MAHKOTA GROUP (MGRO) HOPES THAT THE SALE OF ITS REFINERY THIS YEAR
10 April 2019
KONTAN.CO.ID - JAKARTA. PT Mahkota Group Tbk (MGRO) in 2019 is optimistic that it can record revenues of IDR 5 trillion, supported by contributions from refinery sales which are estimated to reach 40% of total revenue.
For information, the refinery plant is expected to operate in August 2019. MGRO has budgeted a capital expenditure of IDR 200 billion in 2019 which will be used to continue the construction of the refinery and build a stockpile tank.
“The source of funding will come from the remaining IPO funds and external financing,” said Elvi, MGRO Corporate Secretary in a press release on Tuesday (9/4).
Last year, MGRO recorded revenue in 2018 of IDR 2 trillion, up 13.5% yoy, supported by an increase in sales volume throughout 2018. MGRO's CPO sales volume was recorded at 212,129 tons up 34.7% yoy, an increase higher than the decline in CPO ASP prices throughout 2018 which on average recorded a decline of 13.3% yoy.
The increase in CPO sales volume was supported by increased CPO demand from one of MGRO's largest customers, PT Musim Mas. Revenue is still dominated by the CPO segment which contributed 75.7% of total revenue, or equivalent to IDR 1.65 trillion.
Throughout 2018, MGRO was also able to record an increase in CPO production volume reaching 38% yoyat or equivalent to 219,149 tons while in 2017 it was 158,720 tons.
This was supported by an increase in the number of FFB purchases by 35.6% yoy to 1.2 million tons triggered by the increase in FFB harvest throughout 2018.
In addition, the utilization of the 4 mills owned by MGRO also increased higher than historical in line with the increase in FFB purchases. The company's management estimates that the utilization rate of PKS throughout 2018 could reach the 80% level, an increase compared to the historical trend in the range of 60%-70%.
Amidst the increase in FFB purchases, FFB purchase prices recorded a decrease of 9.2% yoy, resulting in MGRO recording an increase in gross profit margin in 2018 to 13.0%. In line with this, operating and net profit margins also increased in 2018 with 7.7% and 4.2% respectively.
Apart from the decrease in FFB purchase price, MGRO also recorded a decrease in financial expenses of IDR 10.7 billion supported by a decrease in debt levels where the net gearing ratio was recorded at 0.28x in 2018 compared to 2017: 0.96x.