Harum Energy to sell 650m shares in IPO

One of Indonesia's thermal coal miner PT Harum Energy Tbk, controlled by Indonesian tycoon Kiki Barki, plans to dispose 650 million shares or 24.7% during initial public offering (IPO) scheduled on October 6 2010.

Based on the IPO prospectus published today, Harum Energy has mandated two lead underwriters PT Ciptadana Securities and PT Mandiri Sekuritas.

Harum Energy also determined to provide green shoe or over allotment of a maximum 65 million shares during the IPO when the market demand outstrips the IPO size.

Harum Energy plans to use the IPO proceed worth US$50 million to develop coal production in its subsidiary dubbed PT Santan Batubara, which also subsidiary of PT Indika Energy Tbk (INDY), in 2010 and 2011.

About US$30 million of the proceed will be utilized by Harum Energy to bankroll business development, maintenance, and purchase of 20 boats to jack up coal capacity transportation in 2010 and 2011.

The company also plans to use US$15 million of the proceed for working capital, including coal mining contractor belong to its subsidiary in 2011 and 2012. A certain amount of the remaining proceed will be used to exploration, pay some of DBS debt facility, and support acquisition and other projects.

Harum Energy posted Rp894.7 billion revenue in the first quarter of this year. In 2009, it booked Rp4.60 trillion revenue. Operating profit reached Rp163.6 billion in the first quarter of this year and Rp134.1 billion net profit. 

Post IPO, PT Karunia Bara Perkasa will control 75.84% stakes in Harum Energy, PT Bara Sejahtera Abadi to hold 0.09%, and the public share holders will hold 24.07% (excluding green shoe).

Disclosure: No position at the stock mentioned above.

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Antam 1H net profit remains intact

State-owned nickel miner PT Aneka Tambang Tbk (ANTM) today announces strong net profit and robust operating profit despite a slight decrease revenue.

In the financial statement published today, Antam's net profit jumped 237.98% from Rp223.77 billion or Rp23.47 per share in the first half of last year to Rp756.30 billion or Rp79.42 per share, mainly contributed by soaring operating profit and a steep drop in cost of goods sold (COGS).

Antam booked Rp1.09 trillion operating profit in 1H 2010 from Rp198.98 billion a year earlier, reflecting lower COGS of 26.52% from Rp3.96 trillion to Rp2.91 trillion.

The company's net sales slightly decreased from Rp4.41 trillion in 1H 2009 to Rp4.32 trillion in 1H 2010.

In a morning notes distributed by PT Mandiri Sekurita today, due to the switch in revenue contribution from low-margin gold trading last year to higher margin nickel this year as well the improvement in selling prices of the latter, Antam’s 1H 2010 net income improved by 238% yoy to Rp756billion, despite a relatively flat top-line of Rp4.3 trillion(-2.1% yoy), thus running ahead of ours and consensus estimates. 

Additionally on the production side, the divisional production remains within FY10F target with nickel and gold production rates achieving 50% and 54% of FY10F. 

Currently, the stock trades at PER10F 16.7x. Additional upside would come from the appreciation of nickel prices (at US$20,600/t as of 1H 2010) which runs at par with our FY10F price assumption of about US$21,000/ton.

Disclosure: No position at the stock mentioned above.

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Citra Tubindo 1H net profit dips 61%

Publicly listed service provider for oil tubular goods PT Citra Tubindo Tbk's first half net profit slashed 61.77% from US$8.92 million to US$3.41 million because revenue drop of 31.84% and soaring net other charges, mostly contributed by interest charges and foreign exchange loss.

The company today, in the first half financial statement, reports a 938.33% drop in net other income from US$295,737 in 1H 2009 to net other charges of US$2.48 million.

Interest charges ballooned from US$1.32 million in 1H 2009 to US$2.01 million in 1H 2010, while the company suffered foreign exchange loss of US$937,320 in 1H 2010, a reversal from US$296,400 forex gain a year earlier. 

Citra Tubindo's operating profit was also dragged down by 34.29% from US$12.19 million in 1H 2009 to US$8.01 million in 1H 2010.   

Despite a sharp drop in revenue by 31.84% from US$135.90 million to US$92.63 million in 1H 2010, Citra Tubindo posted a higher operating expenses by 72.61% from US$6.79 million in 1H 2009 to US$11.72 million.

Disclosure: No position at the stock mentioned above. 

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Bumi Resources 1H net profit drops 30%

Indonesia's largest thermal coal producer PT Bumi Resources Tbk (BUMI) today reports a 30.01% drop in its net profit in the first half of 2010 as a result of ballooning interest and financial charges by 437.90. But, the company remained positive in revenue growth. 

In the financial statement published today, Bumi booked US$134.58 million net profit in 1H 2010 from US$192.29 million a year earlier.

Interest and financial charges ballooned 437.90% from US$47.86 million in 1H 2009 to US$257.44 million in 1H 2010. But, Bumi compensated the interest jump with income from divestment worth US$171.67 million.

In the operational line, Bumi remained positive in operating profit. The company posted a 5.41% higher operating profit from US$504.56 million in 1H 2009 to US$531.84 million.

But, take a look Bumi's operating margin. The margin shrank to 24.87% in 1H 2010 from 29.50% in 1H 2009 on the back of soaring operating expenses by 16.90% and cost of goods sold (COGS) by 36.97%.

During the first 6 months in 2010, Bumi's COGS soared 36.97% from US$984.35 million in 1H 2009 to US$1.35 billion in 1H 2010. These costs have reduced Bumi's operating margin. Bumi's revenue rose 25.15% from US$1.71 billion in 1H 2009 to US$2.14 billion in 1H 2010.   

What brokerage said about Bumi's 1H performance?

In a morning notes published by PT Mandiri Sekuritas today, discussing BUMI is not about discussing its operational performance. 

"Their operational performances are inline with our expectation with a positive bias toward 2H 2010." the notes said.

However debt is still worrying. BUMI recorded a US$89.9 million (vs 1H 2009: US$17.3 million) contribution in equity net income of associated companies, less than additional burden taken from ballooning debt and rising interest payment from US$4,189.8 million debt. 

BUMI paid US$257.44 million in financial charges (vs 1H 2009:  US$47.9 million). Therefore main concern is the state of its financial burden. 

In 1H 2010, BUMI increased its asset sales to US$171.7 million (1Q 2010: US$93.7 million), balancing the interest payment. Bumi also suffered US$60 million in derivative book losses. The derivative losses according to the company is in relation with its options contract for its convertible bonds issuance.

Disclosure: No position at the stock mentioned above.

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Bakrie Telecom 1H net profit sinks 96%

Publicly listed CDMA-based operator PT Bakrie Telecom Tbk (BTEL)'s net income in the first half of 2010 sank 96.29% to Rp2.7 billion from Rp72.8 billion same period last year.
In the financial statement submitted to Indonesia Stock Exchange, the net income downfall was occurred because of higher financial burden for about 95.3% to Rp206.3 billion compared to last year first semester which was Rp105.6 billion.
In the second quarter of 2010, the company issued global bond for about US$250 million to refund their syndicated loan and capital expenses for Internet broadband wireless access (BWA) service.
Operating revenue rose 3.1% from Rp1.66 trillion to Rp1.72 trillion. Operating income in 2010's first half grew 10.1% or rose from Rp158.6 billion to Rp174.6 billion.
The increase was occurred because of smaller operating and maintaining expenses ratio, administrative, also sales and marketing revenue.
Besides operating income, EBITDA (earning before interest, tax, depreciation and amortization) also rose 17.7% from Rp613.8 billion to Rp722.5 billion. Thus, EBIDTA margin lifted from 36.8% to 42%.
At the end of June 2010, the CDMA subscribers reached 11.1 million or growth 24.7% from 8.9 million on last June. 

Disclosure: No position at the stock mentioned above.

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Borneo Energy files Rp3 trillion IPO

PT Borneo Lumbung Energy & Metal, parent company of coking coal PT Asmin Koalindo Tuhup, has filed documents of Rp2 trillion-Rp3 trillion initial public offering to Indonesia Stock Exchange (IDX).
"We have received IPO documents from Borneo last week. They propose to offload 25% stakes," said IDX Director Eddy Sugito said today.
According to him, Borneo management plans to present a mini expose to IDX. Borneo Energy has mandated three lead underwriters, CIMB Securities Indonesia, Credit Suisse Securities Indonesia, and Morgan Stanley. 

Disclosure: No position at the stock mentioned above.

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Adaro suffers 49% drop in net profit

One of Indonesia's coal miner PT Adaro Energy Tbk today announces a 49% drop in net profit as a result of lower revenue and higher cost of goods sold (COGS).
In an official press release distributed today, Adaro booked Rp1.15 trillion net profit in the first half of this year from Rp2.25 trillion a year earlier.

Operating profit tumbled 28% from Rp4.93 trillion in the first half of last year to Rp3.57 trillion in the first half of 2010.
Adaro's COGS increased 8% from Rp7.45 trillion in the first half of last year to Rp8.04 trillion. The company's operating revenue fell 7% from Rp12.89 trillion to Rp11.98 trillion in the first half of this year.
Coal production increased 20% from 17.99 million tons to 21.62 million tons, while coal sales volume rose 20% from 17,83 million tons to 21.75 million tons.
Adaro President Director Garibaldi Thohir said the performance decrease in the first half of 2010 had been estimated.
"Despite higher sales, heavy rainfall in the first half of 2010 had influenced our revenue and net profit. We hope average selling price might increase in the second half of this year," he said. 

