Page 18 - ar2013

IndoAgri is a diversified and vertically integrated agribusiness
group. As at 31 December 2013, our planted acreage covers
276,709 hectares, including 239,921 hectares of oil palm,
21,759 hectares of rubber, 11,645 hectares of sugar cane and
3,384 hectares of other crops in estates across Indonesia. To meet
production capacities, the Group owns and operates 21 palm oil
mills, four crumb rubber processing facilities, three sheet rubber
processing facilities, two sugar mills/refineries, one cocoa mill, one
tea mill and five CPO refineries through its Plantation and Edible
Oils & Fats Divisions.
Expanding its sugar investments and geographical footprint
beyond Indonesia, IndoAgri acquired shareholdings in CMAA
in Brazil, and in RHI in the Philippines through its associate
company, FPNRL in 2013.
The Plantation Division is IndoAgri’s dominant business unit,
contributing over 85% to the Group’s EBITDA.
FINANCIAL HIGHLIGHTS
In line with the broader decline in commodity prices for agriculture
crops, the Group posted total consolidated revenue of Rp13.3
trillion, a 4.1% decline over last year’s Rp13.8 trillion. The sales
performance was adversely affected by lower average prices of
key plantation crops (i.e. palm products and rubber) and lower
edible oils sales.
2013 gross profit declined by 23.5% from Rp4.2 trillion in 2012
to Rp3.2 trillion due primarily to lower average selling prices
for plantation crops. This was further affected by rising wages
and newly matured plantations; contributing to higher unit
production costs.
The Group reported lower profit from operations of Rp1.7 trillion in
2013, a 38.0% decline over last year due mainly to lower gross profit
and foreign exchange losses. This was partly offset by a maiden
profit of Rp64 billion from the Group’s joint venture in Brazil, CMAA.
2013 net profit after tax (NPAT) of Rp0.9 trillion fell 49.8% over
2012 primarily due to lower profits from operations, as well as
lower financial income and higher effective corporate tax arising
from irrecoverable deferred tax losses and higher non-tax
deductible expenses. The Group’s attributable profit declined
50.6% to Rp0.6 trillion in 2013 in line with this.
OPERATIONAL HIGHLIGHTS
Plantation Division: Oil Palm
As at 31 December 2013, the Group’s oil palms occupied 87%
or 239,921 hectares of total planted area. Of this, new plantings
accounted for 9,791 hectares, compared to 13,383 hectares in 2012.
Total FFB production of 3,761,000 tonnes in 2013 represented
a 8% decrease over last year’s 4,107,000 tonnes, while CPO
production fell 8% from 880,000 tonnes to 810,000 tonnes in
2013 on lower palm production in Sumatra and lower purchases
of external FFB.
The Group’s certified CPO production of 248,000 tonnes was
roughly 31% of its total CPO output in 2013, demonstrating the
continued commitment to sustainable agriculture.
Plantation Division: Sugar
The Group’s sugar cane estate in South Sumatra harvested
approximately 758,000 tonnes of sugar cane from 11,645
hectares this year. We continue to work towards a targeted planted
area of 18,000 hectares of sugar cane.
In Central Java, the Group has tolling arrangements with local
farmers, who supply the sugar cane sources for our 4,000 TCD
sugar mill. The Group retains a portion of the sugar and molasses
produced as a milling fee, while the balance of the sales proceeds
is returned to the farmer. In 2013, we processed 438,000 tonnes
of sugar cane.
Through a 50% interest in the CMAA Group acquired in June 2013,
the Group now has access to 42,517 hectares of planted sugar cane
and a total annual cane crushing capacity of 3.0 million tonnes in
Brazil. We also expanded into the Philippines in December 2013
through a 30% investment in FPNRL, which holds 34% stake in
RHI, the largest integrated sugar business in the Philippines.
Altogether, IndoAgri processed 3.8 million tonnes of sugar cane
in 2013.
Plantation Division: Rubber
As at 31 December 2013, our nucleus rubber estates occupy
approximately 21,759 hectares. The Division’s rubber production
was flat at 18,500 tonnes this year due to stagnant land expansion
and some replanting activities.
Edible Oils & Fats Division
In 2013, the Edible Oils & Fats Division processed approximately
869,000 tonnes of CPO (including 59% from our own plantations).
It manages five refineries with a total annual CPO processing
capacity of 1.4 million tonnes.
The Division also produced and sold small amounts of by-
products derived from oil palm refining, such as refined, bleached
and deodorised (RBD) palm stearin and palm fatty acid distillate.
BUSINESS OVERVIEW
14 INDOFOOD AGRI RESOURCES LTD • ANNUAL REPORT 2013