AKRA CORPORATE PRESENTATION. PT. AKR Corporindo, Tbk June 2018

Transcription

1 AKRA CORPORATE PRESENTATION PT. AKR Corporindo, Tbk June 2018

2 Forward looking statements No representations and warranties shall be made in relation to the reasonableness, accuracy, completeness or correctness of the information or opinions contained in this presentation. PT AKR Corporindo Tbk (the "Company) together with members of the Board of Directors and Board of Commissioners or respective affiliates have no liability whatsoever (whether negligent or otherwise) Any loss arising, directly or indirectly, for the use, belief or distribution of this presentation or its content or due to any reason arising in connection with this presentation. The information and statistical data of third parties in this presentation is obtained from sources which the Company believes to be reliable but there is no guarantee of the accuracy or completeness of the information. This presentation does not cover all material information relating to the Company and the information contained in this material is subject to change without notice. This presentation may contain an estimate statement that includes risk, uncertainty and other factors. The actual results, pro forma or achievements of the Company may differ materially with the results, pro forma or future achievements expressed or implied by such statements. The forecast statement is based on assumptions relating to the Company's current and future business strategy and future circumstances in which it will operate, and should be read in conjunction with those assumptions. Predictions, projections or economic forecasts or economic trends over markets may not necessarily indicate the probability of pro forma or pro forma of the Company in the future. The former pro forma may not necessarily indicate pro forma in the future. The Company's future financial future is not guaranteed. Investors should not rely solely on the forecast statement. These materials are intended to serve as information only and not constitute or become part of an offer, request or invitation from the purchase offer of the Company's securities. This information material has no legal basis whatsoever, and can not be the basis for contracting, commitment, or investment decisions. Any decision to purchase or subscribe to any Company securities must be based on the advice of appropriate professionals. 2

3 PT AKR Corporindo Tbk - The Leading Provider of Logistic Services and Supply Chain Solutions Well-diversified logistics business Leading private petroleum and chemical distributor Distributed customer base of more than 2000 customers Has a complete and integrated logistics infrastructure, whether in the form of warehouses, storage tanks to trucks and located strategically across Indonesia. Consistent Growth supported by strong Cash Flow Strong Business Model with effective hedging and net open position Long-term relationships with principals and customers Robust CAGR ( ) with Net Profit of 21.2% and Revenue of 16.8% Divestment and New Projects fueling strategic growth New businesses built based on core competency in logistics Engaging strong and reputable partners in new ventures Strong Fundamentals Cash position of ~ Rp 1.8Tn as of Mar 18 Low Net Gearing of 0.17 X and ROE 16.1% as of Mar 18 Committed to pay Dividend to our Shareholders Has dividend policy of >30% Dividend value (excl. year with special dividend) consistently increased ( ) Payout Ratio of 39-67% in Good Corporate Governance Received numerous recognition from domestic and foreign publications Implementing ESG (Environment, Social and Governance) principles in day to day management 3

4 PRIORITIES & STRATEGIC INITIATIVES 2 1 Maintain Volume Growth & Margins in existing petroleum & chemical segment 4 Ensure Financial Strength with Prudent Risk Management Strategic partnerships to capitalize Retail & Aviation Fuel segment JIIPE : Develop recurring business based on high quality tenants 3 Maximize shareholder value creation 4

5 Leading Logistic Supply Chain Backbone for the whole operations Extensive Infrastructure High Barrier to Entry Extensive Network in Major Ports across Indonesia Essential for expansion in the archipelago Hard to Replicate Ample Land for future expansion for AKR Major reason to partner with AKR Logistic Facilities Sea ports in Indonesia River ports in Indonesia Storage Tanks Terminal Self-Propelled Oil Barges Warehouses Trucks Harbour Mobile Crane Total/Capacity 9 ports 6 ports 666,000 KL 12 units 25 units +/- 350 units 8 units Medan Lampung Pontianak Palembang Palaran Melak Muara Tewe Banjarmasin Stagen Bitung HUBS / SEA PORTS Jakarta Semarang Hubs / Sea Banten Ports Sea PortsSurabaya River Ports SEA PORTS RIVER PORTS Bali 5