Disclosure: No position at the stock mentioned above.
 
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Timah 1H net profit sky rockets 653%

State-owned tin miner PT Timah Tbk (TINS) today reports a 653.04% jump in net income in the first half of this year on the back of higher refined tin average and lower cost of goods sold (COGS).
In the first half financial report submitted to Indonesia Stock Exchange (IDX), Timah booked Rp322.3 billion net profit in the first half of this year from Rp42.8 billion a year earlier.
The company obtained 45% higher refined tin average from US$12,087 to US$17,529. Timah produced 19,502 metric tons of refined tin in the first half of this year and 19,760 metric tons of sales. It produced 19,376 metric tons of refined tin in the first half of last year and 24,321 metric tons of sales.
The company's EBITDA sky rocketed 1,000.4% from Rp50 billion in the first half of last year to Rp550.2 billion.
Operating profit jumped 140.10% from Rp172.8 billion in the first half of last year to Rp414.9 billion.
Timah posted 3.16% lower cost of goods sold from Rp3.16 trillion to Rp3.06 trillion in the first half of this year. Sales slightly increased 5.93% from Rp3.54 trillion in the first half of last year to Rp3.75 trillion.

Disclosure: No position at the stock mentioned above.

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BW Plantation 1H profit dips 20.14%

Palm oil plantation player PT BW Plantation Tbk (BWPT) today announces a 20.14% drop in net profit in the first half of this year on the back of revenue shrinking.
In the financial statement submitted to Indonesia Stock Exchange (IDX) today, BW Plantation posted Rp85.55 billion net profit or Rp21.19 per share in 1H 2010 from Rp107.13 billion or Rp34.12 per share a year earlier.
In line with bottom line drop, BW Plantation's operating profit slumped 28.07% from Rp172.21 billion in the first half of last year to Rp123.87 billion in the first half of 2010. In return, the company's operating margin fell from 55.13% in the first half of last year to 44.93%. Gross profit also shrank 21.65% from Rp210.38 billion in 1H 2009 to Rp164.84 billion.
Despite lower revenue, BW Plantation's cost of goods sold increased 8.68% to Rp110.84 billion in 1H 2010 from Rp101.99 billion a year earlier. Revenue dipped 11.75% from Rp312.37 billion in the first half of last year to Rp275.67 billion.

Disclosure: No position at the stock mentioned above.

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Adaro targets 80 mio tons coal output

One of Indonesia's coal producer PT Adaro Energy Tbk (ADRO) targets 80 million tons of coal production by 2015, almost double than output target this year of 45 million tons-46 million tons.

In a morning notes issued by PT Mandiri Sekuritas, to support the target, ADRO plans to build 68 km lenght of overland conveyor belt in stages and also to build 2x30 MW capacity of power plant located in mouth of the mining site.

The conveyor belt is scheduled to be initiated in early 2011 with capacity of 40 million tons and expected to contribute saving cost amounting to US$1.5 per ton to production cost.

The company produce 21.6 million tons of coal in the first half of this year or 47% of 2010's target. The stock trades at PER 10F-11F of 16.5x and 12.2x,

Disclosure: No position at the stock mentioned above.

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United Tractors sets 10 mio tons coal

Publicly listed heavy equipment distributor, coal mining, and coal mining contractor PT United Tractors Tbk (UNTR) plans to produce 10 million tons of coal in the next 4-5 years.

United Tractors Corporate Secretary Sara K. Loebis said the company's coal capacity is currently around 3.2 million tons annually. About 2.5 million tons is coming from coal mining owned by PT Pamapersada Nusantara, UNTR wholly owned subsidiary, and 700,000 tons from PT Tuah Turangga Agung.

According to her, as reported by Kontan daily, output capacity of Tuah Turangga will increase to 1.5 million tons-1.7 million tons next year.

PT Agung Bara Prima, which was acquired by Tuah Turangga Agung, is estimated to produce 1 million tons of coal in 2012.  United Tractors is considering to acquire 1 million tons of coal company.

Disclosure: No position at the stock mentioned above.  

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Adavale acquires Mitra Perkasa Abadi

Australian resources-based company Adavale Resources Limited and Adavale Indonesia Pty Ltd have agreed to acquire 100% stakes in PT Prima Perkasa Abadi.

Adavale has acquired stakes in Prima Perkasa Abadi from three individual sellers namely Sunoto, Arman, and Zukriyansyah.

After the acquisition, Adavale Resources will control 90% stakes in Prima Perkasa Abadi, headquartered in Padang, Sumatra, and Adavale Indonesia Pye Ltd to own the remaining stakes.

In 2009, Adavale acquired the rights to two thermal coal projects, Tapan and Jambi, in Sumatra Indonesia from PT United Mining and Engineering Services and is currently finalizing full acquisition of the United entities in Australia and Indonesia.

Disclosure: No position at the stock mentioned above.  

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FREN & Smart eye 10 mio subscribers

Publicly listed CDMA-based operator PT Mobile-8 Telecom Tbk (FREN) and its partner PT Smart Telecom have set a rise in subscribers target from 6 million subscribers to 10 million subscribers.

Smart Telecom President Director Sutikno Widjaja said the operator has 3 million subscribers, while Mobile-8 President Director Merza Fachys has 3 million subscribers.

"By the end of this year, we estimate that our subscribers could rise to 10 million from current position of 6 million subscribers," Sutikno said.

According to him, synergies between Smart and Mobile-8 will be intensified to reach subscribers target and average revenue per users.

Disclosure: No position at the stock mentioned above.  

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Jababeka to obtain US$40 mio loan

The power plant’s supply assurance is knocking at the door. The syndicated loan lenders have indicated to recommit on the company’s power plant project, which would pave the way for PT Jababeka Tbk (KIJA) to obtain the remaining US$40 million disbursement in the near term, for them to be able to complete the power plant project and partly (US$20 million) used to repay the bridging loan from CIMB-Niaga.

At the same time, Bekasi Power’s long-term contract with PLN is nearing finalization, as the urge of supply needs coming from t he area. 

After such prolonged negotiation, the US$106 million syndicated loan lenders have signified to recommit on the power plant project, where this may lead the CIMB-Niaga as the lender of the matured bridging loan facility (US$35 million equity financing & US$20 million debt) to drum down its earlier call of KIJA’s divestment on the power plant ownership.

"We view this as the guide to positive end result for KIJA, considering the bank’s role as also the lead manager of the loan syndication," said a company report published by PT Mandiri Sekuritas recently.

In the mean time, the long term contract with PLN for being the sole-buyer of the power plant supply is a one step away, as the only previous impediment concerning on operational area license has already been secured by early June.

Thus, there will be no other reason for PLN not to appoint Jababeka, considering the absence of other alternative supplier within the area. We think that long term contract with PLN, in addition, will also give more reason for KIJA’s lenders to retain the power plant in favor of KIJA.

"We believe that the two events will be the crucial trigger to smoothen the completion of the power plant project and eventually secure the full-ownership," the report said.

Jababeka would potentially obtain some US$80 million of annual power revenues (US$48 million of EBITDA), which expected to contribute 75% of total revenue onwards.

"Our rolling 2011 valuation stands KIJA at Rp455 per share. We call Buy with maintain target price Rp265 per share, currently trades at 80% discount to our NAV11F and PER11F of 5.4x, on the assumption of full operations of the power plant," the report said.

Disclosure: No position at the stock mentioned above. 

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Toyota Astra Finance launches MTN

Leasing company PT Toyota Astra Finance has issued Rp1 trillion medium term notes (MTN), maturing in 2 and 3 years.

Toyota Astra Finance Corporate Legal Cokro Fera said, as reported by Kontan daily, the company has launched MTN and sold them to strategic investors.

The company's A series MTN will due in August 27 2013, bearing 7.88% annual interest rate, while B seriues MTN will mature on November 26 2010.

Disclosure: No position at the stock mentioned above. 

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Kalbe Farma downsizes sales target

One of Indonesia's largest pharmaceutical company PT Kalbe Farma Tbk (KLBF) has downsized 2010's sales target, following disposal of its subsidiary PT Kageo Igar Jaya Tbk (IGAR) to PT Kingsford Holdings at Rp185 per share.

Initially, Kalbe Farma set a 13%-15% sales growth target this year from the previous year. But, it has downsized the target to 12%-14%.

"We estimate that the sales growth might be downsized by 1% from the previous target," said Kalbe Farma Corporate Secretary Vidjongtius as reported by Kontan daily.

The company posted Rp9 trillion sales last year. Considering the target, Kalbe Farma is estimated to book Rp10 trillion-Rp11.26 trillion.

According to him, sales contribution from Kageo Igar was around 4% of Kalbe's consolidated revenue. "By disposing Kageo Igar, Kalbe is more focusing on core business, production, marketing, and distribution."

Kalbe Farma booked a 11.6% rise in net sales in the first half of this year to Rp4.7 trillion. 

 
Disclosure: No position at the stock mentioned above.

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Krakatau Steel 1H profit up 190.16%

he country's largest steel manufacturer PT Krakatau Steel booked 190.16% net income jump, amounting Rp997.73 billion during the first half of 2010, compared to the net loss in the first half of 2009, reaching Rp1.1 trillion.

A source familiar with the matter, as reported by Bisnis.com, said the jump was due sales growth by the 14.97% or Rp1.17 trillion from Rp7.82 trillion to Rp9 trillion and the decline of cost of good sold in the same period.

