Activities are carried out at a coal mining site in Balangan, South Kalimantan.

ted: Wed, March 30 2016 | 09:49 pm

Activities are carried out at a coal mining site in Balangan, South Kalimantan. (JP/R. Bertho Wedhatama)

Coal producer Indo Tambangraya Megah (ITM), controlled by Banpu Group Thailand, has transferred 99.9 percent of its profits to shareholders, instead of storing the profits in internal cash for expansion.

The company allocated 1 percent of its profits for retained earnings, despite the US$63.1 million net income booked last year. The company allocated 99.9 percent of the profits for dividends, most of which went to Banpu as the owner of 65 percent shares.

"We'€™ve already paid US$57.98 million or around Rp 752 per share as interim dividends on October 26, 2015. The remaining $5.07 million or Rp 68.6 billion will be distributed on April 21," Finance director Yulius Kurniawan Gozali told thejakartapost.com in Jakarta on Monday.

Leaving only $50,000 of profit for retained earnings, the company is not preparing for massive expansion.

The decision is in line with the Banpu situation, which requires cash to pay the group'€™s debts and investment. According to its 2015 financial statements, Banpu Plc withdrew $265.8 million in dividends from its subsidiaries, a 152 percent increase from 2014 dividends of $105.13 million.

The parent company also received $237.1 million from investment disposal in its subsidiaries'€™ power plants and mining sites. To raise more funds, Banpu plans to issue 2.58 billion new shares, eyeing $363.83 million in cash to repay debts and interest.

It requires huge investment for its solar power plant projects in Japan, China and Thailand. As reported by Bangkok Post, the 1,320 Megawatt (MW) project in China will be commercially run at the end of 2016.

In Indonesia, the company is set to close its Tandung Mayang site, which contributed 8 percent of 28.5 million tons of its total coal production in Indonesia last year. However, there are no plans to acquire a new site, as the $38.4 million capital expenditure (capex) in 2016 will be used for equipment.

"If we need to, we will take out a bank loan, or just grab it from our internal cash," said Yulius.

ITM has a cash balance of $268 million. According to Yulius, the acquisition will only use around 10 to 20 percent of the cash balance.

ITM operates five sites, namely Trubaindo, which has 7.3 million tons of coal reserve, Bharinto 2.8 million tons, Jorong 1.3 million tons, Indominco 13.3 million tons, and Embalut 1.2 million tons.

"This year we are targeting 26.9 million tons of coal production, compared to 28.5 million tons last year," Yulius said, adding that the drop in production was due to a decrease in ITM's average selling price to $56.40 per ton. (ags)

Are yellow plates a feasible option for Uber, Grab?

The government has urged Uber and GrabCar to become business entities and apply for yellow license plates for their armadas, which identify cars designated for public transportation, to create a level playing field with conventional taxis.

Some have questioned whether yellow plates would be the best choice for ride-hailing apps in their bid to legalize their operations in Indonesia. 

Thejakartapost.com made some simple calculations and found that car owners working with ride-hailing apps would pay lower administration costs if they drove yellow-plated cars, compared to the costs they must bear for their private cars at present.

A yellow-plated Toyota Vios, which is widely used in taxi armadas, bears annual tax of Rp 269,000 while a private car, featuring a black license plate, needs to pay 10 times more, at Rp 2.7 million.

Referring to Transportation Ministry information, the cost to undergo a road worthiness test is Rp 100,000 per vehicle every six months, or Rp 200,000 per year. It usually takes one hour to complete the test.

Routine licenses cost car owners Rp 150,000 for the permit, plus Rp 25,000 for a travel time card. The license is valid for five years, thus the annual cost is Rp 35,000.

In total, adding the extra cost for license and scrutiny tests, car owners who joined with Grab and Uber would only have to pay Rp 504,000, far less than the Rp 2.7 million they would otherwise pay annually for their private car.

Indonesian Taxation Analysis Center (CITA) tax expert Yustinus Prastowo agreed that operating as public transportation vehicles would allow Uber and GrabCar drivers to pay lower administrative costs. Their cars would also not be subject to value-added tax.

"If they [Uber and GrabCar] use black plates as they are doing now, they are subject to value-added tax," he said, noting a 2003 Finance Minister Decree that excludes taxi services from the tax.

Profit scheme

Yustinus added that if the government wanted to make sure that Uber and GrabCar paid the required tax, the solution would be more complicated than issuing them with yellow plates. For example, the government must assess the profit-sharing scheme between app developers and the drivers or car owners.


"Conventional taxi drivers have their fees or commissions automatically deducted for income PPh [tax]. What about the profit sharing in app-based transportation? Who will deduct or pay the tax? Do the drivers pay their income tax?" he said.

Therefore, he argued that the yellow plates were not the answer. The best solution, according to him, would be for both types of taxis to play by the same rules to guarantee some of the principles of private transportation such as tax liability, car quality inspections and customer service.

"It would be good to have them both running under the same regulations. However, vehicle owners with the apps may be reluctant to change their plates to yellow," He said.