6 Leveraging Extensive Network enable to be first mover when opportunity arises Deregulation of unsubs. petroleum Deregulation On retail fuel Deregulation on public port Govt removed subsidy for gasoline Open access for jet fuel business Pre forward Chemical distribution AKR entered petroleum business by selling industrial diesel First national private company to sell subsdiesel AKR opened retail station AKR with Pelindo 3 set up the first PPP deep sea public port and JIIPE Set up JV to develop retail network for high octane gasoline Set up JV with AirBP to sell jet fuel Lubricant Industrial Gas LNG receiving terminal Cold storage Core business in logistic/supply chain as platform, while adding relevant products, leveraging the same assets Growth are not limited by current capacities Minimize additional capex for expansion 6

7 Business Segments CORE BUSINESS NEW VENTURES Logistic services Chemical distribution Petroleum distribution Industrial & Port estate AKR-BP Retail Aviation & Lubricant Manufacturing Has a complete and integrated logistics infrastructure, whether in the form of warehouses, storage tanks to trucks. Offers a Managed Inventory Vendor system for key customers * As of 2017 Distributing basic chemicals such as chloralkali, solvents, As well as organic and non-organic chemicals Innovate by building the first storage tank terminal in Indonesia. Has been developing the fuel distribution business since 2005 Offering both subsidized and nonsubsidized fuel. Fuel products offered: Solar, RON 92 Gasoline, Fuel Oil, and Industrial Oil. Investing in JIIPE located in Gresik, East Java The area under development includes 1,761 hectares for industrial estate, 406 hectares for seaports and over 800 hectares for residential and commercial areas 3% Rev 25% Rev 66% Rev 3% Rev Castrol branded lubricants Retail Petrol Station AKR-BP, completed with Convenience store Aviation Fuel Produces wood adhesive. 3% Rev 7

8 Tank Terminals located at major ports Jakarta Tank Terminal, Tanjung Priok, KL; 51% owned by AKR Tanjung Perak, Surabaya KL Banten Ciwandan, KL Stagen, Pulau Laut, Kalimantan; KL Pontianak Kalimantan Barat; KL Bitung, Sulawesi Utara ; KL 8

9 Transportation include Land, River and Sea Sea & River Transportations SPOB AKRA 30 SPOB AKRA 60 SPOB AKRA 70 Land Transportation Chemical tanker Fuel trucks/ tanker 9

10 AKR continues to expand its strong infrastructure JTT Expansion: 100,000 cbm tanks JTT currently serves import and distribution market in Greater Jakarta for fuel products with current capacity of ~250,000 cbm Commercial occupancy rates for JTT increased to 75% in 2016 and occupancy of Mogas tanks reached 100% in Apr 2017 Key drivers for demand have been:- Govt. decision to lift subsidies for Mogas and reduce subsidies for Diesel, since Jan 1, 2015 Growing demand from international players like Shell, Total etc. for rising Mogas volumes after lifting of subsidies JTT will be adding ~100,000 cbm capacity in 2018 to take advantage of increasing demand With increasing demand resulting in risking occupancies and addition of tanks, JTT revenues are expected to be ~60% higher in 2020 vs 2018 Terminal Nilam Utara: Add 70,000 KL tanks in Phase I Expected to commission 70,000 KL tanks in Tanjung Perak, of which 40,000 KL for HSD & 30,000 KL for CPO AKR Storage Capacity (in '000 KL) is forecasted 10

11 Strong Business Model Allows for rapid growth amid high-interest rate environment CORE BUSINESS NEW VENTURES Logistic Backbone of Company s Operation Third party logistic services for liquid/bulky products JTT : Independent storage terminal in Indonesia Chemicals Supply basic raw material to Industrial customers Commision based business model stable margins Long term relationship with principals & customers Growth driven by Indonesian GDP Petroleum Distribution model with minimum risk Pass through mechanism based on benchmark+ costs + mark up Use minimum of capital through the use of Usance LC Risk management through forex hedging Monitoring Net Open Position JIIPE Industrial & Port estate Lowering logistic cost & providing competitive energy Generating income through land sales, port operation, and sustainable Recurring income from utilities Retail Petroleum, Aviation & Castrol Lubricant Increase retail outlets, grabbing opportunities from number of vehicles growth and government deregulation Product strategy : High Octane Gasoline Grabbing opportunities from middle up economy growth and governments' commitment in developing infrastructure 11

