JAKARTA – PT Sawit Sumbermas Sarana Tbk. (SSMS) announced a significant increase in net income for the nine-month period ended September 2017, during a Public Expose at the Financial Club, Jakarta, Thursday (28/12/2017).
“SSMS’s net income grew by 120.3% year-on-year to Rp631.5 billion at the end of September 2017, driven by an increase in our production volume, which lifted sales by 36.9% year-on-year to Rp2.4 trillion,” said SSMS Chief Financial Officer, Nicholas J. Whittle, adding that the company maintained Gross Margin, Operating Margin and Net Margin at healthy levels of 54.2%, 36.9%, and 26.5% respectively, all significantly ahead from 2016.
SSMS owes its strong growth to its plantation profile, which mainly consists of oil palms in the high-growth, young-mature phase. As per September 2017, SSMS had an average Fresh Fruit Bunches (FFB) yield of 14.6 MT/Ha, well ahead of the industry average of 13.5 MT/Ha. This led SSMS to book FFB production of 938,025 MT for the period, or up by 37.1% from the previous year.
“Our maturity profile, supported by application of best management practices to increase productivity, has secured SSMS’s position as one of Indonesia’s highest-yielding palm oil producers,” Whittle said. “At the same time, of the 97,335 Ha area we own, we have cultivated only 70,840 Ha, leaving us ample room to grow our production further in the coming years.”
In line with the growth in FFB yield and production, the company’s average Crude Palm Oil (CPO) yield of 5.5 MT/Ha, well above the industry average of 4.0 MT/Ha., led to high CPO production of 262,356 MT as per September 2017, an increase of 36.5% year-on-year.
“We are thus well positioned to help answer the continuously growing demand for palm oil globally, primarily driven by growing food demand in Asia – particularly China and India – increasing awareness of palm oil’s health benefits, and additional biodiesel use,” said Whittle. “These further underline the importance of realizing palm oil’s potential as the most affordable plant-based oil with the highest yield-to-land consumption ratio.”
He added, “Integral to achieving this goal is our strategy to run a sustainable business, in which we leverage palm oil’s potential to bring value to all relevant stakeholders.”
Earlier this year, SSMS published its new Sustainability Policy to serve as the foundation of its business. The policy resulted from a close collaboration with independent sustainability consultants and other stakeholders.
SSMS Head of Sustainability, Desi Kusumadewi, said, “We strive to keep the three pillars of Profit, People, and Planet in a virtuous cycle at the heart of our business strategy. Without profit, we can’t do anything for either the people or the planet. Correspondingly, if we don’t do the right thing for our people and planet, in the long run there will be no profit.”
Based on this premise, SSMS is committed to mapping the risks related to land acquisition before conducting HCV assessments, continuing to assess and identify gaps in its current operations, publish all HCV maps on its website, and provide a dedicated section on its website to update stakeholders on its sustainability efforts.
“We are glad to see that our strategy, which is to run a sustainable business that leverages palm oil’s potential to bring value for all stakeholders, has started to impact positively. This refers to not only the strong financial results and growth in production, but also our ability to help drive socio-economic development in our surrounding communities, as well as purchasing and co-managing an area of almost 2,000 hectares in Salat Island for orangutan conservation alongside Borneo Orangutan Survival Foundation,” said Kusumadewi.