Yustinus suggested that app-based taxis use special plates for their vehicles, instead of converting to yellow plates. "The plates may be black, but with a distinctive added mark," he said.
thejakartapost.com, Jakarta | March 24 2016

Sharia-stock traders flat despite increase in products: IDX

The Indonesia Stock Exchange (IDX) has reported an increase in sharia-based products to 318 stocks or 61 percent of listed stocks, accounting for Rp2.6 quadrillion (US$195 billion) of the capital market. However, the few sharia-based investors remain flat.

IDX director Nicky Hogan said there were 318 sharia stocks or 61 percent of the total 523 stocks in the market. The market capitalization is equal to 53 percent of the total market share. Unfortunately, there are only 4,908 single investor identifications (SIDs) who are categorized as sharia investors, or 1 percent of the total 477,000 SIDs.

"This year, we're aiming for an additional 5,000 sharia investors. We must admit that the conventional investors are growing faster, totaling 434,443 at the end of 2015, up by 40,000 in just three months," he said on Monday in Jakarta.

Sharia investors, he continued, wanted their trading accounts to be opened in a sharia bank, which created another problem. "Currently there are only two sharia banks operating as administrators," Indonesia Central Securities Depository (KSEI) director Frederica Widyasari Dewi told thejakartapost.com.

Those two sharia banks are Bank Syariah Mandiri and BCA Syariah, which just joined this year following Bank Syariah Mandiri in 2015.

Moreover, holding sharia stocks is not simple at the operational level, as the sharia stocks list (DES) changes every six months following periodic review. Several sharia stocks may lose their status after the review, forcing sharia-investors to sell them regardless of gain or loss.

To get around such problems, securities companies make a double-trading account to prevent the forced-sell. "If they buy stocks that are suddenly kicked out from the sharia list, the gains will be transferred to a conventional account, while the sharia profit goes to a sharia investor account," Frederica said.

 - See more at: http://m.thejakartapost.com/news/2016/03/28/sharia-stock-traders-flat-despite-increase-products-idx.html#sthash.ATzGEzZk.dpuf

Indofood’s profits nosedive amid economic downturn

Publicly listed food giant PT Indofood Sukses Makmur booked a lackluster performance in both sales and net profits amid an unfavorable business climate last year, when the country’s economy grew at its slowest pace in six years.

The group, which is listed on the bourse as INDF, recorded a 23.8 percent slump in net profits to only Rp 2.97 trillion (US$222.75 million) last year from Rp 3.9 trillion in 2014.

The relatively poor performance was mainly the result of ballooning financing costs amid almost flat sales, according to the firm’s financial report published on Monday.

The conglomerate’s net sales increased by just 0.7 percent year-on-year (yoy) to Rp 64.06 trillion last year from Rp 63.59 trillion in 2014, according to the report.

Its sales costs, meanwhile, slightly increased to Rp 46.8 trillion last year from Rp 46.5 trillion in 2014, and its financing costs surged by 72.3 percent yoy to Rp 2.67 trillion from Rp 1.55 trillion. 

NH Korindo Securities head of research Reza Priyambada said Indofood’s sales growth last year was far below most analysts’ forecast of between 5 and 7 percent.

“If we review it, the company’s performance has been volatile since its consumer branded products [CBP] became a separate entity ICBP. It was also affected by economic slowdown last year,” he said on Monday.

In addition, the company’s poor revenue growth was likely due to insignificant price hikes of its products that failed to counterbalance low demand last year, he said.

Indonesia’s economic growth amounted to only 4.79 percent last year, the lowest rate since 2009.

Southeast Asia’s largest economy saw household spending, which is its main growth engine, rise by 4.96 percent last year, down from 5.14 percent in 2014. 

Indofood’s CBP unit, the company’s largest contributor to overall sales, saw its sales grew by only 5.7 percent yoy to Rp 31.74 trillion last year, lower than the 6.6 percent annual growth rate achieved in 2014.

It furthermore booked 13.6 percent yoy growth in net profits to Rp 3 trillion last year, a far cry from the 27.9 percent increase in 2014.

CBP, which produces the popular instant noodle brand Indomie, made up 49 percent of Indofood’s total net revenues last year. 

Indofood’s Bogasari, agribusiness and distribution business units, meanwhile, contributed around 24 percent, 19 percent and 8 percent to the company’s total revenues last year, respectively.

Indofood president director & CEO Anthony Salim signaled that the company’s performance would likely improve this year on the back of better macroeconomic conditions.

“Entering 2016, we are positive on the improvement in the macroeconomic climate. However, we remain cautious about the possibility of new challenges emerging. We’ll continue to pursue sustainable growth, both organic and inorganic, while maintaining a healthy financial position,” he said in a statement.

The government aims for gross domestic product (GDP) growth of 5.3 percent this year, with the World Bank and the International Monetary Fund (IMF) projecting 4.9 percent and 5.1 percent, respectively.

See more at: http://m.thejakartapost.com/news/2016/03/29/indofood-s-profits-nosedive-amid-economic-downturn.html#sthash.kK9phZIr.dpuf