Jakarta–The year-on-year profit of PT Sawit Sumbermas Sarana Tbk (SSMS) rose 33.7%, reaching Rp787.1 billion in 2017. It was mostly driven by the increase in sales by 19%.
“SSMS’ strong performance continued in the first quarter (Q1) of 2018. We produced 348,149 tons of fresh fruit bunches (FFB)–that is a 20% increase compared to Q1 last year. The production of crude palm oil (CPO) and palm kernel oil also increased by 23% and 27% respectively,” said SSMS Chief Financial Officer Nicholas Justin Whittle.
In the press release on Thursday, April 26, 2018, SSMS stated that in 2017 the company maintained its gross, operating, and net margin at a healthy level of 53.2%, 36.6%, and 24.3% respectively, all ahead of 2016 achievements. SSMS also recorded a 34.4% increase in total assets and a 17.3% increase in total equity.
“This consistency helps us build a lasting trust with investors, as reflected by the four-fold oversubscription of SSMS’s global bonds, valued at US$300 million,” Whittle said in the release.
SSMS said that shareholders had approved the agenda in the company’s Annual General Meeting, including Provisions and approval of profit utilization obtained by the company in the financial year that ended on December 31, 2017.
They also approved the appointment of Public Accountant to audit the company’s Financial Statements for the fiscal year 2018 and consented to changes in the company’s Board of Directors and Commissioners.
“The approved agenda will put SSMS in a better position to leverage the continuing growth of the palm oil industry,” said Whittle.
SSMS was confident that it can increase its production moving forward, thanks to its young maturity profile plantation, with an average tree age of 8.6 years. Immature and young mature trees make up to approximately 35% of the total number of trees in SSMS’ entire plantation, reflecting a huge production growth potential.
This profile will help ensure SSMS to remain in a good position in responding to the growing demands for CPO. This is in line with the latest report by Oilworld, a leading market analysis company.
The report projected that the growing demand for CPO would be driven by an increasing demand for food in Asia, especially China and India, increasing oleochemical requirements, increasing awareness of health benefits of palm oil compared to other vegetable oils, as well as increasing use of biodiesel.
“SSMS’ increasing production will contribute to the global supply of sustainable palm oil, which is a market full of opportunities,” added Whittle.
The company announced that it is to launch a Sustainable Landscape program in Kotawaringin Barat, Central Kalimantan. One of the main activities is the sustainability certification assistance for smallholders’ plantations which cover thousands of hectares. The certification will help the smallholders access the sustainable palm oil market, together with SSMS.
The program is part of SSMS’ sustainability commitment as it works toward its mission to realize palm oil’s potential in driving local economic growth, national development, and environment preservation.
SSMS manages an integrated business across 19 palm oil estates, 6 palm oil mills (PKS) and 1 palm kernel oil mill in Pangkalan Bun, Central Kalimantan, Indonesia.