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Thursday, November 5, 2015

ABM INVESTAMA: ABMM

The company was founded in 1970 by the hamami’s family. In that year they established Trakindo Utama, sole authorized dealer of Caterpillar in Indonesia. Then in 2011 the holding company of the group, ABM investama was acquired by the Velle Verde pte Ltd, a company located Singapore that is owned by the Hamami’s Family. Through that acquisition, Velle Verde pte ltd acts as the biggest shareholder. In the same year, ABM investama did initial public offering in Indonesia Stock Exchange.

According to annual report the company and its subsidiaries operate in contractor and mining service, power engine rental, logistic and vessel rental, side service division and remanufacturing and manufacturing.
In 2014 the sales declined 6.9 % compared to sales in 2013, the downturn was occurred as the global coal price in 2014 fell compared to its price in 2013. On other hand import of coal in china has also decreased. In 2014, the net profit was negative due to impairment loss of mining property that was amounting to more than USD 67 million. The net profit margin in 2013 was 0.27 %.

Meanwhile the cash cycle in 2014 seemed better than 2013, the gross profit margin was also slightly improved from 31 % in 2013 to 34 % in 2014. In 2015 the company may experience better profit margin if there will be no a big impairment loss on mining property.

The biggest contribution of revenue in 2014 was from mining contractors and coal mining segment that was contributing more than 58 % of total sales. The second biggest segment was resulted from power engine rental.       

The key person of the company, Achmad Ananda Djajanegara, seemed concern to government priority in building 35,000 power plants. Through its subsidiary in power plant segment the company plan to participate in building new power plant to increase energy supply. Sewatama was able to increase its market share in Independent Power Plant as government support the private sector to invest in IPP sector to provide people with electricity. In 2014 the company succeeded in completion of diesel power plant project in Bali Island and Medan city.

Law that regulates mineral and coal mining activities is UU minerba, this law imposes the mining company a duty to supply the domestic markets. This regulation also imposes the company that owns mineral concession to build processing and refinery facilities. This law is also implementing such limitation of exploration area and production activities. As a result of this, there are particular risks in doing business in mineral and coal mining such as no available buyer at domestic, capability to build refinery or smelter and decrease of reserves.
The company seemed capable to face challenge in this business includes UU minerba.












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