Dear Valued Shareholders,
We are grateful to God Almighty that we are finally can pass through 2017. In the midst of the very tight business competition the Company can survive although the business result is below what is targeted.
World Bank recorded that on 2017 world economy was in recovery state with growth 2.7% compared to 2016. Even though World Bank recorded Indonesia’s average growth was 5.05%, relatively stable compared to 2016, we saw that national shipping industry was not really recovered since crisis global economy in 2008. Therefore the company keeps increasing its performance by consistently implementing strategy that has been set by the Management.
During 2017, Board of Directors has stipulated to continue some strategies that have been implemented in last year. One of them is Safe Delivery and On-Time Schedule in providing service to its customers, because we see that in transportation service industry on-time and safe delivery can give satisfaction to the customers. Besides that, on 2017 the Company kept expanding national network by opening service to new ports. Goal of this strategy is to increase connectivity inter-region, especially in remote areas, as manifestation of Company’s commitment to support Sea Toll Program initiated by the Government.
In early 2017, the Management has set target that has to be achieved by the Company. One of the strategies is expanding national network that has been run since 2016. During 2017 the Company has add services to 10 (ten) new ports, which are Tarjun, Padang, Bengkulu, Fakfak, Berau, Tarakan, Dobo, Kaimana, Nabire, dan Baubau. Therefore, until end of 2017 the Company has served 38 ports across Indonesia. On June 2017, the Company participated in Sea Toll Program initiated by the Government, and the route taken by the Company in the Program was Surabaya – Baubau – Manokwari – Baubau – Surabaya.
The Company also added its fleet and capacity on 2017. On first quarter 2017, number of fleet was increased to become 34 units which followed by increase of total loading capacity for 14% to become 384,540 DWT, 25,785 TEUS compared to 2016. Number of container also increased 18% compared to 2016, from 30,631 units to become 36,270 units.
Sales target that was set by Board of Directors on early 2017 is achieved by the end of the year. From financial side, compared to 2016 Company’s revenue increase 16.68% by the end of 2017, which is Rp. 1.672 billion become Rp. 2.001 billion. While the Total Comprehensive Income (Losses) Attributable to Owner of the Parent Entity is decreased 77.06% from Rp. 231.3 billion in 2016 to become Rp. 53.05 billion in 2017. Decrease of Company’s income is due to rise of fuel price and decrease of freight rate about 13% due to tight business competition. The Company’s total assets is Rp. 2,525.6 billion in 2016, to become Rp. 2,918.4 billion or increased 15.55% in 2017.
Challenge and Obstacle
It is undeniable that the Company was facing some challenges to achieve its target. The tight competition become dominant factor that cause the Company unable to achieve profit targeted that has been set on early year. This was caused by fluctuated freight rate due to tight business competition. Besides that some pioneered ports served by the company have no adequate facilities and infrastructures to support effective and efficient operational activities.
Implementation of Cabotage Principle since 2005 makes national shipping industry keeps increase significantly until today. Indonesia geographic condition, which is maritime country, added by Government Program to make Indonesia become world maritime axis, provide wide opportunity to improve national shipping industry.
Indonesia National Shipowners’ Association (INSA) recorded there is significant growth on national fleet with average 30.50% from 2012 until 2016. On the other side, United Nation Conference on Trade and Development (UNCTD) recorded there is significant growth of number of container vessel, which is 246,000 DWT in 2005 to become 1,784,000 DWT on 2017, with growth 725.2% during 11 years with average growth 65.95% per year.
With regards to above-mentioned data, it shows that prospect for national shipping industry; especially container carrier is still promising. Moreover there are still many pioneer ports that have not been served by container carrier to distribute logistics goods.
Implementation of GCG
Board of Directors evaluates that implementation of GCG has run in accordance with direction of Board of Commissioners. GCG Principles has been implemented by GCG organs according to their function. Annual General Meeting of Shareholders was well executed and resulting some resolution and attended by Shareholders and all Board of Commissioners and Board of Directors. Board of Commissioners, assisted by Audit Committee has carried out supervisory function properly. And Corporate Secretary also has carried out its function and duty to facilitate communication between the Company and Stakeholder, also monitoring capital market in order to give inputs to Directors related to compliance to prevailing rules and regulations.
The Company believe that implementation of GCG consistently will strengthen Company’s position to face business competition, increase effectiveness and efficiency to manage resources, maximize long term value, and also increase trust of stakeholders and shareholders. Therefore, GCG has to be implemented so that it becomes a supporting for Company’s business process.
Changes in Composition of Board of Directors
In 2017 the Company has carried out changes in composition of Company’s Board of Directors as resolved in 2017 Annual General Meeting of Shareholders. Changes in the composition were due to expiration of service period and there is Company’s internal need so that distribution of function and duty of each directorate can be more specific.
As closing, Board of Directors would like to express our utmost gratitude to all stakeholder, Directorate of Sea Transportation, Pelindo, INSA, Classification Society, Customers and Suppliers for their support and good cooperation so far. Our high esteem is also provided to all Employees, Crews and the Big Family of Temasian for the contribution and hard work through this time. May God the Almighty always bless each of our efforts and works.