Chandra Asri reports 42.4% jump in net profit

IDX-listed PT Chandra Asri Petrochemical Tbk (CAP), the largest integrated petrochemical company in Indonesia, reported stronger 2015 net profit thanks partly to lower cost of raw material triggered by the oil price drop.

CAP said in a statement Tuesday that net profit last year jumped by 42.4 percent to US$ 26.3 milli from $18.4 million in the previous year.

CAP's net revenue fell to $1,377.6 million in 2015 from $2,460.1 million in 2014 largely due to lower sales volume (dropped by 25 percent) as a result of the 85-days planned shutdown for Turn around Maintenance (TAM) and tie-in works for the Cracker Expansion project.

The company, however, said gross prof it margin jumped from 4.8 percent to 10.6 percent due to stronger product margins coupled with low cost of raw materials/feedstock (Naphtha) where Naphtha prices tend to follow crude oil prices.

?The solid financial performance recorded in 2015 demonstrates the company's ability to deliver positive growth momentum despite challenging business and operating conditions. This reaffirms our strategy to expand capacity to capture strong petrochemical growth in Indonesia and optimise integration to further improve the value of our products,? CAP said in the statement.

In this connection, on December 9, 2015, CAP recorded a significant milestone with the successful Mechanical Completion of its Cracker Expansion project within budget and time. Likewise, the TAM was completed on time and the Cracker plant was restarted with on-spec products achieved on December 19, 2015, 5-days ahead of plan. ?This expansion will boost CAP's Ethylene and by-products production by some 40 percent and extend our petrochemical foot print in Indonesia."

In addition, in June 2015, CAP took final investment decision with its joint venture partner, Compagnie Financiere Du Groupe Michelin (Michelin), to construct a synthetic rubber plant through PT Synthetic Rubber Indonesia . The synthetic rubber plant, located in Cilegon, Banten, will have a capacity of 120thousand tons/year is targeted to be operational by early 2018.

CAP said it is optimistic that with the increase in production capacity from the Cracker Expansion, rejuvenated plant facilities following TAM and the projected healthy product margins for the petrochemical industry in the near term, it will be able to continue the positive growth momentum in the company's performance and contribute to the growth of Indonesia's petrochemical industry.

Editing by Reiner Simanjuntak