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[Release] Barito Balances Income Contributions
 

Journalists: Adi Teguh & Abdul Malik

 

PT Barito Pacific Tbk (BRPT) will balance the segments’ revenue contributions by diversifying the business. The company will increase the contribution from the plantation segment and plans to enter in the mining sector.

Agustino Sudjono, Senior Vice President of Investor Relations Barito, said that 90 percent of corporate income is derived from the petrochemical sector, through its subsidiary PT Chandra Asri Petrochemical Limited (TPIA),

Currently, Barito is striving for an expansion in the oil palm plantation through subsidiary PT Grand Utama Mandiri. Of the total Rp 16.97 trillion revenue in 2010, the oil sector accounted for only Rp 1.9 billion.

Reza Andriansyah, President Director of Grand Utama, is targeting the company’s revenue in 2011 to reach Rp 15 billion. In 2012, the figure could rise threefold, as the oil palm plantation area ready for harvest will increase to 6,000 hectares from this year’s 2,000 hectares.

In 2014-2015, the oil sector’s contribution is projected to increase significantly as the company is planning to add land concession rights to 50 thousand hectares in 2015. Until now, Barito has a land area of 13 thousand hectares. Barito plans to inject funds amounting to US$ 50 million, or 50 percent of the proceeds from the seven percent share release of Chandra Asri to SCG Chemicals Co. Ltd., a subsidiary of Siam Cement Group, Thailand.

In addition to palm oil expansion, Barito is also targeting revenues from the coal mining business with 50 percent funds coming from the release of stake in Chandra Asri.

Agustino explained that Barito will further expand their business in the energy sector and other natural resources. In the future, sources of income from timber, oil, petrochemical and coal sectors are expected to be balanced.

"We aim to have diverse sources of revenue, because every industry sector has its own cycle," he said.

Quasi-Reorganization

Agustino said the company’s plan to conduct quasi-reorganization is still ongoing. The move is targeted to be official in late September 2011, with the company reporting the audited 2011’s first half financial statements. The delay in the quasi was because the Capital Market Supervisory Agency authority requires the company to attach the financial reports.

"The quasi documents will be attached together with the financial statements. We will submit the documents by the end of this month, at the latest," he said.

The step to conduct a quasi is for the company to cover the Rp 6 trillion deficit, which is accumulating over the years.

Agustino said the quasi will make the company's balance sheet healthier and stronger. The company's equity will increase from Rp 5.9 trillion to Rp 7.1 trillion. That figure is derived from additional paid-in capital of Rp 5.9 trillion, and the rest is the result of the revaluation plan assets of Rp 1.2 trillion.

On Wednesday’s trade closing, Barito’s share price edged up Rp 50 or 5.32 percent to Rp 990, compared to the previous’ closing trade.

Increased Contribution to Barito

PT Barito Pacific Tbk (BRPT)’s financial statements in 2010 showed total assets of subsidiaries in the palm oil plantation sector – run by PT Royal Indo Mandiri, amounting to Rp 324 billion and assets of the Grand Utama at Rp 184 billion. IFT Research Department assessed that the company's plan to develop palm oil plantation would increase the contribution to Barito. In 2010, palm oil sector contributed 0.01 percent of the company’s total revenue.

This target can be realized with financial assistance from the owner of Barito, similar to the acquisition of PT Chandra Asri Petrochemical Limited (TPIA) and PT Trypolita Indonesia Tbk (TPIA) in 2007 and in 2008. The company’s revenues in 2006, before acquiring Chandra Asri, amounted to Rp 465 billion. However, after acquiring Chandra Asri and Tripolyta, Barito’s revenue in 2008 grew to Rp 18 trillion.

Before the acquisition of Chandra Asri and Tripolyta, Barito’s assets reached Rp 1.7 trillion. After the acquisition, the assets grew to Rp 16 trillion.

 

Source: Indonesia Finance Today