The state-owned enterprises’ cost of goods sold declined by 15.5% or Rp1.3 trillion from Rp8.4 trillion to Rp7.1 trillion.

The company plans to offload 19.61% of its shares to public in an initial public offering as it eyes Rp3.3 trillion fresh funds from such corporate action.

Three state-owned securities companies namely PT Danareksa Sekuritas, PT Mandiri Sekuritas, and PT Bahana Securities will arrange Krakatau Steel IPO.

Actually, the company plans to list 30% of its shares and will derive Rp4 trillion-Rp5 trillion fresh funds but it will hold 19.61% of initial offering.

The company also plans to list its three subsidiaries by next year. This corporate action tails the similar public listing held by PT Pelat Timah Nusantara Tbk in the end of 2009. 

Disclosure: No position at the stock mentioned above.

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Arpeni Ocean considers rights issue

Publicly listed shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) plans to seek Rp1.9 trillion fresh funds to increase its basic capital from Rp1 trillion to Rp2.99 trillion. One of the financing option is rights issue.  Arpeni’s stakeholder has approved such corporate action.

Arpeni President Director Oentoro Surya said that the company may choose two types of financing resources in order to jack up its capital; one of them is right issue.

“We have not decided when we will conduct such corporate action since we are still assessing the exact moment to hold such corporate action,” he said on Friday.
According to Oentoro, his company needs sufficient capital in order to support the company’s need over expansion and operational.

The global financial crisis and the decline of dry bulk shipping volume have affected Apreni’s performance and financial condition.

To enlarge its capital, Arpeni has appointed NM Rothschild & Sons as its financial advisor to conduct the strategic review over the company’s performance.

According to Oentoro, his company should do such measure since Arpeni’s stock price is below the face value.

So far, Arpeni still poses Rp1.5 trillion contract for coal shipping. The company owns 77 fleets. “The condition of the shipping industry is not conducive, making the company’s performance worse. However, we estimate an improved condition for our growth during the first half of 2010, approximately around 5%-10% as well as our net income,” said Oentoro.

At the moment Arpeni is in talks with the bonds holders regarding to the default of the interest bonds. The previous bond issuance reached US$160 million while the company’s obligation reached US$141 million.

Disclosure: No position at the stock mentioned above.

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Kepco completes Bayan acquisition

Korea Electric Power Corp (Kepco) has completed the purchase of a 20% stake in PT Bayan Resourses Tbk on Aug. 19.

Bayan Corporate Secretary Jenny Quantero, reported by Bisnis.com, said the purchase was made in two transactions for a total of Rp4.67 trillion (US$519.4 million). The first transaction was completed July 29, she said.

In a public announcement to Indonesia Stock Exchange (IDX) yesterday, Kepco has acquired 333.33 million shares in Bayan.

Kepco has bought those shares from sellers via over the counter market. After the purchase, Kepco has controlled 666.67 million shares in Bayan or 20% stakes.

Following the shares acquisition, Bayan Resources has agreed to supply coal to Kepco. Bayan will supply 2 million tons of coal annually to Kepco starting in 2012

Disclosure: No position at the stock mentioned above. 

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Bank Ekonomi 1H operating income up

Publicly listed PT Bank Ekonomi Raharja Tbk (BAEK) today reports a 29.11% rise in net operating income during the first half of this year as a result of higher other operating income.
In the financial statement submitted to Indonesia Stock Exchange (IDX) today, Bank Ekonomi, 98.96% controlled by HSBC Asia Pacific Holdings (UK) Ltd, posted Rp253.25 billion net operating income in 1H 2010 from Rp196.15% a year earlier.
Bank Ekonomi booked a 181.96% jump in other operating income from Rp39.03 billion in 1H 2009 to Rp110.05 billion in 1H 2010. 

But, the bank's net interest income slightly abated 3.49% from Rp427.09 billion in 1H 2009 to Rp412.16 billion in 1H 2010.
Bank Ekonomi's net profit rose 17.06% from Rp164.37 billion in 1H 2009 to Rp192.41 billion in 1H 2010.
As of June 2010, Bank Ekonomi is 98.96% controlled by HSBC Asia, PT Surya Sakti Investment holds 1%, and public share holders hold 0.04% shares.
On 20 October 2008, HSBC Asia Pacific entered into a conditional sale and purchase agreement with several major share holders to acquire 88.89% share ownership of Bank Ekonomi.
Under the terms of the agreement, HSBC Asia Pacific acquired 38.84% stake from PT Lumbung Arlakencana, 38.60% from PT Alas Pusaka, and 11.45% from several individual share holders.
The acquisition became effective upon closing of the transactions. On 22 May 2009, the shares sale and purchase transactions were completed and thus, the acquisition became effective.
Bank Ekonomi stocks are illiquid. The last transaction was on August 4 when the stock jumped 14% to Rp2,850 per share. 

Disclosure: No position at the stock mentioned above.

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Too early to be excited with PTBA-Adani

Railway pact with Adani spurs market excitement in PT Tambang Batubara Bukit Asam Tbk (PTBA). Bukit Asam's share price has gone up close to 8% on the back of Adani signing a heads of agreement (HoA) with PTBA to build a new 270km railway line connecting its Tanjung Enim mine with Tanjung Api-Api (towards the east). 

In return, we understand PTBA will pay Adani’s railway fee (just like it does with PTKA) and dedicate 60% of coal capacity for Adani. 

This railway line is different from PTBA’s joint venture with China Railway (that line is towards the south).
"It’s a bit too early to be excited, in our view," said a company report issued by Bank of America-Merrill Lynch on August 26 2010.
For starters, a feasibility study has not even been completed. Since the line will pass only one province, we understand approval from transport ministry is not required. 

But an approval from the provincial governor is still needed. Adani and PTBA also need to sign a coal transport agreement, in our view. That will likely be required when/if Adani wants to raise funds. And then there is land acquisition, which we think could be challenging based on the experience with PGAS’ construction of the SSWJ pipelines. All these combined, we do think it’s too early
to be excited now.
PTBA’s share price looks relatively expensive now. On valuation terms, we believe PTBA is relatively expensive.
The brokerage believes contributions from the existing railway plans and some value from the new railway
project with China Railway (still being engineered) are fully priced in. 

The stock looks expensive compared to its historical P/E. Moreover, PTBA also has to deal with rising costs given the stronger Rupiah. "We maintain our Neutral call."

Disclosure: No position at the stock mentioned above.

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Krakatau Steel to list 3 subsidiaries

A listed company candidate, PT Krakatau Steel (KS), is planning to privatize three of its subsidiaries through initial public offering (IPO).
Meanwhile, the company will use 19.26% of the IPO funds for financing its business expansion. KS have reviewed every option to release the rest of its shares amounted 10.74% so that later the stock marketed will reaches 30%.
KS President Director Fazwar Bujang uttered the subsidiaries’ IPO is expected to be conducted in 2011.
Currently, the company still focus to hold the public offering.
“We still can not mention the subsidiaries that will be privatized. Certainly, those companies were under KS, we will release some of them to the market next year,” he said today.
Meanwhile, related to the IPO plans, the company said that it would use the funds from the corporate action to financing the expansion.
However, he did not mention the funds proceed in details. In the same opportunity, Fazwar said that the joint venture company between KS and Posco is now effective following the signing of the cooperation agreement between both companies.
Currently, the company possessed 30% shares in the joint venture company while the rest of it possessed by Posco.
“We will increase the portion of shares ownership in Krakatau Posco up to 45% when the established mill start to operate,” he said.
The Joint venture company establishment is expected to give significant contribution toward the financial performance of Krakatau Steel.
The company is optimistic that the steel demands in global market will increases 8% to 10% next year in line with the increase of steel consumption.

Disclosure: No position at the stock mentioned above.

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S&P downgrades Berlian Tanker to B-

Stellar global rating agency Standard & Poor's Ratings Services (S&P) today lowered its long-term corporate credit rating on Indonesia-based shipping company PT Berlian Laju Tanker Tbk (BLTA) to B- from B and placed it on credit watch with negative implications.
At the same time, S&P downgraded Berlian Tanker's foreign currency issue rating to CCC from CCC+ on the US$400 million senior unsecured notes due 2014 and the US$125 million 5-year convertible bonds due 2012 by BLT Finance B.V., a wholly owned subsidiary of Berlian Tanker. These ratings have also been placed on credit watch with negative implications.
"Our BLTA downgrade is driven by the company's high leverage and weak liquidity," said Standard & Poor's credit analyst Manuel Guerena in a press statement.
Despite successfully getting funding (local currency bonds, sale-and-leasebacks, bank loans, convertible bonds, and two right offerings) for a total of approximately US$730 million since 2009, BLTA's leverage has not improved materially and its liquidity remains weak, given its tight cash flow generating capacity and aggressive capital expenditures, he said.
The credit watch placement reflects the high probability of Berlian Tanker breaching its EBITDA-related debt covenants in the next few quarters, given prospects of softer margins in the second half of the year and their very tight compliance headroom currently, a test of covenant compliance in June 2010 showed it was close to being in breach.
"The two unsecured notes are rated two notches lower than BLTA's issuer credit rating due to the substantial amount of secured debt that ranks ahead of the unsecured notes," Guerena said.
Resolution of the credit watch will depend on how Berlian Tanker deals with covenant pressure. A failure to address the potential covenant breach could trigger a further downgrade.
However, if the company increases the headroom in its covenant compliance and there are no near-term refinancing difficulties, S&P will remove the ratings from CreditWatch and revise the outlook to negative or stable, depending partly on the shipping industry outlook.
Berlian Tanker is highly leveraged, as evident from its ratio of operating-lease-adjusted debt to annualized EBITDA of approximately 7.5x as at June 2010.
While that is better than in 2009, we believe further improvement will be limited in the near term, due to the pressure on the company's profitability for the rest of 2010 and its aggressive capital expenditure program.
Berlian Tanker's key business is the operation of chemical tankers, which together contributes approximately 74% of revenue and 70% of EBITDA.
The company plans to grow its business by participating more in the Indonesian market under the new cabotage rules, likely by bidding for Pertamina's oil and gas tankers and other offshore vessels.

