PT Sinar Mas Agro Resources and Technology Tbk : Third Quarter 2022 SMARTnews

Smartnews - September 2022

• SMART achieved a strong set of results with EBITDA reaching Rp 6.66 trillion and Net Profit doubling to Rp 3.59 trillion
• Our strategy in focusing on integrated business model and higher value-added products has supported SMART's excellent performance

PLANTATION STATISTICS

As of 30 September 2022, the Company's palm plantation area stood at approximately 136,900 hectares, comprising 130,900 hectares of mature estates and 6,000 hectares of immature estates. Nucleus and plasma estates amounted to 105,500 and 31,400 hectares, respectively.

Description	Ytd Sep-22	Ytd Sep-21	Change
FFB produced - MT	1,855,637	1,910,367	-3%
CPO produced - MT	424,935	431,452	-2%
PK produced - MT	116,598	116,676	-0.1%
Oil extraction rate - %	20.8	21.1	-0.3%
Kernel extraction rate - %	5.7	5.7	-

During the nine-month period ended September 2022, SMART's fruit production decreased slightly by 3% to 1.86 million tonnes, from last year's high base of production that experienced a rebound after the El Niño condition. The production was also impacted by high rainfalls and old estates being prepared for replanting. Accordingly, CPO and PK production saw a modest decline to 425 thousand and 117 thousand tonnes, respectively. Oil and kernel extraction rates stood at 20.8% and 5.7%, respectively.

FINANCIAL PERFORMANCE
In billion Rupiah	Ytd Sep-22	Ytd Sep-21	Change
Net sales	57,036	40,380	41%
Cost of goods sold	46,669	32,517	44%
Gross profit	10,367	7,863	32%
Income from operations	4,569	2,570	78%
EBITDA	6,663	4,100	63%
Net profit attributable to owners of the
parent company	3,586	1,795	100%

Net sales for the nine-month period ended 30 September 2022 expanded by 41% to Rp 57.04 trillion, resulting from a combination of appreciation in average selling prices and higher sales volume. CPO market prices (FOB Belawan) increased by 23% year-on-year, averaging US$ 1,368 per MT during nine-month period of 2022.

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Most of our revenue came from refined branded and unbranded products (including biodiesel and oleochemicals), which accounted for 85% of total sales. CPO and other non-refined product sales represented the remaining 15%. This is in line with our strategy to focus our sales on higher value-added products.

Cost of goods sold increased by 44% to Rp 46.67 trillion from Rp 32.52 trillion in the previous year's period as purchases of raw materials increased in line with expanded sales.

Gross profit grew significantly from Rp 7.86 trillion to Rp 10.37 trillion during the current period. Income from operations reached Rp 4.57 trillion, contributed from higher gross profit that was partly offset by higher operating expenses. The increase in selling expenses was mostly attributable to higher transportation expenses in line with higher sales volume, while export tax and levy charges decreased as the Government of Indonesia temporarily exempted the levy charges starting mid of July 2022 to induce exports. The increase in general and administrative expenses mainly came from salaries, wages and employees' benefits.

Corresponding to the increase in income from operations, the Company's EBITDA grew by a substantial 63% year-on-year to Rp 6.66 trillion. Net profit attributable to owners of the parent company doubled to Rp 3.59 trillion, which translated into earnings per share of Rp 1,249.

FINANCIAL POSITION
In billion Rupiah	30-Sep-22	31-Dec-21	Change
Assets	42,884	40,345	6.3%
Liabilities	25,644	25,927	-1.1%
Equity attributable to owners of the parent
company	17,227	14,407	19.6%

As of 30 September 2022, the Company's total assets increased by 6.3% to Rp 42.88 trillion from Rp 40.35 trillion at the end of 2021. The increase was mainly attributable to higher trade accounts receivable and inventories, as well as increase in investment in shares of stocks contributed from PT Sumber Indahperkasa's share in earnings.

Total liabilities as per end of September 2022 stood at Rp 25.64 trillion, slightly lower compared to that at the end of 2021. The decrease primarily came from the payment of short-term bank loans, which was partly offset by new long-term loans and the issuance of bonds on the Indonesia Stock Exchange in February and July 2022. As of 30 September 2022, bank loans (including bonds payable) totaled Rp 19.83 trillion with a low net gearing1 of 0.07x.

• Total borrowings less cash and cash equivalents less liquid working capital divided by total equity

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Total equity attributable to owners of parent company increased to Rp 17.23 trillion as of 30 September 2022, from Rp 14.41 trillion at the end of 2021. The Company's retained earnings expanded to Rp 14.49 trillion compared to Rp 11.78 trillion as at end 2021 resulting from the current period's income, partly offset by final cash dividend distribution for 2021 earnings and interim cash dividend distribution for 2022 earnings.

For further information, please contact:

Investor Relations Team [e-mail]

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