Supported by Positive Performance of Investee Companies, Saratoga Rakes In Record Dividend Income in 2018
Jakarta, March 27, 2019 – PT Saratoga Investama Sedaya Tbk. (Saratoga, ticker code: SRTG) posted over Rp 1.1 trillion of realized income during 2018. The income was primarily contributed by the dividend payment from the investee companies as well as divestment proceeds. In terms of the overall performance of the investment portfolio, though the fundamentals of the companies remained strong throughout the year, external factors such as raising interest rate, weakening currency and volatile commodity prices have put pressure on the JCI Index and consequently created an adverse impact to the share price performance of the investment portfolio. The company closed the year of 2018 with a net loss of Rp 6.2 trillion. The loss was unrealized and mainly driven by the mark-to-market share price movement of PT Adaro Energy Tbk. (ticker code: ADRO) and PT Tower Bersama Infrastructure Tbk. (ticker code: TBIG). The company’s total assets are Rp 20.1 trillion which are attributable to the investee companies that focus on three main sectors, namely natural resources, infrastructure and consumer goods and services.
Saratoga President Director Michael Soeryadjaya explained that the company’s performance in 2018 illustrates that the investment strategy carried out by Saratoga was able to produce optimal investment results. Fundamentally, Saratoga’s investee companies also enjoyed positive growth and continued to increase the company’s added value through organic and non-organic growth strategies.
“We are pleased with the performance of our investee companies amid the highly dynamic business challenges in 2018. The discipline and prudence from our investment team were key to Saratoga’s success in achieving optimal investment returns,” Michael explained in Jakarta, (27/03).
Michael further explained that in 2018 the company posted dividend income of Rp 900 billion by 6 investee companies. For us, this result demonstrated the strong operational and business performance of the investee companies. We are delighted to see not only continous growth of the dividend income over the years but also, and more importantly, the diversification of the investee companies that are contributing the dividends. That being said, due to the persistant market volatility throughout the year and the new accounting treatment adapted in 2017, we have recorded a net loss, unrealized, of IDR 6.2 trillion. From time to time, it is normal for the market to go through different stages of volatility and as long term investors we remain confident on the outlook of the investee companies and believed the share prices will eventually catch up with the fundamentals of the companies.
In 2018, Saratoga also continued to identify opportunities to add value. One of them is the new investment in PT Aneka Gas Industri Tbk. (ticker code: AGII), the country’s dominant industiral gas supplier. To take advantage of the growth of the technology sector, Saratoga has also begun adding exposure to the start-up business via investment partners. The company believes that the tech sector holds promising prospects in the future due to disruption in our way of life and the wide implication to the community.
In addition, Saratoga divested its holding in Batu Hitam Perkasa, a minority shareholder of PT Paiton Energy. This strategy was part of an effort to complete the company’s investment cycle, where Saratoga not only invested, but was actively involved in growing and developing the company to achieve maximum potential. Saratoga also continues to actively support existing investee companies in growing their businesses, such as PT Mulia Bosco Logistics (MBL), Awal Bros Holding Group Hospital, and Deltomed, to name a few.
Saratoga Chief Financial Officer Lany Wong said Saratoga’s robust performance is also influenced by a number of corporate actions by investee companies through acquisitions and divestments carried out in the natural resources and consumer sectors.
“Saratoga will continue to encourage new investments both directly and through the Saratoga investee companies. This step demonstrates Saratoga’s commitment to strengthening three pillars in the natural resources, consumer and infrastructure sectors,” Lany said.
In the natural resources sector, PT Adaro Energy Tbk. (ticker code: ADRO) on August 1, 2018, with EMR Capital Ltd, a private equity company specializing in mining, completed an acquisition of Rio Tinto’s 80% ownership of Kestrel Coal Mine (Kestrel).
Meanwhile, PT Merdeka Copper Gold Tbk. (ticker code: MDKA) has made strategic acquisitons of two mining assets, acquiring majority stakes in Finders resources limited, which owns an operating copper mine on Wetar Island in West Nusa Tenggara; and the Pani greenfield gold project in Gorontalo, North Sulawesi.
In the consumer sector, PT Mitra Pinasthika Mustika Tbk (ticker code: MPMX) has completed a 100% strategic divestment of its shares in the company’s lubricant business, PT Federal Karyatama (FKT), with an overall transaction value of US$ 436 million. This transaction reaffirms MPMX’s commitment to continue exploring hidden values in the company so that it can provide more value to shareholders in the form of capital appreciation and consistently strong dividend distribution.
“Saratoga’s investment strategy is to remain focused on three main sectors, but we will also be open to new opportunities such as investment in the technology sector. Amid the ongoing dynamics of the business, we expect Saratoga’s business portfolio to remain solid and grow sustainably,” Lany concluded.