May 6, 2011

Salim Ivomas to set 40% dividend ratio

One of Indonesia's largest edible oil maker PT Salim Ivomas Pratama Tbk (SIMP) today launches 3.16 billion of new shares or 20% of its enlarged capital during inital public offering (IPO) scheduled on June 8 2011.
PT Kim Eng Securities, PT Deutsche Securities Indonesia, and PT Mandiri Sekuritas have obtain a full commitment underwriting mandate from Salim Ivomas, said an official prospectus published today. 
About 40% of the IPO proceed will be used by Salim Ivomas to pay bank loan facilities. The company will use 50% of the proceed to bankroll plantation division for new planting, plantaiton maintenance, establishment of infrastructure facilities, and the remaining is aimed to support edible and vegetable fat division.
SIMP is a subsidiary of Indonesia's largest instant noodle maker PT Indofood Sukses Makmur Tbk (INDF), controlled by Salim family, with focus business to produce edible oil, margarine, and vegetable oil products.
The company has exported its edible oil and vegetable fat products to 42 countries such as China, Nigeria, Angola, Sri Lanka, Phillippine, and Timor Leste.
Post IPO, Indofood Oil and Fats Pte Ltd will control 72% shareholding in SIMP, Indofood Sukses will own 6.40%, PT Mandiri Investama Sejari will hold 1.03% stake, PT Bina Makna Indopratama and PT Multi Langgeng Nusantara will hold 0.31% and 0.26% respectively, and public investor will own 20%. 
Dividend policy
As mentioned in the IPO prospectus, Salim Ivomas plans a dividend policy of 40% of its net profit in 2011. The dividend will also be subject to cash ability of the company and subsidiaries, income from operations and financial performance, investment strategy, and business outlook.
Salim Ivomas reported a slight decrease in net income last year of 3.7% as other charges ballooned 174.32%. The company, a 90%-owned subsidiary of Singapore-listed Indofood Agri Resources Ltd (IndoAgro) and also eyeing an initial public offering in June at Indonesia Stock Exchange (IDX), posted Rp970.98 billion net income or Rp383.69 per share last year from Rp1.01 trillion or Rp398.58 per share in the previous year. 
The company booked Rp525.11 billion other charges from Rp191.42 billion. Operating profit increased 19.25% to Rp2.54 trillion from Rp2.13 trillion, enabling SIMP to augment its operating margin to 26.79% from 23.56%.
In line with operating profit, gross profit rose 16.01% to Rp3.55 trillion from Rp3.06 trillion, while COGS was flat to Rp5.94 trillion from Rp5.98 trillion. Net sales slightly increased 4.86% to Rp9.48 trillion from Rp9.04 trillion.

Disclosure: No position at the stock mentioned above.  

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