12 Market leader in Chemicals Business Chemicals Revenue (bidr) 4,545 1,507 1,983 1,641 1,934 2,648 2,990 3,084 3,206 3,439 3,351 Commissioned products Products sold include: Caustic Soda Liquid PVC resin Hydochloric Acid Sodium Hypochloride Industries served include textile, pulp and paper, fertilizer, pharmaceutical, chemical, plywood, food, consumer goods etc Growth is in line with GDP Products sold include: Caustic Soda Flakes Soda Ash Sodium Sulphate Sulphuric Acid Methanol Trading products Focus on selected products with high volume Industries served include textile, pulp and paper, soap, glass, pipes,cement, plywood, consumer goods etc Asahimas Chemicals Solvay USA 12

13 Strong Revenue Growth in Chemicals business New Capacity Commissioning and Rising Unit Prices +20% +13% Revenue 3,084 3,206 3,439 3,351 4,545 Maintain market leadership position 35% uplift in 2017 revenue driven by:- Strong volume growth of ~13% (due to new capacity commissioning) and 20% growth in unit prices Chemicals business remains strong:- Largest distributor of basic chemicals in Indonesia ~ 70% commission based business : Steady & Solid profitable growth Long term relationship with Customers and Principals Growth drivers for 2018 Asahimas Chemical (ASC) completed expansion of capacity to 700,000 DMT in 2017, a 40% increase from existing capacity of 500,000 DMT Caustic soda will be the growth driver for 2018 Maintain focus and consolidate position in domestic market, inline with Asahi strategy, while competitor focus on intl. markets Growth is to be supported by Indonesian economy growth and rising demand from Rayon, soap, textile and Alumina (Bauxite) industries 13

14 Petroleum Business in Indonesia 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Domestic fuel consumption volume - '000 KL H17 Avtur Diesel RON 88 RON 90 above Others PETROLEUM PRODUCTS IN INDONESIA Unregulated Price Business to Business Products: High Speed Diesel (HSD) Fuel Oil (FO) Jet Fuel IDO High Octane Gasoline RON 90 and above High quality retail diesel Regulated Price Subsidized Retail Diesel Unsubsidized Gasoline Ron 88 (Only by Pertamina) 14

15 Industrial petroleum demand growth looks strong going into 2018 Petroleum volume by Product (2018) Factor Outlook Impact Subsidized Diesel 9% Gasoline Retail Industrial petroleum 90% Mining sector Coal price increased by 65%, from average of $62/ton in 2016 to $102/ton in March 2018 Coal production in 2018 expected to be 475 Mn MT (vs 450 Mn MT in 2017) Rise in development of smelters in Kalimantan and Sulawesi Higher demand for HSD Petroleum volume by geography (2018) Overall, mining activity is expected to increase in 2018 Plantation Higher CPO production of 36.5 Mn MT expected in 2018, rise of ~20% from 2017 Higher demand for HSD General market Infrastructure growth and developments (5.2% growth) to result in increased construction activity Higher demand for HSD 15

16 Gasoline market growing faster Accumulated Length of Highway (Km) 1855 Population of Indonesia (million) F 2025F 2035F 2045F Domestic sales 4W - total 11.2 M unit Population of Indonesia grows 15-16% every 10 years Car sales in Indonesia has recorded CAGR of 11.8% during Highway development in Indonesia has grown almost double from 655km to 1,122 km since The government is targeting total length highway of 1,855 km Source: Toll Road Regulatory Body (BPJT); Statistics Indonesia, Gaikindo 16

17 Changing Consumer Preference to High Octane Gasoline Robust Outlook in Higher Octane Gasoline Market Increase in Consumption of Non-Subsidized Gasoline in Indonesia 60,000 Fuel volume - transportation 50,000 40,000 30,000 20,000 10, ,806 4,790 5, H17 Source: Handbook of Energy 2017 (Ministry of EMR) Avtur RON88 RON92 RON 95 RON 90 Dex ADO Biosolar Others Indonesia moves to higher octane gasoline (unsubsidized). Volumes of RON 90 and above have jumped from only 1.2m in 2014 to 10.9m KL in Increasing demand for gasoline due to growing number of vehicles (addition of over 1m units of 4W and ~6m of 2W per annum) Growing number of newer vehicles that requires higher octane gasoline and low penetration rate of petrol. Number of station per capita 1 :35,000 vs Malaysia 1:8,500. Government is to require car manufacturer to produce car with Euro 4 standard by September 2018 (from currently Euro 2) 17

