Rodamas to go public to increase working capital. (Capital Market).
By offering around 13.37% of its shares to the public through the IPO, the composition of shareholders of the company will change. Tan Pei Ling, a commissioner of the company and who owns 91.88% of the company will have his share reduced to 73.56% after the IPO. Other shareholders including Iskandar Tanuwidjaja and Ishak Sumarno will also have smaller shares.
The company has an authorized capital of Rp 200 billion with issued capital of Rp 62.8 billion fully paid, leaving Rp 137.2 billion worth of shares in portfolio. After the IPO, the issued and paid up capital will rise to Rp 78.5 billion with shares in portfolio remaining Rp 121.5 billion.
Partly to increase working capital
Many other companies now have launched IPO to raise fund to repay debt, but Rodamas hopes to raise fund through IPO to strengthen its working capital. The company said in a promotional leaflet, it wants to buy more vehicles to support its distribution operation, build new warehouses, increase investment in associated companies, and strengthen its working capital.
The company said in the leaflet, by the end of 2002, it had a total liability of Rp 506 billion and most or Rp 295.86 billion are in short term liabilities. Operating debt contributed the bulk or Rp 207.4 billion to the short term debt. Long term liabilities totaled Rp 210.2 billion mostly in long term loan amounting to Rp 123.2 billion.
Operating income at Rp 295.6 billion
In the beginning Rodamas operated mainly in the distribution of imported products in Indonesia. Later the company, which was established by Tan Siong Kie expanded operations with investment in 24 other companies operating in various business areas including manufacturing of building materials, food processing industry, household equipment and personal goods industry, and chemical industry. Rodamas also distributes goods produced by its affiliates or subsidiaries or other companies in the country.
In 2000-2002, the income of the Rodamas group rose from Rp 80.6 billion in 2000 to Rp 295.6 billion in 2002. Sheet glass products contributed the largest portion or Rp 82 billion to its income in 2002, followed by MSG Rp 72.7 billion and galvanized iron sheets Rp 56.4 billion.
Diversification of products through 24 subsidiaries and associated companies
The types of building materials produced by the Rodamas Group include sheet glass, galvanized iron sheets, louver windows and rolling doors. Sheet glass is produced by Asahimas Flat Glass which has six factories including 4 in Jakarta, one in Surabaya and one in Cikampek. Galvanized iron sheets are produced by PT Tumbakmas Inti Mulia. Louvre windows and rolling doors are produced by PT Dicky Metals and PT Sanwamas Metal Industry.
Food products are produced by PT Sasa Fermentasi, PT Sasa Inti and PT Ajinomoto. Spices and food seasoning, broth, and batter are produced by PT Mitratama Rasa Sejati. Mitratama Kencana Sejati produces sauce including chili sauce, tomato sauce and other types of sauce.
Consumer goods are produced by PT Kao Indonesia including face treatment cosmetics, hair care cosmetics, household goods and cleanser tissue. Salonpas Indonesia produces plaster, liniment and analgesic cosmetic.
In chemical industry, Rodamas has a 18% stake in PT Asahimas Chemicals that produces PVC resin with an annual production capacity of 370,000 tons. PVC compound is produced by PT Riken Asahi Plastics Indonesia which produces that material to be used in the production of cable for automotive industry.
Financial performance healthy
The strong growth in operating income in 2002 had good effect on the financial performance of the company. With operating income of Rp 1.94 trillion in 2002, the company chalked up a net profit of Rp 335.5 billion or a profit margin of more than 20%.
An increase in the net profit and equity in 2002, has improved its rentability ratio. Its current ratios also increased indicating that the company is quite liquid. With a current ratio of 191.8% in 2002, its current assets, therefore, is almost twice larger than its short term liabilities.