Disclosure: No position at the stock mentioned above.  

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Indofood CBP to pay Rp4.12 trio loan

PT Indofood CBP Sukses Makmur Tbk (ICBP), subsidiary of Indonesia's largest instant noodle maker PT Indofood Sukses Makmur Tbk (INDF), plans to offload 1.16 billion shares or 20% during an initial public offering (IPO) scheduled on October 7 2010. 

In the IPO prospectus published today, Indofood CBP will use 70%-80% of the IPO proceed to pay its debt, mainly to the share holder and 20%-30% will be used to fulfill working capital.

Indofood CBP has mandated four lead underwriters PT Kim Eng Securities, PT Credit Suisse Securities Indonesia, PT Deutsche Securities Indonesia, and PT Mandiri Sekuritas.

Based on the prospectus, Indofood CBP recorded Rp4.12 trillion share holder's loan in the first quarter of this year. In total, the company booked Rp5.18 trillion debt.

In the 1Q 2010, Indofood CBP has bank loan facility worth Rp1.25 trillion and US$53 million. It has used  Rp604.29 billion and US$50 million.

ICBP Group booked Rp4.34 trillion sales in 1Q 2010, Rp586.86 billion operating profit, and Rp368.07 billion net income.

Post IPO, Indofood Sukses Makmur will control 80% stakes in Indofood CBP and the remaining belongs to public share holders.

Disclosure: No position at the stock mentioned above.

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Bank Panin to issue Rp3 trillion bonds

Publicly listed PT Bank Pan Indonesia Tbk (Bank Panin) plans to issue Rp3 trillion bonds in a bid to underpin credit expansion and strengthen capital.

A source familiar with the matter said, as reported by Bisnis Indonesia today, Bank Panin has mandates four lead underwriters PT CIMB Securities, PT Mandiri Sekuritas, PT Indo Premier Securities, and PT Evergreen Capital to help arranging the bonds issuance. Bank Panin will issue two tranches of bonds, 5 and 7 years. 

Bank Panin Corporate Secretary Jasman Ginting confirmed that the bank aims to issue rupiah denominated bonds. But, he declined to mention the size.

 
Disclosure: No position at the stock mentioned above. 

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BUMI plans to raise up to US$300 mio

Indonesia's biggest thermal coal exporter PT Bumi Resources Tbk (BUMI) has launched a three-year private deal. The three-year loan will carry an interest rate at one-month Libor plus 11% payable on a monthly basis. The loan will share the same security and cash waterfall mechanism as that covering the US dollar bonds and its other existing loans. 

The deal is sweetened with some upfront fees and a make-whole provision if the loan is prepaid before maturity. 

After factoring in the upfront fee and upward sloping swap curve, the proposed private loan is expected to generate an IRR of around 12% (factoring in some liquidity premium for the private loan), which is higher than the 10.7%ytw for Bumi ‘16s for three years shorter maturity. 

Bumi plans to raise up to US$300 million to repay its two convertible bonds that are puttable for a total of around USD430 million before the year end.
"We believe that this should be credit positive for Bumi. If the company is successful in raising the full US$300 million, it would go a long way to address Bumi’s refinancing risk," said Asia Credit Roundup report published by J.P.Morgan yesterday.

On the news, Bumi '16s has gained around one point. J.P.Morgan maintains neutral recommendation on Bumi ‘16s (105.125offer, 10.68%ytw).

Disclosure: No position at the stock mentioned above.

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Wijaya Karya 1H net profit soars 50.80%

State-owned contractor PT Wijaya Karya Tbk (WIKA) posted Rp140.76 billion net profit in the first half of this year, a 50.80% increase from Rp93.34 billion a year earlier, despite lower net sales and operating profit.

In the financial statement published today, WIKA enabled to jack up its earning because interest and fine charges shrank 84.73% from Rp29.99 billion in the first half of last year to Rp4.58 billion in 1H 2010.

Foreign exchange loss also abated from Rp12.93 billion in 1H 2009 to Rp907.47 million in 1H 2010 on the back of rupiah appreciation against US dollar.

WIKA booked a 1.68% down in operating profit to Rp181.65 billion in 1H 2010 from Rp184.75 billion a year earlier due 33.72% higher operating expenses from Rp66.39 billion to Rp88.78 billion in 1H 2010.

The company's net sales also dipped 15.15% from Rp2.97 trillion in 1H 2009 to Rp2.52 trillion in 1H 2010.

Disclosure: No position at the stock mentioned above.

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Salim Ivomas 1H net profit dips 29.54%

PT Salim Ivomas Pratama (SIMP), parent company of palm oil producer PT PP London Sumatra Indonesia Tbk (Lonsum) and affiliated company of PT Indofood Sukses Makmur Tbk (INDF), today reports a 29.54% drop in net income as a result of net sales decrease in the first half of this year.

Salim Ivomas booked Rp413.98 billion net profit or Rp163.59 per share in 1H 2010 from Rp587.57 billion or Rp232.19 billion a year earlier.

The company's operating profit also fell 3.77% from Rp1.06 trillion in 1H 2009 to Rp1.02 trillion in 1H 2010, while operating expenses slightly lowered 0.48% to Rp438.84 billion in 1H 2010 from Rp440.97 billion a year earlier. Gross profit slipped 2.67% from Rp1.50 trillion in 1H 2009 to Rp1.46 trillion in 1H 2010. 

Salim Ivomas, wholly owned subsidiary of Salim Group, posted Rp2.74 trillion cost of goods sold in 1H 2010 from Rp2.78 trillion a year earlier, while net sales abated 1.64% from Rp4.28 trillion in 1H 2009 to Rp4.21 trillion.

Disclosure: No position at the stock mentioned above.

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Indofood 1H net profit jumps 76.37%

Indonesia's largest instant noodle maker PT Indofood Sukses Makmur Tbk (INDF) today announces a 76.37% jump in net profit in the first half of this year on the back of lower cost of goods sold.  

Indofood posted Rp1.41 trillion net profit or Rp355 per share in the first half of 2010 from Rp799.74 billion or Rp253 per share a year earlier.

Operating income rose 40.54% from Rp2.22 trillion in the first half of last year to Rp3.12 trillion in the first half of 2010, despite a higher operating expenses of 10.84% from Rp2.49 trillion to Rp2.76 trillion.

Indofood's gross profit increased 24.58% from Rp4.72 trillion to Rp5.88 trillion as a result of lower cost of goods sold by 8.38% from Rp13.36 trillion to Rp12.24 trillion.

The company, controlled by Salim family, booked Rp18.12 trillion revenue, a slight increase of 0.22% from Rp18.08 trillion a year earlier. The biggest contributor for Indofood's revenue was consumer branded product (CBP) segment of 47%, wheat flour business made 26%, agribusiness with 19%, and 8% came from distribution segment.

In a morning notes today, PT Mandiri Sekuritas said Indofood's 1H 2010 net income is above consensus estimates. The net income growth was mainly due to increase in noodle selling price.

Looking at segmental performance, CBP division performed well with 8.3% year on year growth that compensated revenues contraction from wheat flour segment. Agribusiness segment posted flat growth year on year. Indofood is currently trading at PER10-11F consensus of 17.1-14.8x.

Disclosure: No position at the stock mentioned above.

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Bank Saudara to hold rights issue

PT Bank Saudara Tbk aims to hold second right issue by December 2010. The company expects to generate Rp200 billion from such corporate action.
The rights issue is taken to foster its capital particularly in expanding its business activities although it had conducted its first right issue early this year.
President Director of Bank Saudara Farid Rahman confided that such right issue was undertaken for the second time merely to foster its capital following the improved Indonesia’s capital market.
“We plan to hold the right issue in December this year. We are now preparing the administration process,” said Farid also acted as General Secretary of National Bank Association (Perbanas) amidst the hearing process with the Inquiry Committee of Financial Authority draft.
He further explained that the company’s management is now conducting selection process over the future underwriters as the company expects to choose three brokerage houses to become the underwriters.
“We can not disclose this since they have not conducted any presentation yet. We shall announce the underwriter once they are chosen,” he said as reported by Bisnis.com today.
Bank Saudara held 745.82 million share right issues valuing Rp104.41 billion early this year or reaching 99.44% out of the total right issue achieving 750 million shares. 

Disclosure: No position at the stock mentioned above.