18 JV with BP, for retail distribution of Gasoline expected to open 350 SPBU over the coming years Strategic partnership Focus on differentiated offering 49.9% 50.1% High Quality Lubricants Retail Stores High Quality gasoline/diesel High Quality Lubricants Retail Stores Castrol branded lubricants : Distribution of Castrol branded lubricants Castrol Bike point Retail Convenience store High quality of service Superior technology from BP to offer high end products 18

19 JV expects to open 14 outlets in 2018, First one Scheduled to open in Q AKR and BP have set-up a JV to retail non-subsidized petroleum fuels in Indonesia Focus cities Retail service outlets will also offer convenience stores, lube-bay (Castrol Bike point) and other value added services to consumers JV expect to open 14 outlets across Jakarta and Surabaya in 2018 JV targets to open 350 outlets over the coming years Huger market opportunity due to deregulation by govt. and changing consumer behavior:- 19

20 Subsidized diesel more certainty in govt s allocation Retail distribution volumes continue to grow BPH Migas appointed AKR to distribute subsidized thou KL fuel for 5 years ( ) under P3JBT and P3JBKP program AKR received quota of distributing 250,000 KL of subsidized diesel in 2018 Growth is expected to continue in 2018 AKR opened new fuel stations in Ledo and Batang Tarang to support 3T program of the government 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Island Number of Petrol Stations Java 57 Sumatra 37 Kalimantan 41 Total

21 GOVERNMENT REGULATION & THE IMPACT The Ministry of Energy and Mineral Resources has issued regulation Peraturan Menteri No 21/2018 to tighten control over the pricing of non-subsidized fuels, due to inflationary concerns. Under new regulation fuel distributors need to report to Govt. and can seek approval for increasing the non-subsidized retail petroleum products This regulation impacts mostly on the unsubsidized higher octane gasoline, while industrial fuel and aviation products are exempted. Industrial fuel accounts for approximately 90% of our current petroleum volume while unsubsidized gasoline accounts less than 5%. No impact on subsidized fuel 21

22 BP AVIATION - AKR Opportunity in Aviation Fuel Business Aviation Fuel Demand (mio KL) Source: Handbook of Energy Economic Statistics of Indonesia 2017; Pertamina s Annual Report AKR leveraged existing assets to take advantage as first mover in Aviation Fuel Industry Aviation Industry has grown in line with middle up class economy growth and government s effort in developing infrastructures Indonesian aviation fuel market is currently at around 6 million KL and growing fast No significant player in this industry beside incumbent Trusted Partner 49.9 % Strategic partnership 50.1 % Air BP supplies 7 billion gallons of aviation fuel to over 2 million aircraft annually Air BP supplies to over 800 locations representing more than 400 commercial airlines in over 50 countries Big opportunity PT Dirgantara PetroIndo Raya Indonesia is the only Asian country with single aviation fuel supplier The country has 57 existing airports and 15 new airports are planned 22

23 Indonesia large market for lubricant Opportunity in Lubricant Business Market volume of lubricants worldwide in 2017 (in 1,000 tons) Asia Countries dominating Lubricant Consumption by 45% in 2015 Indonesia is included in Top 10 of World Lubricants Market Among ASEAN countries, Indonesia dominating 39% lubricant consumption with CAGR 5%. AKR will distribute lubricants by synergizing with petroleum business distribution Source: 23

24 JIIPE -a multi-million USD project with self funding capabilities Main Objectives: No Capital Call for AKR To maintain dividend policy of min. 30% No deterioration in B/S of AKR Aim to develop recurring business Sell land as means to provide ST cash flow/ project funding To bring partners when needed Flexibility in terms of financing ready for future floating Summary Balance Sheet of PT BKMS Current Assets Non Current Asset Total Assets 3M ,039 2,885 1,787 2,028 4,826 4,913 JIIPE Total Investment in PT. BKMS & PT. BMS is Rp 5,701 billion as of 31/03/18 JIIPE development is funded through equity (Rp. 3.5 T) and shareholder loans (Rp 1 T) Third party debt for JIIPE financing is very low (Rp 306 Bn) Summary Balance Sheet of PT BMS Current Assets Non Current Asset Total Assets 3M Shareholder Loan Loan Equity 1, ,632 1, ,440 Loan Equity

