JAKARTA, JULY 30, 2020 - PT Dharma Satya Nusantara Tbk (“the Company”, “DSNG”) delivered a strong performance in the second quarter of 2020 with a profit surged by 163% to Rp 180 billion against the same period last year, primarily driven by higher palm products sales volumes coupled with a more favorable average selling price (ASP) of CPO.
During the first six months of this year, the Company recorded a revenue of Rp 3.15 trillion, an increase of 22% compared to last year whereas the palm oil segment contributed around Rp 2.66 trillion or 84% of total revenue.
In the second quarter of 2020, the palm oil segment grew by 26% from the same period last year, mainly driven by a higher CPO’s ASP of Rp 7.8 million per ton against Rp 6.4 million per ton in the second quarter last year.
The President Director of the Company, Andrianto Oetomo, said that the CPO selling price began to show an upward trend this year after weakening last year given the rising stockpile, both in Indonesia and Malaysia.
“Against last year, average CPO price during the first semester of 2020 has strengthened a lot in spite of a dip in the second quarter of 2020 due to a weak demand as a result of the COVID-19 pandemic globally. However, we are optimistic that the upward trend in CPO price will continue towards the end of year as the normal economic activities resume in several countries post lockdowns imposed in the second quarter of 2020, “Andrianto Oetomo said in the Company’s official statement.
Moreover, the firm commitment of Indonesia government to develop the mandatory biodiesel projects and the success of Pertamina to further upgrade biodiesel mix in diesel fuel to 100% (D100), will certainly create some opportunities to boost the CPO domestic demand, and hence encouraging the increase in CPO price.
In the first half of 2020, the Company recorded EBITDA of Rp 690 billion, 20% higher compared to the same period last year, with an EBITDA margin of 22%, relatively similar to the EBITDA margin in the first semester of last year.
On the operational side, the Company produced 312 thousand tons CPO during the first six months of 2020, grew by 19% from the same period last year. The Company succeeded in improving the mill productivity by achieving an Oil Extraction Rate (OER) of 24.09% compared to last year of 22.99%.
Meanwhile, the revenue generated by our wood product business during 1H20 was still higher than 1H19 despite the weaker sales in the second quarter of 2020 following the adverse impact of Covid-19 on the exporting countries.
Panel product recorded a 15% lower sales volume in Q2-2020 against Q1-2020; even though the YTD sales volume for the first half of 2020 still grew by 6% yoy by reason of a higher sales volume in the first quarter of 2020.
However, the engineered flooring was hit more severely by the Covid-19 as signaled by a 32% decrease in sales volume during the second quarter of 2020; although YTD sales volume for the first half of 2020 only dropped by 7% yoy.
On 23rd July 2020, the Company obtained an effective statement from the Financial Services Authority or OJK for the issuance of its first phase bond offering Year 2020 totaling to Rp 451 billion out of the initial target of Rp 500 billion. This first phase bond offering is a part of the Continuous Public Offering Program for an entire value up to Rp 2 trillion.
The current offering consisted of two series: Series A amounted to Rp 275 billion with a maturity of 3 years and a coupon of 9.60% p.a. and Series B for total value of Rp 176 billion with a maturity of five years and a coupon of 9.90%. p.a. The whole net proceeds of the bonds will be utilized to refinance some of existing loans of the Company and one of its subsidiaries with PT Bank Central Asia Tbk.
Acting as underwriters of this public offering were Mandiri Sekuritas and BCA Sekuritas, whereas PT Bank Mega Tbk acted as the Trustee. DSNG received an idA- (single A minus) rating from PT Pemeringkat Efek Indonesia (Pefindo).
These bonds are offered at 100% principal value. The coupon will be paid quarterly following to the coupon payment date. The first coupon payment is on October 29, 2020, while the final payment and also the maturity of the Bond will be on July 29, 2023 for Series A and July 29, 2025 for Series B.
According to Andrianto Oetomo, this was the Company’s second attempt to tap into the public market since the initial public offering (IPO) of the Company’s shares in 2013. The bond issuance is expected to provide the Company with an alternative source of funding, particularly during the turmoil in the financial market due to the Covid-19 pandemic.
Previously, the Company has signed a USD 30 million 10-year loan facility from Stichting andgreen.fund (&Green), a globally-focused impact investment fund financing sustainable commodity production to protect tropical forests. The first palm oil sector investment of the &Green fund will catalyze the implementation of DSNG’s ambitious No Deforestation No Peat No Exploitation (NDPE) strategy with the social inclusion of smallholder farmers; whilst providing DSNG the flexibility to further diversify its sources of funding.
ABOUT PT DHARMA SATYA NUSANTARA Tbk
PT Dharma Satya Nusantara Tbk was established on September 29, 1980 and has engaged in the palm oil and wood products industry since. The Company currently has 112,450 hectares of planted areas of palm oil plantations and 10 palm oil mills with a total capacity of 570 tons per hour, that processes Fresh Fruit Bunches (FFB) into Crude Palm Oil (CPO). As for the wood product business segment, the Company operates a wood processing plant in Central Java, which produces panels and engineered floorings.
FOR MORE INFORMATION
PT Dharma Satya Nusantara Tbk
Jl. Rawa Gelam V Kav. OR/3B
Kawasan Industri Pulogadung
Jakarta 13930, Indonesia