CKRA eyes Rp 382.5b additional revenue from divestment

Publicly-listed plantation company PT Citra Kebun Raya Agri (CKRA) expects to earn Rp 382.5 billion (US$42.5 million) this year from the divestment of its subsidiary, PT Horizon Agro Industry.

CKRA signed an agreement with PT Rajawali Agro Nusantara for the sale of 99.99 percent of shares in Horizon Agro Industry on Nov. 24. CKRA sold the company for Rp 750 billion.

CKRA’s director Yudhi Asmara Yasmine said there would be two payment tranches, the first to be made on Dec. 30, pending approval from a shareholders meeting earlier in the day.

“This year, we will realize the sale of 51 percent of the shares. The remaining shares will be sold in 2012,” Yudhi said.

Yudhi added that the first-stage transaction would be noted as non-operational revenue in the company’s fourth-quarter financial report this year.

CKRA booked a net profit of Rp 8.66 billion in the first nine months of the year after suffering a net loss of Rp 41 billion in the same period last year. CKRA’s revenue from sales stood at Rp 131.89 million in the first three quarters of the year after zero sales in the same period last year.

The company booked higher net profits than revenue earned because it enjoyed non-operational income of Rp 13.24 billion in the first nine months of the year, increasing significantly from Rp 619 million in the same period last year. The main contributors to the growing non-operational revenue were earnings from bond interest of Rp 5.6 billion and from asset revaluations of Rp 7.72 billion.

CKRA sold its shares in Horizon Agro Industry in order to change its core business from plantations to trade and mining.

The company has signed an agreement for the acquisition of iron ore miner PT Persada Indo Tambang on Nov. 24. CKRA will purchase an 88 percent shareholding in Persada Indo Tambang in a transaction worth Rp 500 million.

“We are waiting for approval from shareholders and also the Capital Market and Financial Services Supervisory Agency (Bapepam-LK). We hope to complete the acquisition process in less than 12 months after shareholders approve the plan,” Yudhi said.

The remainder of funds from the share divestment, Yudhi said, would be used to acquire other companies that would support the company’s new focus of business. She declined to elaborate on her company’s further acquisition plans.

Persada Indo Tambang owns a 2,936-hectare iron ore mine in Nagari Sungari Kunyit, Sangir Balai Janggo district, West Sumatra. Persada Indo Tambang began operations this year with a potential capacity of 8,000 metric tons per month. Production had reached 24,326 metric tons as of Sept. 30.

Yudhi said that CKRA aimed to boost Persada Indo Tambang’s capacity to 45,000 metric tons per month by 2017.

“We hope that Persada Indo Tambang will contribute significantly to our company,” she said.

According to Yudhi, Persada Indo Tambang sells its products overseas, mainly to China. (rcf)