Table--1 Share capital of Rodamas before and after IPO Description After IPO Number of Nominal Portion shares (000) value (%) (Rpmillion) Authorized capital 2,000,000 200,000 Issued capital fully paid: Tan Pei Ling 577,588.0 57,758.8 91.88 Iskandar Tanuwidjaja 33,658.2 3,365.8 5.35 Ishak Sumamo 17,360 1,736 2.77 Owner of convertible -- -- money order Investing public -- Total issued capital fully 628,606.2 62,860.6 100.0 paid Shares in portfolio 1,371,393.7 137,139.3 Description Before IPO Number of Nominal Portion shares (000) value (%) (Rpmillion) Authorized capital 2,000,000 200,000 Issued capital fully paid: Tan Pei Ling 577,588.0 57,758.8 73.56 Iskandar Tanuwidjaja 33,658.2 3,365.8 4.29 Ishak Sumamo 17,360 1,736 2.21 Owner of convertible 51,577.6 5,157.7 6.57 money order Investing public 105,000 10,500 13.37 Total issued capital fully 785,183.8 78,518.3 100.0 paid Shares in portfolio 1,214,816.1 121,481.6 Source: Rodamas/Data Consult Table--2 Breakdown of Rodamas' liabilities, By Dec. 31, 2002 Description Total (Rp million) Short term liabilities: Bank loan 12,605 Money order payable to party having special 17,184 connections Operating debt 207,495 Other debts 1,996 Tax debt 12,294 Costs payable 24,469 Part of long term loan maturing in a year. 16,308 Other short term liabilities 3,488 Sub-Total of short term liabilities 295,839 Long term liabilities: Deferred tax 20,223 Long term loan 123,278 Convertible money orders 66,733 Sub-Total of long term liabilities 210,234 Total liabilities 506,073 Source: Rodamas Table--3 Operating income of Rodamas, 2000-2002 (Rp million) Type of products 2000 2001 2002 Building materials: Glass (9,316) 50,126 82,035 Galvanized iron sheets (38,131) (3,324) 56,414 Louver windows 980 2,102 1,347 Chemicals: PVC, caustic soda & 29,905 (2,151) 8,708 other chlorine products Food: MSG 17,909 45,733 62,782 Other food stuffs 9,120 5,960 5,205 Consumer goods: Household and personal goods 24,643 22,530 35,960 Analgesic plaster, analgesic 2,025 2,378 4,147 liniment, analgesic cream Other businesses 43,508 40,491 39,059 Total bperating income 80,643 163,845 295,657 Source: Rodamas Table--4 Subsidiaries of Rodamas by sectors of business, 2003 Name of company Shares Line of business owned (%) Tumbakmas Inti Mulia, PT 100 Galvanized iron sheets Dicky Metals, PT 100 Louver windows Mitratama Kencana Sejati, PT 100 Sauce Mitratama Rasa Sejati, PT 100 Spices Esti Pura Kencana, PT 100 Investment holding Tumbakmas Niaga Sejati, PT 100 Investment holding Rodamas International Holdings 100 Investment holding Rodamas Marketing (s) Pte. Ltd 100 Marketing abroad Sasa Inti, PT 50 MSG and other seasoning products Sasa Fermentasi, PT 50 MSG Ajinomoto Indonesia, PT 50 MSG and other seasoning products Kao Indonesia, PT 49.97 Household and personal goods Dai Nippon Printing Indonesia, PT 49 Flexible packaging & printing Asahimas Flat Glass, PT 39.69 Sheet glass Sanwamas Metal Industry, PT 36.74 Rolling door Nabisco Foods, PT 30 Biscuit, other snacks Salonpas Indonesia, PT 25 Plaster and analgesic cosmetic Saint Gobain Winter Diamas, PT 25 Diamond grindstone & cbn Eratex Djaja, PT 19.6 Textiles Asahimas Chemical, PT 18 Caustic soda, PVC & chlorine Riken Asahi Plastic Indonesia, PT 10 PVC compound Kao Indonesia Chemical, PT 5 Chemicals (SO3) Video Display Glass Indonesia, PT 5 TV Bulbs Source: Rodamas/Data Consult Table--5 Consolidated financial balance sheet Rodamas, 2000-2002 (Rp billion) Description 2000 2001 2002 Total assets 1,340.5 1,556.9 1,859.2 Current assets 404.4 441.1 567.7 Fixed assets 936.1 1,115.8 1,291.5 Total liabilities 499.4 497.5 506.0 Short term liabilities 250.1 253.2 295.8 Long term liabilities 249.3 244.3 210.2 Minority rights 0.1 0.1 0.009 Equity 840.9 1,059.3 1,353.1 Operating income 1,316.8 1,651.8 1,944.2 Net profit 101.8 196.4 335.5 Ratios (%) Current assets/ 161.6 174.2 191.8 short term liabilities Net profit/operating income 7.7 11.9 17.2 Net profit/total assets 7.6 12.6 18.0 Net profit/equity 12.1 18.5 24.8 Total liabilities/total assets 37.2 31.9 27.2 Total liabilities/equity 59.0 47.0 37.0 Source: Rodamas/Data Consult