Thursday, February 25, 2016

PT United Tractors Tbk (“the Company”) today announced its consolidated financial statements for the financial year 2015. In the report, the Company recorded consolidated net revenue during 2015  decreased by 7% to Rp49.3 trillion compared to Rp53.1 trillion in 2014. The continuance decrease of coal price has led the Company to assess the carrying value of its coal mining properties and other related assets. The net impact of the impairment loss charged to profit after tax was Rp2.6 trillion (2014: Rp1.5 trillion). These factors have led to a decrease in Company’s net profit, which was recorded at Rp3.9 trillion, down 28% from Rp5.4 trillion in 2014. Excluding the impact of  impairment loss recorded in relation to coal mining properties and other related assets, the Company recorded net income of Rp6.4 trillion (2014: Rp6.9 trillion) or 7% lower.

Construction Machinery Segment

Construction Machinery segment recorded a decrease in Komatsu sales volume by 40% to 2,124 units from 3,513 units in 2014. The decrease in sales of heavy equipment occured in all sectors and this condition was reflected in market volume of heavy equipment in Indonesia which was also decreased. However, Komatsu is still ranked as market leader in heavy equipment with 36% domestic market share (according to internal market research). On the other hand, the amount of spare parts sales and heavy equipment maintenance services increased by 2% to Rp6.1 trillion, due to customers’ need to maintain the life cycle of heavy equipment. Overall, total revenue of Construction Machinery segment during 2015 recorded a decrease to Rp13.6 trillion or down 9%.

Mining Contracting Segment

The Company operates its Mining Contracting segment through PT Pamapersada Nusantara (“PAMA”) which recorded a 9% decrease in net revenue of Rp30.5 trillion compared to Rp33.5 trillion in 2014. This result was due to decreased coal production volume by 4% from 113.5 million tons to 109.0 million tons, with overburden removal down 5% from 806.4 million bcm to 766.6 million bcm.

Mining Segment

The Company’s Mining segment was operated by PT Tuah Turangga Agung. Total coal sales volume in 2015 decreased by 18% to 4.6 million tons, compared to 5.7 million tons in 2014. This has caused a decrease in revenue of Mining segment by 18%, from Rp4.7 trillion to Rp3.8 trillion.

Construction Industry Segment

The Construction Industry segment was represented by PT Acset Indonusa Tbk (“ACST”), which was acquired in 2015 with 50.1% share ownership. In 2015, ACST booked net revenue of Rp1.4 trillion and net profit of Rp42 billion. The year performance was mainly driven by lower new contract obtained in 2014 which was only Rp616.0 billion. However, during 2015, ACST has been awarded new contracts as much as Rp3.1 trillion, an increase of 400% compared to full year 2014. Among others, at the moment ACST holds contracts for Thamrin Nine project, West Vista apartment, Indonesia 1 project, Astra Biz Centre at Bumi Serpong Damai, toll gate Mojokerto – Kertosono and renovation of toll gate Cilegon Barat.

Prospects and Expansion Plans

The declining price of coal has led to the decrease of heavy equipment sales, coal production and overburden removal. To mitigate these condition, the Company has undertaken several initiatives to reduce dependence on the coal industry and balance its portfolio. Several initiatives have been taken by the Company during 2015, among others were the establishment of the fourth pillar in the area Construction Industry  through the acquisition of PT Acset Indonusa Tbk, as well as exploring opportunities in power plant project by collaborating with Sumitomo Corporation and Kansai Electric Power Co., Inc. to develop and expand the Tanjung Jati B unit 5 and unit 6 power plant projects in Jepara, Central Java, with a total power generation capacity of 2×1,000 MW.

Through these efforts and with strong balance sheet and liquidity, the Company is expected to nurture growth for the future and maintain a balanced portfolio.