10 January 2019

JAKARTA - Plantation issuer, PT Mahkota Group Tbk. projects that sales this year have the potential to reach IDR 5 trillion driven by sales of crude palm oil (CPO) derivative products.

In 2018, the issuer from Tanah Deli targeted the company's sales to reach IDR 2 trillion. However, this year the company has set an ambitious revenue target, which is 2.5 times the 2018 target.​

The Rp5 trillion sales target was set in line with the completion of the new refinery plant in June 2019. 

Corporate Secretary of Mahkota Group Elvi said the contribution of the refinery plant to sales will begin in July 2019. The new plant will produce CPO derivative products such as olein or cooking oil and sterin which is the raw material for margarine or oleochemicals.

“Sales contribution from refineries is approximately 40% of the target,” he told Bisnis on Wednesday (9/1).

“Sales contribution from refineries is approximately according to him, there are quite a lot of companies targeting the CPO business, so there is quite fierce competition. To anticipate this, the company began targeting CPO derivative products. About 40% of the target,” he told Bisnis, Wednesday (9/1).

To obtain higher profit margins, the company must create value-added products.

In 2018, the profit target of the issuer coded as MGRO shares was IDR 50 billion and is targeted to increase to IDR 123 billion this year.

In order to launch cooking oil production in the second semester of 2019, the company has provided stock since the end of last year. MGRO procured stock by slowing down CPO sales at the end of last year.

Meanwhile, the value of the turnaround project reached IDR 330 billion. The funds for the construction of MGRO's cooking oil factory came from bank loans and funds from the initial public offering (IPO).

Based on Bisnis records, MGRO obtained funds worth IDR 158.33 billion from the IPO. As much as 60% of the funds or around IDR 95 billion were allocated for the construction of a new factory. Meanwhile, the remaining 40% is used as working capital for its subsidiaries.

President Director of Mahkota Group Usli Sarsi previously said that the development of the downstream industry in the form of the construction of a refinery plant with a capacity of 1,500 tons per day and a kernel crushing plant of 200-400 tons per day in Bengkalis Regency, Riau, could run in September 2018. The project is carried out by MGRO's grandson, PT Intan Sejati Andalan and is targeted for completion in June 2019.

In its September 2018 financial report, MGRO's revenue amounted to IDR 1.46 trillion, up 18.7% year-on-year from IDR 1.23 trillion. Profit attributable to owners of the parent entity reached IDR 45.41 billion, from a net loss position of IDR 17.27 billion.

For information, MGRO is an issuer that listed on the IDX on July 12, 2018. In the IPO, the company released 703.68 million new shares or equivalent to 20% of the issued and fully paid capital.

At the close of trading last year, MGRO shares landed at the price level of IDR 995 per share. Thus, MGRO scored a price growth of 342.22% throughout 2018.​

As for the end of trading on Wednesday (9/1), MGRO closed at the price level of IDR 935 per share. MGRO is traded at a price earnings ratio (PER) of 55 times. Meanwhile, MGRO's market capitalization value is IDR 3.29 trillion. (Novita S. Simamora)

Source : Harian Bisnis Indonesia Terbit Kamis, 10 Januari 2019