PT Sinar Mas Agro Resources and Technology Tbk : Half Year 2023 SMARTnews

Smartnews - June 2023

• SMART's revenue in the first half 2023 declined by 10% year-on-year, as expanded sales volume partly compensated for much lower CPO market prices
• First half 2023 EBITDA reached almost Rp 1.7 billion with a healthy margin of 5.2%

PLANTATION STATISTICS

As of 30 June 2023, the Company's palm plantation area stood at approximately 137,500 hectares, comprising 130,700 hectares of mature estates and 6,800 hectares of immature estates. Nucleus and plasma estates amounted to 106,200 and 31,300 hectares, respectively.

Description	1H 2023	1H 2022	Change
FFB produced - MT	1,064,506	1,117,035	-5%
CPO produced - MT	247,071	258,568	-4%
PK produced - MT	68,139	71,453	-5%
Oil extraction rate - %	20.5	20.9	-0.4%
Kernel extraction rate - %	5.6	5.8	-0.2%

SMART's fruit production decreased by 5% to 1.06 million tonnes for the first semester of 2023, impacted by high rainfalls in Kalimantan and old estates being prepared for replanting. As a result, CPO and PK production declined to 247 thousand and 68 thousand tonnes, respectively, whilst oil and kernel extraction rates decreased to 20.5% and 5.6%, respectively.

FINANCIAL PERFORMANCE
In billion Rupiah	1H 2023	1H 2022	Change
Net sales	32,618	36,105	-10%
Cost of goods sold	29,459	29,037	1%
Gross profit	3,159	7,068	-55%
Income from operations	557	2,940	-81%
EBITDA	1,692	3,922	-57%
Net profit attributable to owners of
the parent company	284	1,925	-85%

Despite much lower average selling prices, first half 2023's net sales decreased by only 10% year-on-year to Rp 32.62 trillion, partially offset by higher sales volume. CPO market prices (FOB Belawan) during the current period subsided by 41% year-on-year, averaging at US$ 949 per MT from a high base of US$1,595 per MT in the first half 2022.

Most of our revenue came from palm-based derivative products, i.e. refined branded and unbranded products (including biodiesel and oleochemicals), which accounted for 79% of total sales. CPO and other non-refined product sales represented the remaining 21%.

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Cost of goods sold for the six-month period ended 30 June 2023 increased slightly to Rp 29.46 trillion from Rp 29.04 trillion in the previous year, mainly from higher fertiliser prices.

Income from operations for the current first semester was lower by 81% to Rp 557 billion due to the decrease in gross profit, partially offset by the decrease in operating expenses. The decrease in operating expenses was primarily attributable to lower export tax and levy charged.

Corresponding to the decrease in income from operations, the Company booked a lower EBITDA of Rp 1.69 trillion from Rp 3.92 trillion in the first semester 2022. As a result, net profit attributable to owners of the parent company stood at Rp 284 billion, which translated into earnings per share of Rp 99.

FINANCIAL POSITION
In billion Rupiah	30-Jun-23	31-Dec-22	Change
Assets	37,556	42,601	-12%
Liabilities	19,191	23,353	-18%
Equity attributable to owners of the parent
company	18,352	19,235	-5%
Debt to Equity ratio (times)	0.83x	0.95x

As of 30 June 2023, the Company's total assets decreased by 12% to Rp 37.56 trillion from Rp 42.60 trillion at the end of 2022. The decrease was mainly attributable to lower trade accounts receivable as well as cash and cash equivalents.

Total liabilities as per end of June 2023 stood at Rp 19.19 trillion, 18% lower compared to that at the end of 2022. The decrease primarily came from the settlement of bank loans and bonds payable. As of 30 June 2023, bank loans (including bonds payable) totaled Rp 15.20 trillion with gearing further improving to 0.83x.

Total equity attributable to owners of parent company decreased to Rp 18.35 trillion as of 30 June 2023, from Rp 19.23 trillion at the end of 2022. The Company's retained earnings was lower at Rp 15.65 trillion compared to Rp 16.46 trillion as at end 2022 primarily due to dividend distribution for 2022's net profit, which was partly offset by addition from the current period's income.

For further information, please contact:

Investor Relations Team [e-mail]

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