Jakarta, June 15, 2016 – Decision to pay out IDR 32/share in dividends to shareholders was taken today at the Annual General Meeting of Shareholders (RUPST) of PT Saratoga Investama SedayaTbk. (ticker: SRTG), the company’s first since its IPO in 2013.
Saratoga President Director, Michael W.P.Soeryadjaya stated that the AGMS decision to pay out dividend – despite challenging economic condition–reflectsthe company’s solid commitment to increasing shareholders value. “Shareholders’ support is a critical source of strength for our long term growth and sustainability.”
One transaction that proves the company’s outstanding capability to create value was the IDR98 billion divestment of PT PulauSeroja Jaya, resulting in a 48% Internal Rate of Returnover 8 years.
“Our investment and divestment activities must allow us to unlock value and boost growth for investee companies, thus enhancing strategic importance and financial returns for our shareholders,” said Michael after the company’s Annual General Shareholders Meeting (RUPST) in Jakarta, Wednesday (15/06).
In the past eight years, Saratoga has successfully recycled capital which leads to Net Asset Value (NAV) growth from IDR 1.3 trillion in 2008 to IDR 13.3 trillion in 2015, resulting in the 33.5% CAGR. As of Q1 2016, Saratoga booked a Net Asset Value (NAV) of IDR 14.8 trillion, with 22 operating investee companies across the three key sectors, employing more than 40,000 employees. The NAV was calculated conservatively based on the market value of listed investee companies — the shares of which are listed on the stock exchange and the book value of non-public investee companies.
In 2015, the companyinvesteda total of IDR 649 billion, IDR 304 billion of which was for investments into new opportunities, the remainder being deployed as follow on investments into existing portfolio companies.
This disciplined and prudent investment strategy is also reflected in the Company’s approach in screening new opportunities. As an example, in 2015, Saratoga managed to identify 101 investment prospects, from which only 2 made it through a very strict screening mechanism employed by Saratoga’s management.
The new investments are into PT Agra Energi Indonesia andacquisition of PT BatuHitam Perkasa; as the shareholder of Paiton Energy, one of the largest IPPs in Indonesia with 2GW power generating capacity.
Saratoga Finance Director, Jerry Ngo said that in Q1 2016, Saratoga invested in cold-chain logistics through the share acquisition in PT Mulia Bosco Logistik (MGM Bosco). “This transaction presented Saratoga an exceptional opportunity to build a strong growth platform in the cold chain logistics sector,” Jerry said.
In May 2016, Saratoga took an opportunity to reduce debt by repurchasing USD 17.3 million worth of its Exchangeable Bond issued by its subsidiary Delta Investment Horizon Ltd (“Delta”). All the repurchased bonds were cancelled, reducingthe outstandingprincipal amount from USD 100 million to USD 82.7 million.
The management’s decision to repurchaseEB also produced positive cash flow of USD 2.7 million.“The initiative has proven that Saratoga’s active investment business model is effective in monetizing from and investing intoits investee companies,” explained Jerry.
As part of the AGMS decisions, the shareholders agreed that by first half of 2016 Saratoga will begin implementing financial report based on PSAK 65 – Consolidation Exception, which was taken effect on 1 January2015. The change in the financial reporting aims to provide better presentation of the Company’s financial performance to shareholders, creditors, and other capital market professionals in making their investment decisions.
“The implementation of PSAK 65will hopefully allow stakeholders and shareholders to have clearer information that reflect the Company’s effectivebusiness model of investing, growing, and monetizing,” Jerry said.
Investee Companies’ Performance
Saratoga actively manages its investment portfolio to ensure sustainable growth in the long term.
Natural Resources Sector
PT Adaro Energy Tbk. (IDXticker: ADRO) through its subsidiary PT Bhimasena Power Indonesia on June 6, 2016 has achieved financial close for 2×1,000 MW power plant project in Batang Regency, Central Java. Following the financial close, construction of the power plant will begin with the commercial operational date expected in 2020. The total investment for the project is USD 4.2 billion.
In early June 2016, PT Adaro Energy Tbk. through its subsidiaries have signed a Share Sale Agreement with BHP Mineral Holdings Pty. Ltd. and BHP Minerals Asia Pacific Pty. Ltd with the objective of purchasing and taking over the entirety of the shares of the Indomet Coal Project, consisting of 7 PKP2B in Central and East of Kalimantan with an overall transaction value of USD 120 million.
PT Merdeka Copper Gold Tbk (IDX ticker: MDKA) targets production of gold from the Tujuh Bukit Mine in Banyuwangi by the end of2016. Production of gold and silver at the mine will reachapproximately 90,000 oz and 300,000 oz per year respectively for the first nine years. In an effort to support the construction of its Tujuh Bukit gold production facilities, Merdeka has successfully securedits capital expenditurerequirement from various funding sources.
Sumatra Copper & Gold (ASX ticker: SUM) also started its gold production in 2015 at its Tembang project. SUM is listed on the ASX with projects spread throughout several locations in Sumatera.
PT Lintas MargaSedaya (LMS) successfully completed and commercially opened the 116.75 km Cikopo – Palimanan (Cipali) toll road – which is part of the Trans Java toll network. The toll which was inaugurated by President Joko Widodo in June 2015, crosses 5 regencies in West Java, namely Purwakarta, Subang, Majalengka, Indramayu, and Cirebon. The toll reduces travelling time by 1.5 – 2 hours and distance by 40 kilometers compared to Pantura road. Cipali toll road is expected to drive people and logistical mobility that will create economic multiplier effect across the regions.
The infrastructure sector also foresees future challenges pertaining to the status of PT Tri Wahana Universal (TWU). The mini refinery in Bojonegoro, East Java has ceased production although it continues to run operational activities, including sales, distribution and collection. The reason behind the halt in TWU’s mini refinery production is the lack of regulation on the crude oil supply pricing formula at the well mouth, which is fundamental to the continuation of TWU’s crude oil supply contract.
As the first national private oil refinery in Indonesia which has been in production for over 5 years, TWU mini refinery has made positive contributions and created multiplier effect for the local economy and social growth, including employment opportunities and promoting higher income for the people of Bojonegoro and East Java.
PT MitraPinasthikaMustikaTbk. (IDX ticker: MPMX), a national consumer automotive company has decided through its AGMS a 2.5X increase in dividend payout from IDR 30.5billion in previous year to IDR 75.9 billion or IDR 17per share. The amount accounts for 26.6% of the profits attributable to owners of the parent in 2015.