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Saratoga remains cautious after lackluster 2013

Private investment firm PT Saratoga Investama Sedaya (SRTG) hopes to see its bottom line end positively this year after suffering from massive net losses during the first nine months of 2013 as a result of foreign-exchange (forex) volatility

Tassia Sipahutar (The Jakarta Post)
Jakarta
Wed, January 22, 2014

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Saratoga remains cautious after lackluster 2013

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rivate investment firm PT Saratoga Investama Sedaya (SRTG) hopes to see its bottom line end positively this year after suffering from massive net losses during the first nine months of 2013 as a
result of foreign-exchange (forex) volatility.

Saratoga chief financial officer Jerry Go Ngo said on Tuesday the investment company would focus on improving its costs and process management, which he claimed was indispensable to the firm'€™s sustainability.

Besides costs and management process improvements, the firm '€” founded by businessmen Edwin Soeryadjaya and Sandiaga Uno '€” will also maintain its activities in the money market to prevent rupiah volatility from pushing its bottom line even lower.

As previously reported, rupiah depreciation had taken a toll on the firm'€™s January to September 2013 performance even though it booked higher revenues.

Its revenues rose 32.2 percent to Rp 2.27 trillion (US$187.43 million), but Saratoga posted Rp 35.36 billion in net losses, a downturn from a net profit of Rp 1.76 trillion during the same period in 2012. The company has not issued its full-year financial reports.

Ngo, however, downplayed the situation, saying that it was actually accounting losses, and not realized losses.

'€œThe market for swap is a bit unusual at the moment. So we'€™ve been going to the spot market. We'€™ve been buying [forex] and accumulating sufficiently to serve our needs,'€ he said on Tuesday, adding that the company was actively tracking swap points as well.

Spot is a foreign currency exchange agreement between two parties within a two-day time frame, while swap is defined as an agreement in which the parties involved agree to re-exchange funds in their original currencies after a specified time period, using a pre-determined rate.

A document recently submitted to the Indonesia Stock Exchange (IDX) said that as of December 2013, Saratoga had a total of $323.12 million in forex-denominated loans that would mature within five years. About $31.65 million of that figure is due in 2014. Meanwhile, Saratoga currently has 17 subsidiaries and investee companies, nine of which are public companies in Indonesia and overseas.

The Indonesia-listed companies include coal miner PT Adaro Energy (ADRO), plantation firm PT Provident Agro (PALM), telecommunications tower operator PT Tower Bersama Infrastructure (TBIG) and automotive firm PT Mitra Pinasthika Mustika (MPMX).

Sandiaga previously said that it was grooming power company PT Medco Power Indonesia and oil refinery firm PT Tri Wahana Universal to be the next firms to float their shares on the stock market.

However, according to Saratoga business development director Michael Soeryadjaya, neither Medco Power nor Tri Wahana will be going public this year.

'€œWe did three IPOs [initial public offering] last year, including Saratoga'€™s own IPO. In 2014, we want to focus more on growing. Besides, the companies [Medco Power and Tri Wahana] are still doing well and are stable,'€ he said.

He added that business was predicted to improve for both Adaro and Provident, citing improvements in coal and crude palm oil prices.

By the end of September, Saratoga'€™s total assets amounted to Rp 14.37 trillion. Its liabilities and equities reached Rp 4.17 trillion and Rp 10.2 trillion, respectively.

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