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Apexindo bags US$60.1 million loans

Publicly listed oil and gas drilling operator PT Apexindo Pratama Duta Tbk has secured US$60.1 million from two financial institutions after sealing loan worth Rp325 billion.
In the financial report of Apexindo’s parent company namely PT Mitra International Resources Tbk (MIRA), mentioned that on 7 April Apexindo has secured loan worth US$45.10 million from Angsana Asset Management Ptd Ltd. The 36 month loan is providing interest rate 24% per annum.
On 21 April 2010, Apexindo bagged another loan worth US$15 million from PT Bank Rakyat Indonesia Tbk. The 24 month loan bears 7% annual interest rate.
Apexindo on 11 March 2010 has also obtained a working capital credit facilities amounting to Rp200 billion from PT Bank Bukopin Tbk and PT Bank Muamalat Indonesia Tbk.
The 12 month loan provides 14% interest per annum to Apexindo and paid monthly. The credit facility is pledged by the Rig Raisis and receivables on the Rig Raisis.
In June, Apexindo loans reached Rp125 billion from PT Danareksa (Persero). The 6 month loan that gives 15% interest per annum and is pledged by the rigs no. 4, 5, and 14 also a personal underwriter from Mr. Agung Salim as underwrites and receivables from the rigs.

Disclosure: No position at the stock mentioned above. 
 
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Indosat spends Rp3.06 trillion capex

Indonesia's second largest cellular operator PT Indosat Tbk (ISAT) has spent Rp3.06 trillion capital expenditure (capex) during the first half of this year. The capex has shrank 56.3% from a year earlier.
In investor memo, Indosat said about 80% of the capex has been spent for cellular business, while fixed line, fixed data, infrastructure and information technology business took the remaining. 
As of June 2010, Indosat’s net income slumped 71.5% from Rp1 trillion during the first semester 2009 to Rp287.1 billion mainly due to the increase of financing costs, spurred by the rise of Indosat’s debt and lower foreign exchange earnings.
Indosat’s revenue rose 5.8% from Rp9.14 trillion to Rp9.66 trillion during the first semester this year.
But, operating profit fell 15.9% from Rp1.92 trillion to Rp1.61 trillion.  

Disclosure: No position at the stock mentioned above.

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Mitra International loss soars 86.19%

PT Mitra International Resources Tbk (MIRA), parent company of drilling operator PT Apexindo Pratama Duta Tbk (APEX), today announces a ballooning net loss of 86.19% in the first half of this year.
In the financial statement published at Indonesia Stock Exchange website today, the higher net loss was mainy spurred by lower revenue and operating profit, dispite net charges surge.
Mitra posted Rp566.85 billion net loss in the first half of this year from Rp304.45 billion a year earlier.
Net charges also soared from Rp633.02 billion in 1H 2009 to Rp830.29 billion in 1H 2010, propelled by bank interest and penalties and other charges.
Mitra International's operating profit dropped 56.07% from Rp421.96 billion in 1H 2009 to Rp185.38 billion on the back of lower revenue and soaring operating cost. Revenue fell 17.01% from Rp1.47 trillion in 1H 2009 to Rp1.22 trillion in 1H 2010.  

Disclosure: No position at the stock mentioned above. 

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Lonsum pays US$4.09 mio loan to SMBC

Publicly listed palm oil producer PT PP London Sumatra Indonesia Tbk (Lonsum) has paid principal loan worth US$4,09 million to Sumitomo Mitsui Banking Corporation (SMBC) on 4 August 2010.

In the first half financial statement, Lonsum obtained loan facility from SMBC Singapore and DBS Bank Ltd with combined maximum credit limit of US$45 million on August 4 2009. A day later, Lonsum secured loan facility from CIMB Bank Berhad Singapore branch with maximum credit limit of US$30 million. 

These loans are secured by collective corporate guarantees from PT Salim Ivomas Pratama (SIMP), Lonsum's controlling share holder, and Indo Agri in proportion to their equity ownership in the company. Proceeds from these loan facilities were used to refinance the club deal bank loans.

Lonsum yesterday reported a 45.72% jump in net profit during the first half of this year on the back of shrinking costs.

In the financial statement submitted to Indonesia Stock Exchange today, Lonsum posted Rp417.78 billion net profit or Rp306 per share in 1H 2010 from Rp286.70 billion or Rp214 per share a year earlier.
Operating profit rose 43.36% from Rp398.08 billion in 1H 2009 to Rp570.67 billion in 1H 2010.
Lonsum enabled to reduce both operating expenses and cost of goods sold (COGS) 11.98% and 3.33% respectively in 1H 2010.
The company's operating expenses fell 11.98% from Rp204.18 billion in 1H 2009 to Rp179.71 billion in 1H 2010, while COGS abated from Rp844.17 billion in 1H 2009 to Rp816.04 billion in 1H 2010.
Lonsum booked Rp1.57 trillion sales in 1H 2010, a 8.28% increase from Rp1.45 trillion a year earlier.

Disclosure: No position at the stock mentioned above. 

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Indosat financing cost up to Rp1.1trio

Indonesia's second largest cellular operator PT Indosat Tbk (ISAT)'s net profit fell to Rp287 billion (-72% year on year) even though operationally the results were in-line on revenue and operating levels. 
The rise in financing costs (+22% year on year) to Rp1.1 trillion and lower foreign exchange gain due to rupiah strengthening (-49% year on year) of Rp370 billion led to the shortfall in net earnings way below consensus and ours. 
In a morning digest published by Mandiri Sekuritas today, Indosat's 1H 2010 subscribers were at 37.8 million (+35%yoy), however this is lower than the subscriber base in 1Q10 of 39.1 million.
Apparently, among the 3 major telco operators, only Indosat registered a qoq decline on subscribers as of 1H 2010. 
On the bright-side, despite the drop in subscriber numbers, its cellular revenues grew the highest qoq at 7.7% versus PT XL Axiata Tbk (EXCL) and  PT Telekomunikasi Selular (Telkomsel)'s 4.2% and 5.7% growth respectively.  
Among the big 3 operator’s revenue market share of ISAT stood at 18% and continues to trail Telkom (66% revenue market share) but is still ahead of EXCL (which accounted for 16% revenue market share among the 3 operators). Currently the stock trades at PER10F 15.4x. 

Disclosure: No position at the stock mentioned above.

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Astra Otoparts gives Rp65b loan to MTM

Spare part manufacturer for automotive PT Astra Otoparts Tbk (AUTO) plans to provide Rp65 billion bridging loan facility to its wholly owned subsidiary PT Menara Terus Makmur (MTM).
In a public announcement submitted by Astra Otoparts to Indonesia Stock Exchange today, as main shareholder in MTM, Astra Otoparts is fully committed to continuously support the growth and survival of MTM. "The two year bridging loan will be used by MTM for its working capital," the announcement said.
The loan will charge MTM with annual interest rate of 2.5% above SBI. MTM is a company engaged in the forging part, jack, and hand tolls industry for automotive. 

 
Disclosure: No position at the stock mentioned above. 

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Indocement sets 10%-13% sales growth

Indonesia's second largest cement manufacturer PT Indocement Tunggal Prakarsa Tbk (INTP) is eyeing 10%-13% growth in sales volume this year from 13.6 million tons last year.
The target is above cement industry estimated to grow 7%-8% this year from 38.2 million tons a year earlier.
Indocement Finance Director Christian Kartawijaya said the company's production capacity will baloon to 18.6 million tons of cement by the end of 2010 due 1.5 million tons additional capacity from Cirebon-based cement mills.
With higher production volume, Indocement expects to grab additional market share to 33%-34% this year from 30.2% last year.
Christian said the company hasn't decided to rise cement selling price due it enables to gain cost efficiency.
2 million tons of cement mill in Citereup, West Java, is expected to be built in the second half of 2011 or end of 2011. The company will use US$70 million internal cash to build the mill.

Disclosure: No position at the stock mentioned above.

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DOID in talks to extend contracts

Publicly listed PT Delta Dunia Makmur (DOID), parent company of Indonesia’s second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), is now in talks in a bid to extend existing contracts maturing within months.
Delta Dunia is also negotiating with some other parties regarding to the new coal-mining contracts. “We are now in talks for some contracts that will be extended, possibly before the end of this year. I can not mention the contract detail yet,” said Delta Dunia’s Corporate Secretary Andre Soelistyo today.
Based on Citi conference’s material, BUMA owns and manages 12 coal-mining contracts. Of 12 contracts, two contracts with PT Bukit Baiduri Energy and PT Arutmin Indonesia will soon be maturing.
The contract period with Baiduri Energy started from 2001 until 2010, while Delta Dunia’s contract with Arutmin began in 2008 and shall be ended by 2011.
Apart from that, two contracts with Bayan’s Group, Perkasa Inakakerta and Marunda Graha Mineral shall be matured by 2012.
BUMA’s biggest earning contributor last year was Berau Coal with 33% contribution, followed by Adaro with 17% and Kideco Jaya Agung with 14%.
Last year, Berau Coal’s coal production reached 14.3 million tons, Artumin Indonesia posted 19.3 million tons of coal, Adaro produced higher production with 40.6 million tons.
Kideo Jaya Agung and Bayan Group booked 24.7 million tons and 12 million tons production respectively. 

List of Bukit Makmur’s contracts:

1. Berau Coal-Lati: 1998-2018
2. Berau Coal-Binungan: 2003-2018
3. Berau Coal-Suaran Port: 2003-2018
4. Kideco: 2004-2019
5. Adaro: 2009-2013
6. Bayan-Gunung Bayan: 2007-2013
7. Bayan-Perkasa Inakakerta: 2007-2012
8. Maruda Graha Mineral: 2003-2012
9. Lanna Harita Indonesia: 2001-2013
10. Arutmin: 2008-2011
11. Bukit Baiduri Energy:2001-2010
12. Darma Henwa: 2010-2013.
Source: Citi conference.

Disclosure: No position at the stock mentioned above.