25 JIIPE The First Integrated Industrial Estate in Indonesia JIIPE offers competitive advantage on logistic cost and supporting infrastructures Targeting large industries with the needs of supporting infrastructures (including port, utilities, water, waste management, etc) Developing recurring income business to mitigate cyclicality in industrial land sales JIIPE offers multimoda transportation (road, rail and sea) to reach domestic and global market JIIPE port offers deep draft (-14 LWS) to cater cape size vessels up to 150,000 DWT Direct Sales of electricity to captive tenant at competitive rate (no need IPP) RESIDENTIAL ESTATE 800 ha PORT ESTATE 400 ha INDUSTRIAL ESTATE 1,761 ha 25

26 Supported by the Deep Sea Port in Indonesia Long term concession for 76 years - until 2094 Deep sea port with current depth 14 LWS (future 16 LWS) Has handled 1.3 mio MT cargo and drybulk in 2017 and expanding Partner with SOE operator Pelindo III 26

27 The Development of JIIPE Deep sea port is Keep Going Container Coal Dry Bulk Reclamation 80 Ha in 2014 Liquid Gas Reserved Offshore Fishing Next Project First jetty, 250 m length and 30 m wide already in operation for dry bulk and general cargo. Natural -14 LWS for loading and unloading, capacity 60,000 DWT m jetty extension for multipurpose and oil&gas In 2018, dredging project until -16 LWS Next Project: Reclamation for port land 69 Ha and 500 m jetty and 5,000 m 2 warehouses for logistic bonded center 27

28 Stage 1 development on track, Stage 2 to start next year Stage 1 ( ) Land Area +/- 800 ha Road Access +/- 9 km to port estate 23 MW Power plant GAS & MFO 100 m3/hour Water Treatment Plant Marketing & Port operational Back Office 80 ha reclamation area 250 x 30 m (Jetty 1) Stage 2 ( ) Land Area +/- 465 ha 500 MW Power Plant (GAS) 1000 L/s Water Treatment Plant 139,87ha Reclamation Area for Coal Terminal & Storage Tank Additional Jetty 1 & 2 (1500 m) Opportunities for further businesses: Power LNG terminal Industrial Gas Cold Storage Data Center 28

29 Area (in Ha) Revenue (Rp Bn) JIIPE Land Sales is Keep Growing Land sales doubled from previous year resulting in strong revenue performance E F Strong Profitable growth (GPM > 50%) drive cash generation from land sales till , after which Recurring income (from utility sales) starts kicking in for the project. Customers have started construction of facilities Two companies (Clariant and Unichem) have already commenced operations Clariant, after successful operation of their first facility have bought additional land for expansion 2 other companies are currently constructing and 3 others are expected to start construction in early 2018 >1,500+ manpower are expected to be employed once all above facilities are completed 29

30 Key Ratios P&L Balance sheet 3M 2018 highlights Q1 18 Q1 17 % (YoY) Q4 17 Assets Liabilities Equity 18,922 8,959 9,963 16,604 8,251 8,353 14% 9% 19% 16,823 7,794 9,030 Sales Gross Profit Operating profit NP After tax EPS (Rp) 5, , % -8% -29% 260% 258% 4, ROA ROE Net gearing 8.6% 16.1% 0.17x 6.2% 14.9% 0.33x 2.4% 1.2% -0.16x 7.1% 15.9% 0.16x Key highlights *) ROA without Extr.gain: 4.5% ROE without Extr.gain: 8.4% Net profit growth Net Profit came in higher in 3M 2018 at Rp 929 bn Growth in Revenue Revenue rose by 34% for 3M18 at Rp 5,834 bn Financial position & cashflow remains solid Profit from discontinued operations: Gain from the disposal of Khalista assets is Rp 664 bn, while from divestment of BKP is Rp 64 bn Petroleum revenues increased by 47% from Rp 2,880 billion in 3M17 to Rp 4,247 bn in 3M18 Chemical revenues increased by 29% from Rp 1,037 bn in 3M17 to Rp 1,333 bn in 3M 18 Low leverage : Debt to EBITDA 2.7x Liquidity : Current ratio 1.7x Asset turnover 1.2x 30

