Company latest updates – December 2016

Jakarta, 10 March, 2017: FajarPaper trading as PT Fajar Surya Wisesa Tbk (FASW.JK) today announced a record breaking profit performance, on the back of strong sales from a highly successful move into high quality lightweight packaging papers. Net sales climbed 18% to Rp 5,875 billion driven by higher prices, with net income boosted by over 350% to Rp 778 billion or Rp 314 earnings per share. FajarPaper’s audited financial statements for the twelve months ended 31st December, 2016 and 2015 can be found by following this link: http://www.fajarpaper.com/investor-relations/financial-reports

 

Substantial demand for the new range, as well as established products, coupled with lower raw materials usage, reflecting the lightweight specification of the new range, plus well contained factory overheads were the main factors to boost gross profit margins from 8% to 20%.

Operating expenses were well controlled with the focus of sales activity being to serve the domestic market. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 190% to Rp 1,190 billion.

Despite a degree of uncertainty in general over consumer spending power amidst slow economic growth in 2016, Yustinus Y. Kusumah, President Director of FajarPaper remained upbeat. “The encouraging reception for our new products validates the commitment we made in the previous year to upgrade product specifications and pursue further capacity expansion. The substantial turnaround in our financial performance is the result of these strategic decisions,” he said. 

The company’s newest paper machine, PM8 is due to commence production this month and has the capability of being totally dedicated to the lightweight PerformaMedium, and together with PrimeLiner range, currently account for about 50% of total monthly sales giving the company’s considerable potential. The new PM8 paper machine will add 350,000 tons to raise total manufacturing capacity to 1,550,000 tons per annum.

Strong cash generation during 2016 has helped to improve the company’s financial position. A stronger Rupiah has contributed to reducing foreign exchange translation costs.

 

The exceptional performance in 2016, and the timely investment in new capacity place the company in a strong position for the future. Global packaging trends indicate substantial growth potential for paper packaging and particularly the use of recovered paper. Indonesia’s fundamentals stand out, including demographics, increased disposable income and substantial new investment in modern retail. Leading multinational FMCG companies, such as Indofood, Unilever, Aqua-Danone and Wings, among others, constitute a substantial end user customer base. For the medium term, improvements in infrastructure and the rapid rise of online shopping with the need for robust recyclable packaging are further positive factors.