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Lonsum 1H net profit jumps 45.72%

Publicly listed palm oil producer PT PP London Sumatra Indonesia Tbk (Lonsum) today reports a 45.72% jump in net profit during the first half of this year on the back of shrinking costs.
In the financial statement submitted to Indonesia Stock Exchange today, Lonsum posted Rp417.78 billion net profit or Rp306 per share in 1H 2010 from Rp286.70 billion or Rp214 per share a year earlier.
Operating profit rose 43.36% from Rp398.08 billion in 1H 2009 to Rp570.67 billion in 1H 2010.
Lonsum enabled to reduce both operating expenses and cost of goods sold (COGS) 11.98% and 3.33% respectively in 1H 2010.
The company's operating expenses fell 11.98% from Rp204.18 billion in 1H 2009 to Rp179.71 billion in 1H 2010, while COGS abated from Rp844.17 billion in 1H 2009 to Rp816.04 billion in 1H 2010.
Lonsum booked Rp1.57 trillion sales in 1H 2010, a 8.28% increase from Rp1.45 trillion a year earlier.
SIMP controls 32.21% stakes in Lonsum, Credit Suisse Singapore Trust SIMP owns 24.18%, Credit Suisse Singapore Trust Account Client Indofood Account Client Indofood Agri Resources Ltd holds 8.03%, and public share holders hold 35.58%.  

Disclosure: No position at the stock mentioned above.

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Astra Agro FY10 revenue flat at Rp7.42t

Corporate Secretary PT Astra Agro Lestari Tbk (AALI) Santosa expects FY10 revenue to come in flat at Rp7.42 trillion, due to stronger rupiah. 

The company also expects to sell 1 million tons of CPO in FY10, 5.6% lower compared to last year of
1.06 million tons.
In an equity daily published by Kim Eng Securities, the brokerage concurs with management’s view on flat revenue and lower CPO sales volume of 1 million tons. 

The company posted flat revenue in 1H10 at Rp3.51 trillion. Net profit, however, fell by 17% y/y on higher unit cost.

Sales volume in 8M 10 decreased by 2% y/y to 573.6k tons of CPO, led by 8.8% drop in FFB harvest at 2.2 million tons. CPO Production in 8M10 fell by 6.5% to 568.3k tons.

"We estimate CPO production in 2H10 to come in weak, as the South East Asia region is expected to experience La Nina, which typically would cause wet period in the area," Kim Eng said.
On the other hand, we expect CPO price to remain strong above US$800 per ton in 2H10, on concern over edible oil supply and heavy drought in Russia.

Disclosure: No position at the stock mentioned above.

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Astra to complete buyout ASF in Sept.

PT Astra International Tbk (ASII) plans to complete the acquisition of 100% GES in September 2010. 

The aim is to increase its stakes in Astra Sedaya Finance (ASF) from currently 53% to 100%. Seller of the 47% stakesis GE Capital which is the strategic partnerof Astra in Astra Sedaya. 

Chief Corporate Communication of Astra Arief Isnanto said the company is estimated to spend Rp2 trillion cash for the acquisition.

In a morning notes, CLSA said Astra Sedaya Finance is the largest car financing companies in Indonesia with total loan book of Rp9.1 trillion (+44% yoy), and equity value of Rp1.89 trillion. 

Note that aside from the Rp9.1 trillion loan book, Astra Sedaya also channel another Rp8.3 trillion loan to consumer under joint financing without recourse with 3rd parties. Astra Sedaya accounted for 2.1% of Astra Intl consolidated net profit in FY09. Additional 47% stakes acquisition will add less than 2% to Astra Intl profit.

Disclosure: No position at the stock mentioned above.

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Bukopin acquisition, tender offer?

PT Bank Rakyat Indonesia Tbk (BRI) stocks today jumps 12.50% to IDR720 per share on acquisition story that the bank will buy 51% stakes in PT Bank Bukopin Tbk, creating speculation of tender offer. 
A stock trader said investors are frenzy to collect Bukopin stocks. "The stocks jump is spurred by BRI acquisition," he said.  
BRI President Director Sofyan Basir yesterday said the bank aims to buy 51% stakes in Bank Bukopin using unused proceed from subordinated bonds issuance worth IDR2 trillion.
He said if Bukopin acquisition is completed, BRI may consider a merger option between Bank Bukopin and PT Bank Agroniaga Tbk. 

Disclosure: No position at the stock mentioned above.

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Aditech & Midi Utama plan to go IPO

Two companies namely PT Aditech Cakrawiyasa and PT Midi Utama Indonesia plan to list their stocks at Indonesia Stock Exchange (IDX) in September or October. "Two companies may list their stocks at IDX," said IDX Director Eddy Sugito.

Aditech is gas-based stove namely Quantum and gas producer. They have file IPO documents to IDX. Aditech General Manager Heri Sugiarto said the company had submitted the IPO documents last week. "We plan to raise below Rp500 billion from the IPO," he said as reported by Kontan daily.

Aditech has mandated PT Dinamika Usahajaya as the IPO underwriter. Midi Utama is license holder for Alfa Midi, affiliated company of PT Sumber Alfaria Trijaya Tbk (ALFA).

Midi Utama Operational Director Agus Setiawan said the company has managed 100 outlets in Jabodetabek, Surabaya, and Bali.

Disclosure: No position at the stock mentioned above. 

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United Tractors sets a coal acquisition

Publicly listed heavy equipment Komatsu distributor PT United Tractors Tbk (UNTR) is eyeing another coal mining acquisition located near coal mine PT Tuah Turangga Agung, wholly owned subsidiary.

"Acquisition is estimated to complete this year," said United Tractors Investor Relations Ary Setyawan as reported by Kontan daily today.

The acquisition target has coal with 6,000 cal and enabled to produce 500,000-1 million tons annually. But, he couldn't estimate the acquisition value. United Tractors will use internally generated cash flow to bankroll the acquisition.

The company's cash recorded Rp3.1 trillion in the first half of this year and booked Rp9.5 trillion retained earning.

So far, United Tractors has acquired three coal mining companies namely PT Asmin Bara Bronang, PT Asmin Bara Jaan worth US$40 million and US$75 million respectively. The company in July completed acquisition of PT Agung Bara Prima worth US$15.9 million.

It estimated coal production might reach 3.2 million tons by the end of this year, consisting 2.5 million tons from wholly owned subsidiary PT Pamapersada Nusantara, Indonesia's largest coal mining contractor, and 700,000 tons from Tuah Turangga Agung.

Disclosure: No position at the stock mentioned above. 

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Korea East-West Power eyeing Indo coal

South Korea Electricity Company dubbed Korea East-West Power Co Ltd (EWP) eyes on Indonesia’s coals mining site as business expansion also securing fuel supply for some of the company’s power plant projects.
Executive Auditor EWP Lee Jung-Won uttered that until now, the company does not have any coals mining in Indonesia.
Despite, he said, around 40% of the company’s total consume for coal that reached 64 million per annum originated from Indonesia. “We don’t have coals mining in Indonesia but we plan to buy it [mining site]. We still looking for that opportunity,” he said yesterday as reported by Bisnis.com.
The coals imported from Indonesia, he said, were used as fuel for some power plant projects in several countries such as India, Japan, Philippines, and South Korea.
Deputy General Manager Overseas Business Division EWP Min Tae Bang added that last year, the company was succeed in importing 25.6 million tons of coals from Indonesia only for supplying the power plants fuel in South Korea only.
“Totally, we consume 64 million tons of coals every year but it only to fulfill the operational needs of our power plants abroad. Therefore, we want to buy the coals mining in Indonesia,” he said.
Regarding the fund readiness, he admitted that until now the company is seeking for the best mining location so that the total funds needed is still unknown

Disclosure: No position at the stock mentioned above.  

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United Tractors July sales jumps 87%

Publicly listed heavy equipment Komatsu distributor PT United Tractors Tbk (UNTR), PT Astra International Tbk’s subsidiary, posts 3,200 units of heavy equipment sales volume as of July this year.
UNTR Corporate Secretary Sara K Loebis said that heavy equipment sales has touched 3,200 units up to July 2010.
“It significantly rose 87.13% compared to the same period last eyar that only reached 1,710 units,” she said.
Sara further confided that such achievement was mainly propelled by the rise of commodity price.
“The improved economic condition has encouraged the company to allocate credit for heavy equipment,” she said.
Although it has booked such a high sale figure, the company does not want to revise its sale target this year.
“Ever since there will be Christmas and Ied el Fitr. So we still use our old target,” she affirmed.
UNTR targets its sales volume to reach 5,000 units during this year, meaning it only needs to sell 1,800 units more. 

Disclosure: No position at the stock mentioned above.

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ACC to launch Rp1.5 trillion bonds

PT Astra Credit Company (ACC), PT Astra International Tbk’s subsidiary, plans to unveil bonds at a minimum size of Rp1.5 trillion by the end of the first half next year merely to strengthen its financing.
The company attempts to increase its financing and maintain its compounded annual growth rate (CAGR) within the range of 20%-25% every year.
ACC Finance Director Hugeng Gozali said the amount of the 2011’s bond issuance possibly will be the same as this year’s bond issuance in order to complete the annual external financing.
“The size will be the same as last year’s, Rp1.5 trillion. Around 40% of our financing need was derived from the external resource. Majority of our financing are generated from collecting,” he said as reported by Bisnis.com.
However, Hugeng declined to explain next year’s financing target. The company is eyeing Rp8.5 trillion financing this year.
 

Disclosure: No position at the stock mentioned above. 

