Profit and Loss Report
During 2016, the Company’s average selling price of CPO improved significantly. The increase in CPO average selling price was due to a decline in the production of Fresh Fruit Bunch (FFB), as an impact of the prolonged dry season (El Niño), occurring in 2015. However, with the implementation of intensification, mechanization and automation programs starting a few years earlier, the Company managed to maintain good operational performance, with CPO production reaching 1.55 million tons.
The Company's net revenue increased by 8.13% in 2016 to Rp 14.12 trillion from Rp 13.06 trillion in 2015. This increase in net revenue may be attributes to the rise in the CPO average selling price, by 11.4% from Rp 6,971 per kilogram in 2015 to Rp 7,768 per kilogram in 2016. While the Company's CPO sales volume decreased by 2.7% from 1.04 million tons to 1.01 million tons in 2016, and total derivative products sales volume decreased by 7.0%, whereby Olein decreased by 22.4% from 412 thousand tons to 320 thousand tons, Stearin declined 32.8% from 122 thousand tons to 82 thousand tons and PFAD descended by 2.0% from 27 thousand tons to 26 thousand tons, although RBDPO sales volume increased by 400.3% from 23 thousand tons to 115 thousand tons.
In 2016 The Company's gross profit also recorded an increase of 19.3% from Rp 3.08 trillion in 2015 to Rp 3.68 trillion. This was primarily influenced by the increase in the average selling price of CPO and its derivatives. This obviously affected the Company's gross profit margin, which improved from 23.6% in 2015 to 26.0% in 2016.
Profit Attributable to Owners of the Company
For the fiscal year ending December 31, 2016, the amount of net income attributable to the Company owners, increased significantly by 224,2% from Rp 619,11 billion in 2015 to Rp 2,01 trillion in 2016. This increase in net profit was mainly influenced by the increase in the average selling price of CPO and its derivatives, a significant decrease in operational costs, and foreign exchange gains due to the appreciation of the Indonesian Rupiah, increase in deferred tax benefit of revaluation of plantations assets for taxation purposes and provision of the plantation area development project and its infrastructure.
Other Comprehensive Income
The Company posted a gain on remeasurements of employee benefits obligations in 2016 amounting to Rp 65.49 billion, against a recorded loss of Rp 6.28 billion in 2015. Other comprehensive income is the account that records profits or losses related to a change in assumption regarding the calculation of employee benefit oblgation.
Total Comprehensive Income
The Company posted a total comprehensive income of Rp 2.18 trillion in 2016, or an increase of 216.2% compared to 2015 which amounted to Rp 689.40 billion as a result of the increased average selling price of CPO and its derivatives, the decrease of operational costs and foreign exchange gain due to appreciation of the Indonesian Rupiah, increase in deferred tax assets of revaluation of plantation sassets for taxation purposes and provision of the plantation area development project and its infrastructure.
Total Company assets recorded in the financial year ending December 31, 2016 was Rp 24.23 trillion or an increase of 12.6% compared to Rp 21.51 trillion in the previous financial year. This increase in Company assets is due to the increase in the current assets group from Rp 2.81 trillion in 2015 to Rp 4.05 trillion in 2016, particularly in the cash and cash equivalent, account receivables and inventory sections. Non-current assets group also increased from Rp 18.70 trillion in 2015 to Rp 20.17 trillion in 2016 due to the increase in fixed assets and deferred tax assets.
Current assets increased by 44.0% from Rp 2.81 trillion to Rp 4.05 trillion. Some aspects contributing to this increase, include increase in cash and cash equivalent, trade receivable and inventories in line with a positive net cash flow, sales to related parties, and an increase in the average value per kilogram of finished goods inventories.
At the end of 2016, the Company posted a value of non-current assets of Rp 20.17 trillion or an increase of 7.9% compared to non-current assets of Rp 18.70 trillion in 2015. The increase in non-current assets is primarily due to an increase of fixed assets, in line with the addition of CPO processing plants, PKO refinery, Kernel Crushing Plant and fertilizer mixing plant, as well as an increase in deferred tax assets related to revaluation for tax purposes of the crop assets.
The Company recorded a decrease in total liabilities of 32.4% from Rp 9.81 trillion at the end of 2015 to Rp 6.63 trillion at the end of 2016. These liabilities include short term liabilities and long term liabilities. The decline in the Company's liabilities is primarily due to the repayment of long-term liabilities amounting to Rp 3.60 trillion, a decrease of 57.2% from the long-term liabilities in 2015 which amounted to Rp 6.29 trillion to Rp 2.69 trillion in 2016.
The Company also had current liabilities amounting to Rp 3.94 trillion at the end of 2016 indicating an increase of 11.9% compared to 2015. The increase of current liabilities is primarily due to increased long-term loans maturing within one year in line with the debt repayment schedule and increase in trade payables.
The total amount of the Company’s non-current liabilities by the end of 2016 stood at Rp 2.69 trillion or decreased by 57.2% compared to non-current liabilities at the end of 2015 which stood at Rp 6.29 trillion. The decrease in non-current liabilities is due to the repayment of long-term bank loans originating from the Limited Public Offering I.
At the end of 2016, the Company’s equity increased by 50.4% to Rp 17.59 trillion from Rp 11.70 trillion at the end of 2015. This increase in equity is mainly due to addition of share capital from the Limited Public Offering I conducted by the Company, and increase in 2016 total comprehensive income.
The Company balance sheet posted a cash and cash equivalent position of Rp 532 billion at the end of 2016, representing an increase of 80.5% compared to Rp 294 billion at the end of 2015. This was affected by the increase in cash flow related to operational activities.
Debts and Capital Structure
An analysis on the Company’s fundamentals by calculating the gearing ratio, where net loans are compared against the Company’s net worth, revealed that in 2016 was 20% against 64% in 2015. With the net tangible assets owned, the Company will be able to meet both its current and non-current obligations.
In managing the capital, the Company will also continue to maximize the benefits for all shareholders and other stakeholders. It will continuously examine any policies related to capital and ensure a sound capital structure capable of provide optimal returns to its shareholders.
Dividends and Cash Dividends Policy per Share
During the Annual General Meeting of Shareholders held on 11 April 2016, the shareholders agreed not to disburse dividends on profits of the 2015 fiscal year, whereas for the 2016 financial year profits, based on the decision of the Board of Directors which was approved by the Board of Commissioners on 20 September 2016, it was decided to disburse an interim dividend of Rp 190.54 billion or Rp 99 per share.