UIC is a sole producer of Alkylbenzene in Indonesia, supported by its experience of more than thirty years in the industry and modern technology used in its operations. The Company competes with overseas producers in setting competitive selling price. The Company’s credibility to keep its products quality has been recognized through the certification of international quality ISO 9001:2015 that were obtained since 2003. Moreover, the Company also obtained certifications of ISO 14001:2015 since 2004 for its commitments in preserving its environments. In 2023, the Company also obtained ISO 45001:2018 international quality standard certification for Occupational Health and Safety Management System (SMK3) from the accreditation agency AMTIVO.

The just-in-time delivery system implemented by the Company has allowed the Company to supply the customers punctually. The ability to implement this delivery service enables our customers to reduce their storage cost and manage their stock.

Target of 2024 consolidated revenue was USD 374.02 million with a gross profit margin of 13.42%. Profit before tax is expected to be 8.01% of revenue value or USD 29.97 million and profit for the year attributable to equity holders of the parent of USD 23.40 million.

The realization achieved in 2024 showed that the revenue was recorded at USD 344.68 million, 7.85% lower than the 2024 target. Gross profit in 2024 was recorded at USD 44.58 million, a decrease of 11.20% from the targeted gross profit of USD 50.20 million. Thus, profit before income tax decreased by USD 3.93 million or 13.10% of the target, to USD 26.05 million and profit for the year attributable to equity holders of the parent for 2024 decreased 11.29% of the target 2024, from USD 23.40 million to USD 20.76 million. The achievement of realization in 2024 missed the target mainly from the downtrend in selling prices in line with the decline in world crude oil prices.

With the assumption an increase in sales volume of 8.58%, stable exchange rate and good economic growth, the Company has set a consolidated revenue target for 2025 of USD 371.82 million, 7.87% higher than realized revenue in 2024. Gross profit in 2025 is targeted at USD 46.91 million, 5.22% higher than gross profit in 2024. Profit before income tax is targeted at USD 27.95 million while profit for the year attributable to equity holders of the parent is targeted at USD 22.13 million.

For 2025 the Company has no plans to make changes to its capital structure. The Company plans internal financing to fund the capacity increase of the PACOL plant in 2025. For dividend policy, the Company plans a dividend for the 2024 book year which will be paid in 2025 ± 30% of the Company’s net profit.

RISK MANAGEMENT SYSTEM

Similar to other businesses, the Company and its Subsidiaries (Group) also have the potential to be exposed to business risks attributed to internal and external factors which may bring impact on the Company performance.

Control of the risks carried by identity and evaluate the main risks that faced by the Company, develop strategies and mitigation controls to manage the risks and assessing the continuing risk after risk control is done.

The Company also constantly remind its employees about risk awareness so that they can contribute to the risk management and provide essentials input in decision-making.

Type of Risk and How to Manage

As follows is the risk that identified can bring impact to the Company performance and how to managed the risk:

• Interest Rate Risk

The Company's interest rate risk mainly arises from loans for working capital purposes and long term bank loans. Loans at variable rates expose the Group to fair value interest rate risk. The Company's has interest risk arising from floating rates of their loan. The Group monitors the interest rate fluctuation to minimize any negative impacts to the Company.

• Foreign Currency Risk

The Company has foreign exchange risk primarily arising from recognized monetary assets and liabilities that are denominated in a currency other than the entity’s functional currency.

The Company is aware about market risks due to foreign exchange fluctuation. To mitigate the impact of fluctuations in foreign exchange rates on the Company’s assets and liabilities, if possible, the Company would manage a proper proportion of significant assets and liabilities denominated in foreign currencies based on the respective entity’s functional currency. If the assets are insufficient to cover its liabilities, the Company may enter into derivative transactions to mitigate such risks.

• Commodity Price Risk

The Company faces commodity price risk arising from the volatility of crude oil price, level of demand and supply in the market and the global economic environment. The volatility of crude oil price have indirect affects the Group's raw materials price.

The Company's policy to minimize the risks arising from the fluctuations of raw material price is to foster more efficient raw material procurement and production to suit customers demands.  

The Company has credit risk arising from the credits granted to the customers and placement of current accounts and deposits in the banks. 

The Company has credit risk arising from the credits granted to the customers and placement of current accounts and deposits in the banks. Credit risk arising from placements of current accounts and deposits is managed in accordance with the Company’s policy. Investments of surplus funds are limited for each bank and reviewed annually by the directors. The Company has concentration of credit risk from the placement of cash and cash equivalents, of which 40.80% is placed at one bank.

The Company has policies in place to ensure that revenue of products are made only to creditworthy customers with proven track records or good credit history. The Company applies prudent credit acceptance policies and performs ongoing credit portfolio monitoring. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. The Company has policies that limit the amount of credit exposure to any particular customer. Utilization of credit limits by customers is regularly monitored by the management. Customers who do not qualify for credit facilities are required to pay in advance or use Letters of Credit. In addition, the receivable balances are monitored on an ongoing basis to reduce the Group’s exposure to bad debts.

• Liquidity Risk

The Company manages its liquidity profile in order to finance its capital expenditures and settle its maturing debts as they become due by maintaining sufficient cash and cash equivalents, and the availability of funding through an adequate amount of available credit facilities. The Company regularly evaluates its projected and actual cash flow information and continuously monitor the maturity of its financial assets and liabilities.

Review of Effectiveness of Risk Management

The authority for implementation and management of the risk management framework is given to the Directors and the Internal Audit as a division that assists the Director duties to managing the Company’s risk management. The implementation of the Company’s risk management is also supervised by the Company’s Audit Committee, which is an extension of the Company’s BoC.

The risk management system applied by the Company is able to minimize or suppress the possibility of the risk occurs. Implementation of a comprehensive risk management system, enable the Company effectively manage the risk so that can take into account the risk portfolio and perform preventive measures.

-bt25-