31 Core business grew 12% y/y in 1Q18 Total Gross Profit down by 8% due to the absence of industrial land sales NO SALES BOOKED* (in Rp bn) 1Q18 1Q17 4Q17 Y/Y Q/Q Business Trading & Distribution % 29% Logistics % -26% GP Core Business % 24% Industrial Estate (2) Na Na Others % -39% Gross Profit - Total % -8% Core Business Profit (Rp bn) 403 Industrial Estate Profit (Rp bn) Key highlights Q1'17 Q4'17 Q1'18 Q1'17 Q2'17 Q4'17 Q1'18 *) Industrial Estate Land sales accounting as per current GAAP on handover Trading and Distribution growth Gross profit from trading & Distribution came in higher in 3M 2018 at Rp 382 bn Core business continues to deliver; Gross profit from core business (exclude sales of land) grew by 12% y/y from 1Q17 and by 24% q/q from 4Q17 to Rp 403 bn Q1 18 Gross profit from Trading and Distribution contributed 91% GP Core Business Q1 18 vs Q4 18 higher by 24% GP Core Business Q1 18 vs Q1 17 higher by 12% 31

32 Net profit of 3M 18 accounted Rp 929 billion Amount in Rp Bn 3M 17 3M 18 Sales & Revenue 4,341 5,834 Cost of Sales and Revenues (3,890) (5,418) Gross Profit Gross Margin (%) 10.4% 7.1% General Admin & Selling Expenses (139) (176) Other Operating Income (Expenses) 28 1 Operating Profit Operating Margin (%) 7.8% 4,1% Net Finance Income (Expenses) (6) (8) Share in income of associates 3 2 Profit before Final & Income Tax Tax expense, net (48) (43) Profit for the period Gain on Divestment 729 Non Controlling Interests (30) 10 Profit for the period attributable to equity holders of the parent entity Net Margin (%) 6.0% 15.9% EBITDA EBITDA Margin (%) 9.2% 5.7% Higher due to pre-operation of JV with BP Gain from disposal Khalista assets: Rp 664 bn Gain from sales of shares of BKP: Rp 64 bn EPS

33 Stronger Financial Position with Cash Growth and Debt Reduction Amount in Rp Bn M 18 Current assets 7,391 8,816 10,982 Cash 1,367 1,771 1,842 Trade receivables 2,569 2,696 3,867 Inventories - FG 862 1, Inventories - Land 2,270 2,579 2,633 Other current assets ,643 Non-current assets 8,439 8,007 7,940 Fixed assets 4,562 4,215 4,017 Investment / Land estate 1,952 1,560 1,639 Other non-current assets 1,926 2,232 2,284 TOTAL ASSETS 15,831 16,823 18,922 Cash position improved due to cash generation from divestments and operations Current liabilities 5,816 5,429 6,454 Trade payables 3,184 3,777 4,540 Short-term loans Current maturities of longterm loans 1, Other current liabilities Non-current liabilities 1,941 2,364 2,505 Long-term loans Bond Ser "B" New Bond 1,000 1,000 Other non-current liabilities Equity (incl. minority int.) 8,074 9,030 9,963 Total LIABILITIES + EQUITY 15,831 16,823 18,922 Total Debt 3M 18 down to Rp 3,052 Billion from Rp 4,031 Billion in 2016 The matured bonds of Rp 623 Billion has been paid with new bonds accounted Rp 1 Trillion 33

34 Cash Position 3M 18 increased to Rp 1,842 Billion Amount in Rp Bn 3M 17 3M 18 Receipts from customers 4,546 5,906 Payment to suppliers & opex (4,013) (5,904) Operating cash flow Land acquisition & development related (337) (139) Interest income (expense), net (14) (7) Taxes (66) (91) Net cash flow from operating activities 116 (235) Capex (148) (377) Net increase in restricted funds (103) Proceeds from Divestment 14 Loan repayment from subsidiary disposed 144 Decrease in short term investment 114 Proceeds from sale of property, plant, & equipment 30 Others 1 Net cash flow from investing activities (250) (76) Short term loans net of repayment Long term loans net of repayment (149) (84) Net cash flow from financing activities Effect of forex changes (22) 2 Net change in cash (21) 71 Beginning cash balance 1,367 1,771 Ending cash balance 1,346 1,842 34