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Pan Brothers secures Rp50 bio loan

Publicly listed textile manufacturer PT Pan Brothers (PBRX) has secured Rp50 billion loan facility from PT Minna Padi Aset Manajemen.

In a public announcement today, Pan Brothers reveals that the loan facility will be used to strengthen working capital and bankroll machines purchase.

Pan Brothers is required to provide convertible bond as a guarantee for the 5 year loan facility draw down. The loan facility is more than 20% of Pan Brothers' equity but still below 50%. 

 
Disclosure: No position at the stock mentioned above.  

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BW Plantation names 3 underwriters

Publicly listed palm oil producer PT BW Plantation Tbk (BWPT) has mandated three lead underwriters to arrange 5 year Rp500 billion-Rp700 billion bonds issuance.  

BW Plantation Corporate Secretary Kelik Irwantono said the company has appointed PT BNI Securities, PT Danareksa Sekuritas, and PT Kresna Securities to underwrite the bonds. 

“Three lead underwriters will help issuing bonds in November, using BW Plantation’s June financial statement,” he told Bisnis.

The proceed will be used to bankroll the company’s business expansion up to 2012 which will require US$80 million-US$90 million.

According to him, the capex is likely to finance the palm oil planting and the construction of two palm oil processing plants in Central Kalimantan and East Kalimantan. 

The total land of BW Plantation is about 92,000 hectares of which 46,000 hectares are planted. "Until 2012, we are targeting about 63 000 hectares of the land will be planted which means we need to add 17,000 hectares more," he said. 

Palm oil processing plant in Central Kalimantan, said Kelik, will have a capacity of 45 tonnes fresh fruit bunches (FFB) per hour, while the plant in East Kalimantan has a capacity of 60 FFB per hour. 

"Until 2012, the production capacity of BW Plantation is possibly to reach 210 TBS whereas now it only produces 105 TBS an hour," he said.

Currently, the mature area of plantation reaches 15,000 hectares. In 2012, the mature area is estimated to increase up to 27,000 hectares. 

 
Disclosure: No position at the stock mentioned above. 

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BNI to dispose BNI Securities

Publicly listed PT Bank Negara Indonesia Tbk (BNI) has obtained an offer from a strategic investor interested to acquire its wholly owned subsidiary PT BNI Securities.

BNI Finance Director Yap Tjay Soen said talks have been held between BNI and the investor. But, he declined to name the investor.
"A prominent name investor will enter BNI Securities. We are underway to set the disposal," he said as reported by Bisnis.com.
BNI Securities's sale is aimed to improve performance of the securities house. BNI initially planned to divest BNI Securities in the first half of this year with a sales target worth Rp300 billion. BNI also aims to sell BNI Life.

Disclosure: No position at the stock mentioned above.

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Indosat redeems US$234 million notes

Indonesia's second largest GSM-based cellular operator PT Indosat Tbk (ISAT) has paid US$234 million guaranteed notes maturing this year.
According to Indosat Corporate Secretary S. Auliana, Indosat has made notes redemption on August 10 2010 using proceed of US$650 million bonds issuance which will mature in 2012. The company also plans to pay another US$109 million which will due in 2012.

Indosat suffered a steep drop net profit by 71.5% during the first half this year despite a slight growth revenue.

In a public statement submitted to Indonesia Stock Exchange (IDX) last week, Indosat posted Rp287.1 billion net profit in 1H 2010 from a year earlier of Rp1 trillion. But, Indosat hasn't yet explained more detail the reason why it suffered a steep drop net profit. 

Indosat President Director Harry Sasongko said EBITDA increased 6.7% from Rp4.32 trillion in 1H 2009 to Rp4.61 trillion, sending a slight growth in EBITDA margin from 47.3% to 47.7%. Indosat's revenue rose 5.8% from Rp9.13 trillion in 1H 2009 to Rp9.66 trillion in 1H 2010. 

Disclosure: No position at the stock mentioned above. 

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Gozco to buy Benua Indah Group assets

Palm oil player PT Gozco Plantations Tbk (GZCO) intends to acquire assets of PT Benua Indah Group, one of debtors of PT Bank Mandiri Tbk (BMRI). The bank will put the asset for sale as a result of debt default.

"We are interested to buy their assets for business expansion," said Gozco President Director Tjandra M. Gozali, as reported by Kontan daily yesterday.

Gozco aims to acquire 13,000 hectares of land and two palm oil mills located in West Kalimantan with production capacity of 45 tons FFB per hour respectively.

According to Tjandra, Gozco will use internally generated cash to acquire the assets. "We are seeking another financing source to revitalize Benua Indah lands. Gozco manages 125,000 hectares of land and 30,000 hectares planted area.   

 
Disclosure: No position at the stock mentioned above.

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Pefindo assigns A for BW Plantation

Indonesia's rating agency PT Pemeringkat Efek Indonesia (pefindo) has assigned A for corporate rating of palm oil producer PT BW Plantation Tbk (BWPT), despite proposed Rp500 billion-Rp700 billion bonds issuance in November.

Analyst Doni Kuswantoro at Pefindo said the rating reflects good BW's operational management, robust cash flow, and positif plantation profile.

"But, the rating is shadowed by more agreesive of BW Plantations's financing strategy, higher exposure, and commodity price and unfavorable climate," said Pefindo.

As of June 2010,BW' land bank is around 96,175 hectares, consisting 46,048 hectares planted area and 50,127 hectares unplanted area.

Disclosure: No position at the stock mentioned above.

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Bank Danamon 1H net profit jumps 65%

Publicly listed PT Bank Danamon Indonesia today reports a 65% jump in the first half's net profit to Rp1.43 trillion from Rp870 billion a year earlier.
Bank Danamon President Director Henry Ho said the bottom line increase is mainly underpinned by a rise in operational revenue of credit growth, especiallu in the mass credit segment and operating margin. 
"In line with a positive progress in the country's economy, we enable to fasten credit growth," he said in a press conference.
Danamon posted a rise in net interest income to Rp4.84 trillion in the first half of this year from Rp4.42 trillion a year earlier.
As a result, Bank Danamon enables to maintain its net interest margin at the level of 11.6% compared to 10% a year earlier. Danamon is majority owned by Temasek Group.

 
Disclosure: No position at the stock mentioned above.

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Kertas Basuki to hold rights issue

A distressed paper manufacturer PT Kertas Basuki Rachmat Indonesia Tbk (KBRI) is considering to hold rights issue in the second half of this year. The proceed will be utilized buy Kertas Basuki to pay US$38.5 million loan to Quest Corporation.

"We have plan to hold rights issue and the proceed will be used to pay loan facility to Quest Corporation," Kertas Basuki Rachmat, KBRI subsidiary, President Director Theo Satria Chairuman said.

But, he declined to mention the rights issue size. According to him, several potential institutions are interested to become standby buyers for the rights issue.

KBRI is also in talks with several banks in a bid to secure US$50 million loan facility which will be used to bankroll paper machine program.

 
Disclosure: No position at the stock mentioned above.

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Newmont to secure US$200 mio loan

PT Newmont Nusa Tenggara (NNT) is going to secure US$200 million in additional loans from one European bank, outside loan commitments from two foreign banks and one local bank namely Bank Mandiri, BNP Paribas, and Sumitomo Mitsui Banking Corporation-for sixth- and seventh-phase working capital.
President Director of NNT Martiono Hadianto, as reported by Bisnis.com today, explained the extraordinary shareholders general meeting (EGM) yesterday approved the management to seek additional loans to make up a total loan of US$800 million.
"It means that one more bank is ready to lend their fund. I forgot the name, but the bank is from Europe. The entire US$800 million loans are expected to be settled in September," he said yesterday.
Previously, Vice President Director of PT Bank Mandiri Tbk Riswinandi admitted the bank and Sumitomo Mitsui Banking Corporation, and BNP Paribas had been named the arranger for a total loan of USS600 million.
The loans, he added, had tenures of between 5 and 7 years. However, the interest rates had not been fixed.
"The loans are equally distributed, each of which will lend US$200 million."
As for the result of the EGM yesterday, Martiono explained the majority of the Newmont shareholders had approved the realization of the initial public offering (IPO) of 10% shares in the first quarter of 2011 provided that the divestiture of 7% shares had to be settled first.
According to him, the divestiture process was entering the final phase of determining price agreement with the government.
After the price was agreed, the Minister of Energy and Mineral Resources (ESDM) was expected to offer the shares to the central government represented by the Minister of Finance.
The government had 30 days after the offer to respond to it. If the central government was willing to buy the shares, Newmont would give 60 days to settle the sale and purchase transactions, so the divestiture could be completed by the end of November 2010.
Separately, Director General of Mineral, Coal, and Geothermal at the Ministry of Energy and Mineral Resources Bambang Setiawan disclosed the negotiation was still discussing the purchasing price.
As for shares to be offered to the market, Martiono said the shares would be new ones.
Currently, Newmont and Sumitomo controlled NNT through Nusa Tenggara Partnership which owns a 56% stake. The stake will be reduced to 49% since a 7% stake will be divested to Indonesia

Disclosure: No position at the stock mentioned above.

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Sierad seals Rp63.50b loan from CIMB

PT Sierad Industries, wholly owned subsidiary of publicly listed poultry company PT Sierad Produce Tbk, has secured Rp63.50 billion credit facility from PT Bank CIMB Niaga Tbk.

The credit facility has been signed by Sierad Industries and CIMB Niaga on August 16 2010. The facility will be used by Sierad Industries to buy 4,457.86 squre meter office space on 7th floor at The City Center.

