17 June 2020

Crude palm oil (CPO) producer, PT Mahkota Group Tbk (MGRO) does not deny that the export market still gets MGRO's attention. Management hopes that the CPO export market will be even more vibrant if Indonesia can win the lawsuit at the World Trade Organization (WTO).

According to Elvi, Corporate Secretary of MGRO, palm oil prices have the potential to be boosted by cutting CPO export costs by Malaysia, which is one of the countries that determines the CPO reference price. This can benefit Indonesia's CPO product export business in the future.

However, the export market will be challenged by the slowdown in global CPO demand, which is estimated to fall by 20% this year. Elvi said that in terms of volume, national palm oil exports in the January-April 2020 period declined although there was an increase in terms of transaction value.

“MGRO hopes that the CPO export market can increase even though it does not focus directly on specific export targets but is more tailored to the demand from foreign markets,” Elvi told Kontan.co.id, Friday (12/6).

MGRO is currently known to be exploring export sales, through the Refined Bleached and Deodorized Palm Oil (RBDPO) factory in Riau this April 2020. At that time there were already export orders for the raw material needs of the consumer industry of around 3,000 tons of processed products from the factory.

Because it is new and has not contributed much, the export market segment has not been recorded in MGRO's financial statements in the first quarter of 2020. In that period, MGRO's net revenue was recorded to increase 35% year on year (yoy) to IDR 599.92 billion. However, cost of goods sold was 43% higher yoy to IDR 574.27 billion in the first quarter.

Swollen cost of goods sold affected MGRO's gross profit to IDR 25.64 billion in the first quarter of 2020 or down 42% compared to the same period last year of IDR 44.97 billion. Meanwhile, many other expense items increased, such as financial expenses up almost 32.5% yoy.

As of March 2020, MGRO posted a net loss of IDR 16.92 billion, whereas in the first quarter of last year MGRO was still able to book a net profit of IDR 6.03 billion. MGRO's own management has not provided comments regarding this performance.

Source : https://industri.kontan.co.id/news/mahkota-group-mgro-tetap-bidik-pasar-ekspor-di-tahun-ini