equity 7,496,893 7,286, % Total Assets 14,556,143 15,203, % Total Liabilities & Equity 14,556,143 15,203, % 43

44 Balance Sheet Trends Total Assets (Rp.b) Total Debt (Rp.b) Equity (Rp.b) 44

45 Cash Flow statement ( In Billion IDR) 3M16 3M15 (%) Receipts from customers 4,035 6, % Payment to suppliers & opex (4,196) (5,509) -23.8% Operating cash flow (162) % Land acquisition & development related (210) (253) -17.2% Interest income % Interest expense (28) (58) -52.4% Taxes 19 (37) % Net cash flow from operating activities (361) % Capex net of residual sales (404) (67) 503.5% Investment in associates (3) - Investment by Minority - - Others (1) - Net cash flow from investing activities (407) (67) 508.4% Short term loans net of repayment % Long term loans net of repayment (87) (282) -69.3% Contribution from MSOP and non-control % Net cash flow from financing activities % Effect of forex changes 106 (84) % Net change in cash (538) % Beginning cash balance 1, % Ending cash balance 751 1, % 45

46 Working capital Receivable days Payable days Inventory days 'Dec'15 31'Mar'16 31'Dec'15 31'Mar'16 31'Dec'15 31'Mar'16 Net Gearing Receivable days increased in line with the decrease in payable days Net gearing was still maintained at below 0.5 6M'14 9M'14 12M'14 3M'15 6M'15 9M'15 12M'15 3M'16 46

47 Ratios UOM 3M Profitability Gross margin % 12.39% 11.21% Operating margin % 9.19% 6.83% Net margin % 7.14% 5.23% Balance Sheet Ratios * Return On Asset % 7.01% 6.80% Return On Equity % 16.47% 18.00% Total asset turnover x Receivable period days Inventory period days Payable period days Leverage Current ratio x Asset / equity x Net gearing x * annualised 47

48 Exchange rate appreciation during Q Forex gain resulted in Q1 16 due to : COGS booking : Precal rate ranging from 14,000 Rp./$ - 13,500 Rp./L Settlement of LC at lower rates as rupiah appreciated Restatement of Payables as exchange rate on reporting date was Rp.13276/$ 48

49 Agenda 1 BUSINESS SEGMENTS 2 BUSINESS UPDATE 3 FINANCIAL PERFORMANCE 4 Q&A 49

50 THANK YOU PT AKR Corporindo Tbk Wisma AKR Lantai 8 Jl. Panjang No. 5 Kebon Jeruk Jakarta Barat Indonesia ir@akr.co.id Investor Relation Contacts These materials have been prepared by PT AKR Corporindo Tbk (the Company ) and have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. The Company or any of its affiliates, advisers or representatives accept no liability whatsoever for any loss howsover arising from any information presentated or contained in these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice. 50

51 Appendix 51

52 Overview of Indonesia s Petroleum Sector : Increasing consumption production not keeping pace Indonesian Oil reserves In 000 million bbl Indonesian refinery capacity In 000 bbl/day Indonesian Crude production & Oil products consumption In 000 bbl/day Source : BP Statistical review of World energy 2014 Production Consumption 52