Based on a binding office spare agreement with developer PT Greenwood Sejahtera, Sierad Industries has to pay Rp79.44 bilion for the office space.

"We will buy the office space using loan facility from CIMB Niaga and internal cash," Sierad Produce Corporate Secretary Elies Lestari Setiawan in a public statement submitted to Indonesia Stock Exchange today.

Disclosure: No position at the stock mentioned above.

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Dayaindo 1H net income soars 865.72%

Publicly listed Natural resources-based company PT Dayaindo Resources International Tbk (KARK) today announces a 865.72% jump in net sales during the first half of this year.
In the financial statement published today, Dayaindo posted Rp631.87 billion net sales as of June this year from Rp65.43 billion a year earlier.
In result, the company's operating profit surged 216.01% from Rp8.43 billion in the first half of 2009 to Rp26.64 billion.
Net income jumped 162.98% from Rp5.24 billion or Rp3.13 per share a year earlier to Rp13.78 billion or Rp8.20 per share. KARK today is up 2.22% to Rp92 per share, sending its market capitalization to Rp1.89 trillion.

Disclosure: No position at the stock mentioned above. 

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BRI acquires 88.65% stakes Bank Agro

Publicly listed PT Bank Rakyat Indonesia Tbk (BRI) today announces acquisition of 3.03 billion shares or 88.65% stakes in PT Bank Agroniaga Tbk (AGRO).
In a public statement submitted to Indonesia Stock Exchange, BRI and Dana Pensiun Perkebunan (Dapenbun) have entered into a binding sale and purchase agreement on August 19 2010.
Based on the agreement, BRI has agreed to acquire 76% stakes in Bank Agro from Dapenbun.
Considering Bank Agro's warrants which haven't exercises by Dapenbun and other holders and shares refloat, BRI in the first stage will acquire 3.03 billion shares in Bank Agro in a bid to reach 76% shares of minimum ownership. Dapenbun now controls 3.28 billion shares pr 95.97% in Bank Agro.

 
Disclosure: No position at the stock mentioned above.

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CIMB arranges US$200 mio Borneo IPO

A Malaysian owned CIMB Securities Indonesia is processing an initial public offering (IPO) of a commodity company worth as much as US$200 million.

CIMB Securities President Director Bernard Thien, as reported by Bisnis Indonesia today, said that the company is planning to raise 30% share, using the financial report dated June 2010. The company is preparing the required document to get pre-listing license from the market authority.
“We have talked to PT Bursa Efek Indonesia [BEI]. The document will be probably processed by next month. The name of the company cannot be revealed since it is still in a process,” he told the press last night.
A Bisnis source said CIMB is one of three lead underwriters mandated by PT Borneo Lumbung Energy, parent company of coking coal producer dubbed PT Asmin Koalindo Tuhup.
"Borneo has mandated CIMB, Credit Suisse, and Morgan Stanley to arrange and manage the IPO," the source said. 

Disclosure: No position at the stock mentioned above.  

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Antam controls 99.5% Mega Citra

Publicly listed nickel miner PT Aneka Tambang Tbk (Antam) has finally controlled 99.5% stakes in bauxite company PT Mega Citra Utama (MCU) after completing acquisition of the remaining 20% stales.
In a public announcement submitted to Indonesia Stock Exchange (IDX) yesterday night, Antam Corporate Secretary Bimo Budi Satriyo revealed that its wholly owned subsidiary namely PT Antam Resourcindo has also owned 0.5% stakes in MCU.
Antam had acquired the remaining 20% stakes in MCU from Bram Agustsaputra and David Surya Agung Agustsaputra worth US$605,000.
The acquisition is far below Antam's total equity worth Rp8.15 trillion. Hence, it is not categorized as material transaction.

Disclosure: No position at the stock mentioned above.

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Aqua launches Rp371.79 bio tender

Publicly listed mineral water producer PT Aqua Golden Mississippi Tbk (AQUA) today announces a Rp371.79 billion tender offer for the remaining shares owned by public share holders in a bid to delist from Indonesia Stock Exchange.
In a public announcement, Aqua said the company aims to offer a shares buyback at Rp500,000 per share to holders of 743.38 million shares or 5.65% stakes.
The buyback price is 104.25% premium of the highest price of Aqua shares in the market during 90 days before go private announcement on August 20 2010.
The buyback price is also 124.76% above fair value of Aqua shares made by an independent valuer company at Rp222,460 per share.
According to regulation of Capital Market and Financial Insititution Supervisory Agency (Bapepam-LK), a tender offer price must be higher than the highest price of Aqua shares in the market during 90 days before go private announcement today at Rp244,800 per share.
Based on an independent valuer company, a fair value for Aqua shares is Rp222,460 per share.
PT Tirta Investama now controls 94.35% stakes in Aqua, while public share holders own the remaining shares. 

Disclosure: No position at the stock mentioned above.  

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Coal freights slump

Coal freights offered by handymax and panamax bulk carriers carrying the commodity from Indonesia to China have slumped to far below the ideal level.

In early July 2010, coal freight from Indonesia to Southern China slumped US$3 per ton from US$20 per ton in June 2010 to US$17 per ton, while coal freight from Indonesia to Northern China dropped by 15% from US$27 per ton in June to US$22 per ton-US$23 per ton in July 2010. 

Co-Chairperson of Maritime Industry Empowerment at the Indonesian National Shipowners' Association (INSA) Ibnu Wibowo said, as reported by Bisnis.com today, the freights to China had not yet changed until August 2010.

"Freights in August are still low, not too far different from July," he said yesterday. 

Ibnu, President Director of PT PANN Multifinance, explained the freights could further drop after China got alternative coal supply from South Africa. 

However, it could not yet be determined whether freights would continue to slump until the yearend. 

Ideal freights Co-Chairperson for International Partnership and Relations at the INSA Djoni Sutji explained the ideal coal freights from Indonesia to Northern and Southern China were US$30 per ton and US$25 per ton, respectively."The current freights are far lower than the ideal freights." 

He suspected the delivery of 2,000 bulk carriers of handymax and panamax types from 2010 to 2012 from China, South Korea, and Japan, affected the freights. "Besides, China has also started reducing coal and iron ore supplies." 

Despite the slumping freights, the export coal transportation sector was still attractive since the volume might reach 220 million tons per annum, raising a total freight revenue of US$6.6 billion. Currently, 90% of Indonesia's coal export is carried by foreign-flagged carriers. 

In the meantime, the number of national bulk carriers catering to the domestic market is only 34 units consisting of 13 units of handymax carrier (an average carrying capacity of more than 40,000 tons), 15 units of panamax carriers (80,000 tons), and six handysize carriers. 

Ibnu argued the government needed to implement the domestic transporter obligation (DTO) policy, which required end users to allocate export transportation to domestic transportation companies to prevent foreign exchange from flowing overseas. 

"The policy will stimulate the shipping sector after the cabotage principle program. According to him, the DTO policy requiring 30% of the total coal export be carried by domestic shippers could save US$1.98 billion in foreign exchange."

He added the policy would also stimulate the national shipyard industry since it would force the shipping industry to procure handymax carriers.

 
Disclosure: No position at the stock mentioned above.

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Berau Coal in talks with Noble Group

PT Recapital Advisors is in talks with one of largest commodities global player Noble Group and other potential investors in a bid to sell  20% stakes in PT Berau Coal Energy Tbk (BRAU).

Berau Energy President Director Rosan Perkasa Roeslani said following initial public offering (IPO), Recapital aims to dispose 20% stakes in BRAU to potential strategic investors.

"The proceed will be used to pay US$580 million bonds which will due in December 2010," Rosan said in the sidelines of the trading debut yesterday.

Rosan said Berau Energy expects to post US$350 million EBITDA this year from US$301 million a year earlier.

Berau Energy's revenue is estimated to rise by 17% from US$855 million in 2009 to US$1 billion. Total sales is targeted to reach 17.2 million tons of coal with average selling price at US$58.25 per ton. Berau Coal Energy's 2009 sales volume reached 14 million tons of coal with ASP at US$56.4 per ton.

For the period ended June of this year, Berau Energy booked US$477 million, a 28% rise from US$343.44 million a year earlier. Coal sales volume rose 22.86% from 7 million tons to US$8.6 million tons.

Disclosure: No position at the stock mentioned above.

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Kingsford unveils Kageo tender offer

PT Kingsford Holdings today announces a tender offer for 309.65 million of remaining shares in publicly listed PT Kageo Igar Jaya Tbk at Rp185 per share.

In a public announcement today, considering the tender offer price, Kingsford will spend Rp57.29 billion in cash to buy Kageo's remaining shares from public share holders.
The tender offer will be held by Kingsford in order to comply regulation of Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) No. IX. F.1 on Tender Offer.
The price of tender offer is 23% premium over avegare of Kageo's shares price in 90 days before Kingsford announced the acquisition.
Kingsford has accomplished Rp112.86 billion acquisition deal of 58.10% stakes in publicly listed Kageo Jaya on August 12 2010.
The acquisition acomplishment is in line with a condisitional sale and purchase agreement signed between Kingsford and Kageo's seller PT Kalbe Farma Tbk (KLBF), publicly listed pharmaceutical producer, on July 19 2010.
Kalbe President Director Irawati Setiady said based on the agreement, Kingford agreed to acquire 610.06 million shares in Kageo at Rp185 per share.
"The shares sale is hopefully to sharpen Kalbe's focus to its core business on production, marketing, product distribution, or healty services, she said in the statement

Disclosure: No position at the stock mentioned above.

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