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May 31, 2012

ABM Allocates Rp 415.74 Billion to Support Subsidiaries

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PT ABM Investama Tbk (IDX Stock Code: ABMM), an integrated energy company with a focus on resources, services and infrastructure, has secured approval from the Annual General Meeting of Shareholders (AGM) to allocate Rp 415.74 billion in net income from the financial year ending December 31, 2011 with the following details:

  1. Rp 1 billion is to be set as reserves, as required by Article 70 of the Law on Limited-Liability Company and Article 22 of the Articles of Association of the Company
  2. The remaining amount of Rp 414.74 billion is to be recorded on net income account

Following the IPO Prospectus of ABM, the Company will begin to distribute dividends from its 2012 Fiscal Year Net Income. Based on the AGM's approval, 2011 net income will be used for business expansion, including strengthening the capital of all subsidiaries, allowing each to grow exponentially in the next five years.

“Net income will be used to strengthen the business of all subsidiaries, capital structure and internal cash of the Company, thus give ample financing capacity for the Company to support the expansion of subsidiaries and boost ABM revenue growth in 2012. Business expansion is expected to provide earnings to shareholders in the upcoming years,” said President Director of PT ABM Investama Tbk. Andi Djajanegara.

ABM management has also submitted a report it would use IPO proceeds of Rp 1.48 trillion in the AGM. In line with the prospectus, 70 percent of the proceeds are allocated to finance business expansion, while 24 percent are marked for refinancing and the remaining 6 percent for working capital.

As of March 31, 2012, some 38 percent or Rp 558 billion of the IPO proceeds in December 2011 has been used for expansion, refinancing and working capital.

ABM recorded Rp 415.74 billion in 2011 net income, a significant growth of 226 percent compared to Rp 127.32 billion in 2010. The net income hike was supported by higher sales by 47.70 percent or Rp 6.62 trillion in 2011, from Rp 4.48 trillion in 2010.

The mining contractor sector provided significant contribution to Company revenue at 44 percent or Rp 2.96 trillion of consolidated revenue for ABM.

Cash and Cash Equivalent balance on December 31, 2011 stood at Rp 1.7 trillion, a growth of 285.34 percent from Rp 433.04 billion in 2010. ABMM booked 102.10 percent growth in assets on December 31, 2011 to Rp 9.88 trillion from Rp 4.89 trillion in December 2010.

“To support the target, ABM has budgeted US$335 million in capital expenditure (capex). The budget sources are 30 percent from internal cash and 70 percent from bank loans, thus our retained earnings will strengthen capital structure and reduce Company costs in seeking funds,” said ABM Finance Director Willy Adipradhana.

The capex will be used by the company to finance subsidiary operations. This year, US$62 million in capex is budgeted for the coal mining, US$119 million for the mining contractor business unit, US$62 million for power solution services, US$73 million for integrated logistics and US$19 million for engineering services.

“The Company’s focus in 2012 is to ensure that business expansion will continue according to plan through investments and strategic cooperation to guarantee sustainable growth,” added Willy.