26 November 2020

PT Mahkota Group Tbk (MGRO) plans to be more expansive next year. Not only focusing on the downstream of palm oil products, the company also plans to take corporate action by acquiring oil palm plantations, aka penetrating the upstream sector.

According to Usli Sarsi, President Director of MGRO, management is considering the plan. “It just so happens that the upstream palm oil business is improving this year. We also gradually have plans to move there by acquiring several plantation companies,” he said during the company's virtual public expose, Wednesday (11/25).

Previously, the company was known as a palm oil processor with several products such as palm oil (CPO), palm kernel, Refined Bleached Deodorized Palm Oil (RBDP) and several other products. To initiate the plan next year, management has prepared at least IDR 250 billion - 350 billion.

Furthermore, Usli said, the budget will still be discussed further. Apart from the upstream sector, the budget, management said, would also be absorbed to build several storage tanks. Meanwhile, the source of funding is still being studied, either from a rights issue or issuing bonds.

Next year, the company will also prioritize strategic cooperation measures. Such as the company's cooperation with a company from France for the development of palm oil waste processing into methane gas.

This said Usli is part of MGRO's strategy to engage in green energy discourse. “We have also signed an agreement with the French company to build a power plant or power plant with a methane gas source,” he explained.

As for revenue projections this year, the company is optimistic about pursuing double-digit top line growth for 2020 performance. Until the end of the year, the palm oil company is aiming for a revenue target of IDR 3.2 trillion.

Just so you know, the target is an increase of around 63.78% compared to last year's revenue realization of IDR 1.95 trillion. It seems that the target is not a grandiose thing, because until the third quarter of this year net income has reached IDR 2.53 trillion, up 85.4% on an annual basis.

Source : https://stocksetup.kontan.co.id/news/mahkota-group-mgro-berencana-akuisisi-perkebunan-sawit