ESSA

Preface

The public listed companies in Indonesia are only 507 companies; the average growth of number of listed company in the last ten years is only 5.4 % a year. That means many companies in Indonesia considered to do initial public offering due to several reasons. In Indonesia it needs approximately 4-6 weeks for issuance time, meanwhile in peers it only needs average 2 weeks. On other hand the company seems afraid to pay higher tax as the disclosure of its financial information which is required by government. For example, the Wilmar group, a domestic company, despite it is listed in Singapore; it is not listed in Indonesia. 

Bond market is also facing same situation, the government bond is dominated, and its contribution is almost 54 % of total bond in the bond market. Lengthy issuance time of bond increased the cost for issuing corporate bond.  It needs more than two months to do. It is much longer compared to peers such as Singapore, Thailand and Malaysia. Big corporation in Indonesia commonly has subsidiary in abroad which is used as entity to capture fund through bond issuance.

In 7^th October Indonesian government has announced the third economic stimulus to improve economic growth. Government decided to do relaxation of regulation in getting business permits and business license. Government is also giving discount of tariff in electricity and providing financial support for small medium enterprise. Few permits for investor such as use of land will be shortened in its process in getting permits.

The relaxation of regulation and discount of tariff were able to increase currency exchange rate to USD, the currency was under 14,000 / USD. The capital inflow from oversea was attracted to Indonesia again. But it is possible that the capital from foreign will be move out at the end of the year.

Surya Essa Perkasa

Surya esa perkasa has LPG offtake agreement with PERTAMINA since 2006, the company is only transmitting its LPG to Pertamina and its subsidiaries based on the agreement. Liquefied Petroleum Gas generally use as fuel for heating appliance in the kitchen, hotel, shopping center and etc. The company has LPG refinery which is used to change natural gas in to LPG. The company was the second largest LPG producer in Indonesia. The company is also producing condensate and propane.

In 2015 the company planned to build new LPG refinery valued more than IDR 1.9 trillion. In 2014, it also started to build ammonia factory valued USD 830 million to complete its expansion project. The factory is expected to be finished in 2017.

In 2014 the sales declined 5.5 % compared to sales in 2013. The weakened in economic growth may be as the key reason for the decline, energy consumption from corporate segment declined as the decrease in production capacity. Consequently, the net income in 2014 decreased more than 21 % compared to net income in 2013.

LPG segment was as the biggest contribution of total revenue in 2014. It was more than 88 % of total revenue in 2014.

ESSA is owned by Trinugraha Akraya Sejahtera as the largest share holder with 30 %, the second largest share holder is Ramaduta Teltaka.  

In non current asset there was a good will amounted to more than USD 20 million or more than 16 % of total asset in 2014. The company invested USD 31 million to acquire its subsidiary, the investment exceeded its fair value and as the result of that there was an increase in goodwill amounted to USD 23 million.