Jhonlin Agro, Palm Oil Company Owned By Haji Isam That Wants To IPO Raise IDR 366.8 Billion Can Only Divide Dividends In 2024, Why?

Illustration. (Photo: Doc. Antara)

JAKARTA - The oil palm plantation company, PT Jhonlin Agro Raya Tbk (JARR) will only distribute dividends in 2024 with a maximum percentage of 20 percent of net profit. This is published by the company in its prospectus.

The business unit owned by Haji Isam plans to distribute cash dividends to JARR shareholders in 2024 resulting in 2023 net profit with two conditions.

First, the net profit after dividend tax is between IDR 50 billion and IDR 100 at most 15 percent. Second, net profit above Rp100 billion will be distributed as dividends of a maximum of 20 percent.

The Board of Directors of the Company may make changes to the dividend policy at any time, subject to the approval of the shareholders through the Annual GMS.

"There are no negative covenants that can prevent the Company from distributing dividends to shareholders," the management wrote in the prospectus quoted on Thursday, July 21.

For information, up to this prospectus, the Company has never paid or distributed dividends. In addition, the determination of the amount and distribution of such dividends will depend on the recommendations of the Board of Directors of the Company by considering several factors which include, among others:

- Retained earnings, operating and financial results, financial condition, liquidity conditions, future business prospects (including capital expenditures and acquisitions), cash requirements, business opportunities

- Other factors deemed relevant by the Board of Directors

Throughout the first quarter of 2022, Jhonlin Agro recorded an increase in net sales of IDR 1.29 trillion. This net sales shot up 12.433 percent compared to the same period in 2021 of IDR 10.3 billion.

This increase was mainly due to an increase in FAME sales volume of IDR 1.09 trillion, in line with the operation of the company's Biodiesel processing plant in September 2021. The company also released new products, namely Palm Fatty Acid Distillate (PFAD), Crude Glycerin (CG), and Fatty Matter.

The increase in the company's sales also decreased, increasing the cost of goods sold to IDR 1.16 trillion in the first quarter of 2022, from IDR 5.71 billion compared to the same period last year. Despite the increase in cost of goods, the prospective issuer coded for JARR recorded an increase in gross profit from IDR 4.6 billion in the first quarter of 2021 to IDR128.9 billion in the first quarter of 2022.

JARR was also recorded to be able to reverse the current year's loss of IDR 7.8 billion in the first quarter of 2021, to a current year's profit of IDR 80.2 billion in the first three months of 2022. This increase was due to an increase in operating profit of IDR 109 billion.

For information, PT Jhonlin Agro Raya Tbk (JARR) plans to conduct an initial public offering (IPO) by releasing a maximum of 1.2 billion (1.222.950.000) shares, with a nominal value of IDR 100.

These shares represent a maximum of 15.29 percent of the issued and fully paid-up capital of the company after the initial public offering. The plan is that JARR's IPO will be offered to the public at a price of IDR 250 - IDR 300 per share. With this price, it is estimated that JARR will be able to obtain fresh funds of up to IDR 366.8 billion.