Advances in Economics, Business and Management Research, volume 100

International Conference of Organizational Innovation (ICOI 2019)

HOLDING RESTRUCTURING ANALYSIS

TOWARDS THE SOLVABILITY AND
PROFITABILITY OF PT INALUM
(PERSERO)
Tengku Amrizal Azwin (Magister Manajemen, Universitas Sumatera Utara)
Isfenti Sadalia (Magister Manajemen, Universitas Sumatera Utara)
Nisrul Irawati (Magister Manajemen, Universitas Sumatera Utara)

Email : tengku.amrizal90@gmail.com

Abstract—This study aims to examine the effect of

corporate restructuring of the parent of the Mining II. LITERATURE REVIEW
Industry Holding towards the solvability and A holding company could be a company that has
profitability of PT Indonesia Asahan Alumunium the most well-liked stocks or major stocks of other
(Persero). The method used in this study is corporations in a sense that there is a minimum of one
descriptive analysis, which aims to explain the representative member on the board of administrators
results of the calculation of financial ratios of these corporations, and it's vote, and thereby it may
consisting of profitability ratios and solvency ratios manage the businesses, and gain advantages returning
that occurred in companies between 2013 and 2017. from the style of those businesses (Babaei, 2004). One
Data collection is done by analyzing the company's of the management methods to maximize profits for
financial performance. trade establishments is combining business units.
Capable organizations have functioned as holdings to
Keywords—Holding, Solvability, Profitability,
enter international competition, to cope with instability
Inalum
in market environments, to grow, to realize market
I. INTRODUCTION share, to be concerned with new and profitable
activities, to make profit, and to scale back prices so
Since 2017, INALUM have initiated synergies with
that they may be concerned with international
State owned Enterprises (SOE), specifically among the
competition in addition to addressing issues
Holding of Mining Industries, like establishing a
(Dastmalchi et al. 2011).
Smelter Grade Alumina Refinery (SGAR). The
The challenge facing holding managers is that their
corporate views are of a collaboration with business
decision-making affects not only corporations but also
partners within the course of conducting its business as
the holding itself, thus it is necessary to review and
a crucial strategy amidst progressively intense business
acknowledge the workers of the organization, it ought
competition. Strategic alliances or synergies aren't
to have a broader outlook and a full understanding of
alone aimed toward driving efficient production, but
the future for decision-making subsidiary corporations
also to provide opportunities to boost penetration.
so that it may create selections and apply its own
However, we also realize that the company’s important
views. Therefore, holdings ought to manage many
task as an SOE isn’t just to garner profits, but is also
corporations (Gharabi, 2010). One of the methods at a
for the sake of national interest. Therefore, promoting
corporation scale is that the strategy of takeover and
performance potency by synergizing operations in
merger that is adopted to make valley and increase
addition to production activities is primarily supposed
wealth for shareholders. The foremost necessary
as a trial to become an important half in developing the
motive that encourages senior managers of the
state. For that purpose, we'll still pursue our business
businesses to try such transactions is to urge activity to
strategy through synergies within the years ahead, thus
extend wealth for shareholders, economies of scale and
ensuring that our contribution, which of SOEs’
scope, to extend market share, to boost effectiveness,
normally, towards Indonesia’s future development can
to extend analysis and development capability,
still grow. The purpose of this research is to examine
company growth, and risk reduction (Jasbi, 1985).
how much influence company restructuring has on the
Holding corporations have some variations with
holding of state-owned holding companies' solvency &
merger corporations in organizational structure.
profitability and to find out whether the restructuring
Merger corporations usually use divisional structure
policy has positive or negative effects on the company.
whereas holding corporations uses a decentralized
structure (Mohgammadi, 2011). One the foremost
necessary problems mentioned within the emergence

Copyright © 2019, the Authors. Published by Atlantis Press.

