ANALYSIS OF FINANCIAL PERFORMANCE AND ECONOMIC VALUE ADDED IN COAL MINING COMPANIES IN INDONESIA (Case Study: PT Bukit Asam Tbk Compared to PT Adaro Energy Tbk from 2013 to 2017)

• Main Author: SAVITRIA (NIM 29316376), RIYAZSA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/30555
• Institution: Institut Teknologi Bandung

Since 2012, coal industry has to face the fluctuation of coal price which tend to decrease due to the poor condition in the global economic. This condition rebound since 2017 which makes coal mining industry is very attractive. Coal mining companies in Indonesia compete with each other to show a good performance. PT Bukit Asam Tbk (PTBA) is a state-owned company in coal mining sector which always give the best financial performance year to year and was established to support government program. It has the largest coal reserves which located in South Sumatera with low strip ratio. However, PT Adaro Energy Tbk (Adaro Energy) as a private company which has big capital, begin to show off through its vertical integration in supply chain which succeed to reduce its operation cost. This company which well-known as friendly coal is ready to beat PTBA. In order to the competition among them, calculate their financial performances is needed to determine the best coal company. Measurement formulated in Decree of Ministry of State Owned Company (BUMN) KEP MEN 100/MBU/2002 is used to measure the financial performances of these companies. There are eight financial indicators, which could be used to measure the company performances, the Return on Equity (ROE), Return on Investments (ROI), Cash Ratio, Current Ratio, Collection Period, Inventory Turnover, Total Assets Turnover, and Equity-to-Asset Ratio. There are 3 levels of financial health, they are healthy (AAA, AA, A), less healthy (BBB, BB, B), and not healthy (CCC, CC, C). However, analysis of financial ratio is not sufficient. Company and investor should consider about their risk from their investment. Therefore, analysis of Economic Value Added (EVA) is used to measure the value added produced by a company by reducing the cost of capital that arises as a result of the investments made. The result of these calculations is PTBA has good financial performances, which categorized as a healthy company with level AAA since 2013 until 2017. This company succeeds to maintain its good performance through long-term contract with domestic market and in 2015, lowering the strip ratio when the weakening of global economic happened. Improving its performance can be done by implemented vertical integration in value chain as Adaro Energy did. In the other sides, Adaro Energy also shows healthy condition although the level of healthy was less than PTBA, which got AA level from 2013 to 2017, except in 2015 the company only got level A. The performance of Adaro Energy was getting worse in 2015 due to lower demand in export market. The performance of both companies was also measured by EVA. PTBA generates EVA from 2013 to 2017 which the amount fluctuated year to year, while Adaro Energy cannot create any value creation due to its investment was too huge, and the revenue cannot give the added value since 2013. The company should concern to its investment and gain more profit by conduct long-term contract with domestic market.