PP London Sumatra Indonesia (LSIP) booked 9M15 revenues of Rp3.1t, down 13.5% yoy due to lower ASPs of palm products and rubber. CPO sales volume inched down 0.3% yoy to 326,154 tonnes (9M14: 327,251 tonnes), while palm kernel sales volume was up 5.9% yoy to 84,870 tonnes (9M14: 80,147 tonnes), and rubber sales volume increased 13.2% yoy to 9,521 tonnes (9M14: 8,409 tonnes). As a result of lower ASP, gross margin and operating margin contracted and resulted in a net income declined of 32.8% yoy to Rp470b. Net income accounted for 72.4% of consensus’ estimate, which is still in line.
Indofood Sukses Makmur (INDF) booked net income of Rp1.7t in 9M15 which fell 45.2% yoy from Rp3.1t in 9M14. 3Q15 net income fell 105.5% qoq from Rp861b in 2Q15 and had INDF reporting a net loss of Rp47b in 3Q15. Based on a five-year average, the company’s 9M net income usually represents 77% of its full-year net income. However, 9M15 net income fell significantly below our and market expectations, accounting for only 53% and 45.3% of our and the market’s full-year forecasts. The weak 9M15 net income was due to: a) flat sales growth of 1.5% yoy from Rp46.9t in 9M14 to Rp47.6t in 9M15, b) the increase in operating expenses which grew 6.8% yoy from Rp7.3t in 9M14 to Rp7.9t in 9M15, c) significant 165% yoy increase in financing costs from 1.1t in 9M14 to Rp3.0t in 9M15, and d) a higher net loss in associate entities which expanded 5.9x from Rp41b in 9M14 to Rp283b in 9M15.
Indofood CBP Sukses Makmur (ICBP) reported net income of Rp2.4t in 9M15 which grew by 16.3% yoy from Rp2.1t in 9M14. Its 3Q15 net income had declined by 25% qoq from Rp942b in 2Q15 to Rp706b. Given that 9M net income typically contributes to 78% of its full-year net income, the company’s 9M15 net income met our and market expectations and accounted for 77% and 79% of the respective full-year forecasts. Revenue increased by 5.8% yoy from Rp22.8t in 9M14 to Rp24.1t in 9M15. Flat growth in cost of goods sold (COGS), up by 0.07% yoy from Rp16.69t in 9M14 to Rp16.70t in 9M15, driving 9M15 gross profit up by 21.4% yoy from Rp6.1t to Rp7.4t. Despite the strong 394bp improvement in gross margin, 9M15 net income margin only improved by 92bp as: a) selling and distribution cost and G&A expenses increased by 23.2% yoy and 10.0% yoy respectively, leading to operating margin expansion of only 187bp, b) financing costs were up by 86.5% yoy from Rp161b in 9M14 to Rp301b in 9M15.
Bank Mandiri (BMRI) is providing a Rp3t loan to Pelindo IV (PT.Pelabuhan Indonesia). The company will use the funds for the construction of a new port in Makassar, modernisation of existing facilities at the old port as well as construction of other ports in East Indonesia. The new port in Makassar will be built on an area of a 45ha land that can operate 1.5m TEUs/year (twenty-foot equivalent unit containers). The funds can be disbursed in two currencies, namely rupiah (Rp1,96t and US$80m dollar). The projects are in line with the government’s efforts to develop national infrastructure and provide better interconnectivity to Indonesia’s archipelago.
Aneka Tambang (ANTM) has signed a partnership with Indonesia Asahan Aluminium (Inalum) to build and operate the smelter factory for grade alumina refinery in Mempawah of West Kalimantan. The company is still in the discussion process of selecting one new partner which will contribute heavily to technology installment in the factory. Currently the interested potential clients are from China, Russia and UEA. The JV expects the new smelter to contribute 2.0m tonnes of production capacity per year, which means the bauxite input could reach 6m wet metric tonnes. Currently Inalum runs an aluminium smelter with a capacity of 250,000 tonnes per year which will be increased to 500,000 tonnes per year up to 2020. Therefore, Inalum estimates that in the future, it will need 1m tonnes of processed aluminium. The Mempawah smelter will absorb US$1.8b investment and will be completed by end-16. The JV has secured bank loans from China Development Bank amounting to US$1.5b.
Adira Dinamika Multi Finance (ADMF) expects to exceed its loan disbursement target of Rp3,2t in 2015. Year-to-date, the company has disbursed more than Rp 2t and expects this to reach Rp3,6t in 2015. The company launches five Multiguna loan products, but the most successful is the MAXI edukasi with a 50% portion of total disbursement this year. The Multiguna loan business has been doing better than automobile loans which have been declining in the last two years.
Charoen Pokphand Indonesia (CPIN) is exploring syndicated bank loans of US$355m. The company is looking at bank loans in two currencies – the US dollar and rupiah. Several banks are involved in the transaction, including ANZ, Bank Central Asia, Bank Mandiri, CIMB Niaga, Citi and DBS. The loan duration is five years, consisting of Rp3t (US$205.2m) and US$150m. The interest rates are 150bp above LIBOR for the US$ loan and 250bp above LIBOR for the rupiah loan. Last year, CPIN obtained a syndicated bank loan of US$350m. This year, the company is investing Rp400b to expand into the beverage business. The company will construct a ready-to-drink tea (RDT) factory on a 5-6ha site in the Cikande industrial park to be completed in 2016. The factory will have a capacity of 40,000 bottles of Fiesta White Tea per hour. Currently, Fiesta White Tea is produced through toll manufacturing with a Japanese company. Management expects the Fiesta White Tea to be available in the market within one month. In the beginning, the target markets are Jakarta, West Java, Central Java and East Java. Fiesta White Tea is CPIN’s first beverage product.
Adi Sarana Armada (ASSA) expects to operate a fleet size of 17,200- 17,500 vehicles in 2015 vs 16,900 currently. The company has allocated a capex of Rp800b, of which 90% will be used to buy new vehicles. About 70% of the company’s vehicles are multi-purpose vehicles and 30% of the fleet is Avanza, Xenia and Innova. The company targets revenue to grow 20-30% yoy this year.
Astra Graphia (ASGR) targets to achieve revenue growth of 10% yoy for 2015. Early this year, the company allocated Rp250b capex for the purchase of printing machines and business document solutions. The company has injected Rp16b funds into its subsidiary Atragraphia Xprins Indonesia (AXI) to boost its information technology (IT) business. ASGR also has opened layangerak.com to secure online orders of office supplies and document outsourcing from customers.