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CPO Sector Performance at First Quarter 2010

Every quarter (three months) when the company published quarterly financial report, one of the most question which is often asked by investor is, 'In the same sector, which company has the best performance?' In this blog, I will present the comparison of some companies’ performance in Indonesia in every three months according to the newest financial report. Let’s start from one of the pledge export sectors of Indonesia: Crude Palm Oil (CPO).

Today, Indonesia has eight CPO companies enlisted in IDX. They are Astra Argo Lestari (AALI), Gozco Plantations (GZCO), PP London Sumatra ( LSIP), Sampoerna Agro ( SGRO), Sinarmas Agro Resources and Technologies (SMAR), Tunas Baru Lampung (TBLA), Bakrie Sumatra Plantations (UNSP), and BW Plantation (BWPT). Most of the companies are only ‘side job’ of conglomerate groups whose businesses are in many sectors and areas. AALI is the subsidiary of Astra Group, LSIP is the subsidiary of Salim Group, SGRO is the subsidiary of Sampoerna Group, SMAR is the subsidiary of Sinar Mas Group, TBLA is the subsidiary of Sungai Budi Group, and UNSP is the subsidiary of Bakrie Group.

Even though those companies are not 'serious' subsidiaries of each conglomerate, they have quite big assets value because CPO sector is one of the most important sectors in Indonesia, at least for the last five years. In the financial report of the first quarter 2010, averagely, their assets are around Rp5.5 trillion in average. UNSP is the biggest company whose asset is about Rp12.5 trillion, and the smallest company is BWPT with asset Rp1.6 trillion.

By the way, the asset value of UNSP at the first quarter of 2009 was actually only Rp4.8 trillion. The addition of assets from bonds issuing and the addition of capital made UNSP could replace SMAR as the biggest CPO company in Indonesia if we see from its asset. At first quarter 2010, SMAR noted its asset value at  Rp9.7 trillion, went down 5.1% from the same period in 2009 which equal to Rp10.2 trillion.

Overall, the revenue of the eight CPO companies at the period rises up 21.8% compared to the same period of 2009. The operational profit goes up 63.1%, and the net profit jumped 287.3%. The company whose noted the most significant increase in its revenue is SGRO with 93.7%, while the biggest increase of operational profit is owned by SMAR with 164.0%. In addition, the biggest increase of net profit is also SMAR with 5,947.4% or almost 60 times fold, but that was clearly because of the very small net profit in the previous year.

Some companies like GZCO, TBLA, and BWPT, in fact, have a decreasing revenue and operational profit. However, their earnings excluded the operational profit from part of an associated company, the foreign exchange gains, and the decreasing in interest payment, makes the three companies noted a significant increase of their net profit.

UNSP was the only one CPO company who noted loss about Rp130 billion at First Quarter 2009. However, at today’s period, it succeeds to gain about merely Rp64 billion as its net profit. Well, this fact of course does not enough to push up the share price of UNSP because Rp64 billion is too little in comparison with the company’ asset which was Rp12.5 trillion.

If we see from the comparison of the net profit with its asset and equity values, the SMAR who noted its net profit about Rp439 billion, was the most profitable CPO company with ROA 18.1%, and ROE 33.6%. While UNSP is the least profitable company with ROA 2.1%, and ROE 3.4%.

If we see from the increasing performance, SGRO is the most rapid company by noting the increase of revenue 93.7%, the increase of operational profit 116.8%, and the increase of net profit 219.4%.

Its conclusion, in First Quarter 2010, the CPO sector shows a quite good increasing in performance. The net profit and equity value of all companies are increasing. However, it is difficult to determine which company has the best performance, because every company is great in one side, but not really so on its other side. There is no company who shows good performance in all aspects (and it is almost usually like that).

Well, that thing is not so important, isn’t it? The important point now is that we will see the comparison of the CPO based on its share price which I will discuss in the next article. Let’s check it out.


 Original article was written on Monday, May 03, 2010

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