London Sumatra, This Oil Palm Company Owned By Conglomerate Anthony Salim Makes A Profit Of IDR 696 Billion In 2020

JAKARTA - The palm oil producing company, PT. PP London Sumatra Tbk, has a positive outlook on 2021. This is based on the positive performance of the company coded as LSIP shares in 2020.

President Director of PP London Sumatra Benny Tjoeng said that his party prepared a number of strategies to maintain performance growth in 2021. According to this officer of the conglomerate Anthony Salim, the plantation industry is expected to remain challenging this year due to the impact of the COVID-19 pandemic around the world.

"We will continue to strengthen our financial position, control costs and efficiency, increase productivity, prioritize capital spending on aspects that have the potential for growth, and focus on sustainable good agricultural practices," Benny said in a written statement, as quoted on Monday, March 8.

London Sumatra has indeed posted a brilliant performance in 2020, they recorded revenue from contracts with customers of IDR 3.53 trillion, even though it was 4.4 percent lower compared to 2019's acquisition of IDR 3.69 trillion.

However, the decline in revenue was partially offset by an increase in the average selling price (ASP) of palm products by up to 26 percent year on year (YoY). The price increase also succeeded in bringing London Sumatra to record profit growth for the year attributable to the parent entity by 174.12 percent to IDR 696.01 billion, compared to 2019's acquisition of IDR 253.9 billion.

Benny explained that the price of crude palm oil (CPO) managed to increase significantly in the second half of 2020, after having dropped to its lowest level in the second quarter of 2020. The increase in CPO prices is thought to be driven by expectations of the impact of weather conditions, limited supply of CPO, and increased demand for soybeans.

"The increase in company profits was also supported by the company's efforts to control costs and efficiency. This was also reflected in a number of expense items that were successfully suppressed, such as cost of goods sold to IDR 2.46 trillion compared to 2019 amounting to IDR 3.13 trillion," he explained.

Then, sales and distribution expenses also decreased to IDR 52.9 billion, general and administrative expenses to IDR 212.69 billion, and other operating expenses to IDR 11.16 billion.

London Sumatra also maintained its financial position with total assets of IDR 10.92 trillion, including cash and cash equivalents of IDR 1.96 trillion. LSIP also did not provide funding through debt as of December 31, 2020.

From the production side, the production volume of core Fresh Fruit Bunches (FFB) decreased 11.7 percent YoY to 1,294,716 tons mainly due to the impact of weather and oil palm replanting activities. In line with the lower contribution of external FFB, LSIP's total CPO production also fell 16.9 percent YoY to 330,936 tonnes.

From that, the CPO sales volume decreased 22.2 percent yoy to 324,939 tons and the sales volume of PK and PK derivative products decreased 21.9 percent yoy to 97,552 tons.