35 Prudent capital allocation Lower leverage Parameter Unit Dec 16A Dec 17A Mar18 A Return on Investment Return On Asset % 6.4% 7.1% 8.6% Return On Equity % 14.8% 15.9% 16.1% Total asset turnover x Receivable period days Inventory period days Payable period days Rebalancing the portfolio through capital allocation to higher return projects, resulting in better returns Active risk monitoring and focusing on high quality clients, resulted in reducing Receivable days Leverage Debt / equity x Net gearing x Bonds Outstanding Dec 16A Dec 17A I/2012 Seri 'A' 5 years 623 I/2012 Seri 'B' 7 years New Bond issuance PUB Serie 'A' 3 years 895 PUB Serie 'B' 5 years 68 PUB Serie 'C' 7 years 37 New issuance Total Bonds O/S Significant reduction in Net gearing to 0.17x, with high cash generation from divestments Repaid on maturity: Dec 21, 2017 Raised Rp 1 Tn from new bond issuance 35

36 Rebalanced portfolio Debt Profile is further improving High cash generation and prudent capital management resulted in low leverage Ample balance sheet capacity to fund future growth NET GEARING D/E 36

37 Robust ROA & ROE Performance during

38 AKR always strives to create value to shareholders Exceptional long-term return for shareholders (total return since 2015: 2,890% vs IDX 613%) Shareholders Shares % Foreign 1,394,372, Local Individual 90,677, Institution 178,822, PT. Arthakencana Rayatma 2,342,456, Total 4,006,329, Market Cap Rp bn 19,629 EPS (Rp) BV (x) 2.31 PER (x) * * annualized 1Q18 incl. extraordinary gain 38

39 Rewarding Shareholders: 2017 Payout is 66.7% 1,202 1,034 1,011 Net Income +21% 12yr CAGR Rp. billion AKRA has Consistent dividend payout history Highest Dividend Payout of 67% in 2017 Year (Rp/share) Rp.billion % payout % ,373 60% % % % % % % 39

40 Recognized for Good Corporate Governance Forbes Award for Top 50 companies in Indonesia and winning 3 years in a row In Top 50 listed companies for Good Corporate governance by Indonesian Institute of Corporate directorship Best Annual report award 4 th year in a row SWA award for Best Wealth Creator Most innovative business in Wholesale category in Indonesia 40

41 Indonesia Focus Areas Redefining strategy with focus on growth from Indonesia Trading & Distribution Logistics Manufacturing Growth Engine Strengthen position in industrial supplies Growth opportunities in new markets Grow subsidized retail volumes, with allocations received until 2022 Expand capacities to cater to growth Increased demand from third parties for JTT terminal Support retail and Aviation JVs Stable operations Stable operations Retail Gasoline with Value added services (JV with BP) Expansion of JTT, adding 100,000 m 3 (JV with Vopak) Aviation fuel distribution (JV with BP planning) JIIPE Execution Ongoing Land sales Power plant Utilities development Recurring income Port operations 41

42 Analysts remain upbeat on AKRA Consensus rating BUYS 8/12 HOLD 4/12 SELL 1/12 Highest TP Rp 8,000 (77% upside) Lowest TP Rp 4,600 (2% upside Source: Bloomberg, 31 May 2018 No Analyst Firm Recommendation Target Px Rp 1 Salman Ali Citi BUY 6,900 2 Erwan Teguh CIMB Add 5,700 3 Timothy Stanish Eva Dimension Hold na 4 Budi Rustanto Valbury Asia Sec BUY 6,000 5 Sumedh Samant JP Morgan Neutral 5,800 6 William Simadiputra DBS Vickers BUY 5,100 7 Aditya Suresh Macquarie Underperform 4,600 8 Arandi Ariantara Samuel Sekuritas BUY 7,000 9 Yuni NH Korindo Sec BUY 8, Wilinoy Sitorus Trimegah Securities Neutral 6, Andrew Franklin Bahana Securities BUY 8, Isnaputra Iskandar Maybank Kim Eng BUY 7,800 42

43 PT AKR Corporindo Tbk Wisma AKR Lantai 8 Jl. Panjang No. 5 Kebon Jeruk Jakarta Barat Indonesia Corporate Secretary corporate.secretary@akr.co.id Investor Relation ir@akr.co.id 43