Tuesday, June 24 2003 - DIVERSIFIED Kumpulan Guthrie Bhd may list PTMinamas Plantations on the Jakarta Stock Exchange sooner than 2005 tocapitalise on the Indonesian subsidiary’s good performance.
We could do it earlier ... we are preparing the groundwork for the listingand also looking for the right timing,” Kumpulan Guthrie group chiefexecutive Tan Sri Abdul Khalid Ibrahim said.
He did not give an expected date for the listing but said timing wascrucial because of the economic and political developments in Indonesia.
The group wants to float 30 per cent of its investment in Indonesia inorder to be listed even though the authorities require a public spread ofonly 25 per cent, he said.
The group has made a commitment to sell 10 per cent of Minamas to theIndonesian public as part of the deal.
The listing will give us a permanent feature in Indonesia because we wantto be there for a long time and attract both local and foreign partners,Abdul Khalid said.
It is understood that the listing is being brought forward to capitaliseon the good prices of palm oil now.
Guthrie had in March last year completed its purchase of MinamasPlantations for RM1.4 billion from the Indonesian Bank RestructuringAgency (Ibra). Negotiations on the deal started in 2000.
It paid some US$330 million (US$1 = RM3.80) for 25 palm oil plantations,which cover a total of more than 260,000ha in Sumatra, Kalimantan andSulawesi.
Ibra took over the plantations in 1998 from a local conglomerate, theSalim Group, after it ran into trouble following the economic crisis thathit the country in 1997.
Abdul Khalid said the group has had discussions with broking houses andinternational banks as part of preparations for the listing.
However, the group is cautiously optimistic on its performance in 2004when the Indonesian presidential elections is scheduled to be held.
We want to be part of the Indonesian capital market and we qualify basedon the size of plantations and other assets as well as a good financialperformance.
Abdul Khalid said Minamas is expected to improve Guthrie’s overallfinancial performance for financial year ending December 2003.
Since it bought Minamas, production of crude palm oil produced inIndonesia was less compared to its Malaysian operations but by end of2002, it improved and surpassed Malaysia operations by 30 per cent.
Minamas made a group pre-tax profit of RM33 million in the first quarterof 2003 and RM57 million for the whole of last year.
"We expect to be profitable this year should palm oil prices stay abovethe RM1,200 a tonne level for the next two quarters. The trend is expectedto continue as more trees will mature."
Guthrie made a net profit of RM62.1 million in its first quarter endedMarch this year on the back of a RM763.4 million revenue. It made a fullyear net profit of RM342.2 million in 2002. Palm oil contribute between 70and 80 per cent to the group’s revenue.
According to Multex Global Estimates’ compilation of seven researchhouses’ forecasts, Guthrie is expected to make a net profit of RM204.5million by year-end and RM173.3 million in 2004.
On the progress of the RM750 million Guthrie Corridor Expressway highwayproject in Bukit Jelutong, Selangor Abdul Khalid said initially there weresome delays.
"They were mainly issues related to acquisition of land but civil works isnow on track and the expressway should be ready for public use by thethird quarter of next year."
He added an economic spillover can be expected on 4,050ha of land adjacentto the highway stretching over 25km. Once completed, the area will be hometo 400,000 people in 70,000 units of housing and other real estatedevelopment.
Abdul Khalid also said that the group fully supports the Government’smulti billion Bio Valley project and has in hand 1,000 high yielding palmtrees that can yield between 40-50 tonnes of fresh fruit bunches per ha ayear.
"With good clones and an oil extraction rate of 20 per cent, we canproduce ten tonnes of oil palm per ha from the industry average of fivetonnes per ha," said Abdul Khalid.
Guthrie’s biggest shareholders are Permodalan Nasional Bhd with 46.01 percent, Amanah Raya Nominees Sdn Bhd 27.2 per cent and Employees ProvidentFund Board 7.17 per cent.