Report of the Board of Directors
Dear Shareholders and Stakeholders,
Company Performance 2023
2023 is a very tough business period for the company, especially due to delays in implementing the investment that will be made by the company's prospective Strategic Partners in the first quarter of 2023. Management must immediately make a decision to look for a new Strategic Partner.
After taking various steps to ensure the "delay" of investments to be made by the Company's Strategic Partners; then on July 7 2023, management appointed PT Bahana Sekuritas as a Financial Consultant in the context of fundraising for company projects and at the same time as an Underwriter for the Issuance of Green Bonds.
The appointment of PT Bahana Sekuritas as the Green Bond Underwriter is in line with the company's preparations for the issuance of TGRA-1 Green Bonds with a target of IDR 500 billion in 2024.
Until the end of December 2023, the fundraising process carried out together with PT Bahana Sekuritas, has reached the stage of finalizing the Financial Model and carrying out updates of the feasibility study on the Company's 3 PLTM projects, namely Sisira PLTM, Batang Toru-3 PLTM and Batang Toru-4 PLTM; and has been discussed with prospective Financing Banks and is the final draft for exploring potential Strategic Partners.
The Company's financial performance during 2023 has not been able to meet the expectations of management, the Board of Commissioners and the expectations of Shareholders; because the company's source of income comes from Power Plant Maintenance Services, which has been the company's source of income reserves, has not shown better development than in previous years. This is because management focuses on fundraising efforts to finance the company's projects which already have an Electricity Purchase Agreement (PJBL) with PT PLN (Persero) UID North Sumatra.
As a result of the company’s reduced income, during the 2023 period the company experienced a loss of IDR 8.53 billion; when compared with 2022 Profit of IDR 6,92 Billion. However, in the 2022 Profit, the actual Profit recorded from the Adjustment Journal due to the impact of measuring the fair value of affiliated party debt was IDR 9.73 billion; Thus, in the 2022 period, the company has experienced a comprehensive loss of IDR 3.51 billion.
Thus, losses for the 2023 period increase by IDR 5.02 billion; This loss corresponds to the decrease in income in 2023 from other services, which is down from IDR 12.78 billion and the increase in operational costs from IDR 6.89 billion in the 2022 period, increasing to IDR 8.04 billion in the 2023 period.
Management believes that the company's projects which already have a PPA with PT PLN (Persero) UID North Sumatra, with a capacity of 49.8 Megawatts, when operational, will provide an adequate profit contribution.
Therefore, management is making efforts for the company to immediately obtain additional funds to finance the 5 (five) PLTM projects that already have PPA.
The next consequence of the decline in Other Services income in the 2023 period as explained above, will also have an impact on the Company's share price which has shown a decline to reach the lowest price, namely Rp 50,- per share, and even in the first quarter of 2024 it has shown a decrease of up to IDR 15,- per share on April 22 2024 when this report is in the process of being finalized.
Closing
The company's next management plan is to seek to obtain funds to finance 5 (five) PLTM that already have a PPA with PT PLN UID North Sumatra, both equity financing and loan financing.
After these projects are built, management will finalize the Green Bond issuance process and corporate action plans on the Indonesian Stock Exchange, including the Rights Issue with Pre-emptive Rights (HPETD).
All efforts by management and the Board of Commissioners to bring the company out of liquidity and profitability problems, of course require the support of all parties, especially Shareholders, all levels of employees and other interested parties.
Management would like to thank the employees, Directors and Commissioners of subsidiary companies, the Board of Commissioners and Shareholders, the Directors of PT PLN (Persero) and the General Manager as well as all levels of PT PLN UID North Sumatra and Nanggroh Aceh Darussalam, and especially the Financial Services Authority, The Indonesian Stock Exchange has provided its support so far.
Jakarta, May 29 2024