This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). 274
 Advances in Economics, Business and Management Research, volume 100

of holdings is consolidated money statements of profitability ratios each year and compared the
constituent corporations of a company and money solvency and profitability ratios in the same year
reportage of large economic units. Consolidated between the consolidated financial statements and the
money statements typically consist of monetary non-consolidated financial statements. The researcher
information related to the first unit and every one of also reviewed the previous studies related to this study.
the subsidiary units. It represents shareholders that
invest in subsidiary corporations for which there is a
profit to them (Saleh Ardestani, 1994). IV. RESULT AND DISCUSSION
Through Holding of Mining structure, the
III. METHODS government expects that SOEs in the mining industry
The method used in this study is descriptive are able to expand to other countries. The holding
analysis, namely, to explain the results of the company is expected to be a world class company
calculation of financial ratios consisting of profitability which is able to compete with global mining
ratios and solvency ratios that occurred in companies companies.
between 2013 and 2017. Data collection is done by The presence of the holding has the potency to
analyzing the company's financial performance. The provide opportunities for the community to participate
population in this study is the financial statements of in developing related supporting industries and their
PT. Indonesia Asahan Alumunium (Persero) in 2013 ~ development. In addition, the opening of new job
2017. opportunities will absorb the manpower in significant
The researcher did not enter the company's 2018 amounts. This synergy of mutual benefit drives the
financial statement data because it was not final. The creation of products at competitive prices.
research method compared the solvency and

TABLE 1. INFORMATION OF CONSOLIDATED FINANCIAL STATEMENT

Description 2017 2016 2015 2014 2013
in million Rupiah in thousand USD
Consolidated Inalum - Operating
Statement of Financial
Position
Current Assets 37,463,082 33,415,272 719,287 717,638 663,562
Non-Current Assets 55,781,647 39,686,430 414,631 372,794 384,047
Total Assets 93,244,729 73,101,702 1,133,919 1,090,432 1,047,609
Current Liabilities 15,125,792 13,600,770 56,547 89,391 41,840
Non-Current Liabilities 12,111,663 11,109,820 18,329 18,305 17,540
Total Liabilities 27,237,455 24,710,590 74,877 107,696 59,380
Total Equities 66,007,274 48,391,112 1,059,342 982,737 988,229
Total Liabilities and Equity 93,244,729 73,101,702 1,133,919 1,090,432 1,047,609

Statement of Profit or Loss

and Other Comprehensive
Income
Net Sales 47,184,283 35,904,458 490,626 632,450 521,111
Cost of Goods Sold (COGS) -33,276,439 -27,693,307 -356,740 -393,535 -418,247
Gross Profit 13,907,844 8,211,151 133,886 238,916 102,864
Operating Expenses -4,661,577 -3,828,903 -39,675 -43,173 -30,379
Operating Profit 9,246,267 4,382,248 94,211 195,742 72,485
Other Net Income (Expenses) 676,274 165,667 9,541 10,242 13,101
Profit before Income Tax
9,286,039 4,469,176 103,752 205,984 85,586
Expense
Income Tax Expense -2,474,385 11,175 -24,704 -49,255 -21,544
Profit 6,805,157 4,439,271 79,048 156,729 64,042
Other Comprehensive Income
-538,502 -333,931 -153 42 -
(Loss)
Total Comprehensive income 6,266,655 4,105,340 78,895 156,772 64,042
EBITDA 12,137,653 6,891,113 113,109 222,831 99,458

Profitability Ratio (%) % % % % %

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Return On Asset (ROA) 7.29 6.07 6.97 14.37 6.11

Return On Equity (ROE) 10.31 9.17 7.46 15.95 6.48
Gross Profit Ratio 29.48 22.87 27.29 37.78 19.74
Net Profit Ratio 14.42 12.36 16.11 24.78 12.29
EBITDA Margin 25.72 19.19 23.05 35.23 19.09

Liquidity Ratio (%) % % % % %

Current Ratio 247.68 245.69 1,272.01 802.81 1,585.95

Solvability Ratio (%) % % % % %

Debt to Equity Ratio (DER) 41.26 51.06 7.07 10.96 6.01
Debt to Asset Ratio (DAR) 29.21 33.80 6.60 9.88 5.67
Liabilities/EBITDA 224.40 358.59 66.20 48.33 59.70

TABLE 2. COMPARISON OF CONSOLIDATED FINANCIAL STATEMENT AND INALUM FINANCIAL STATEMENT

Description 2017 2016 2017 2016
in million Rupiah in million Rupiah
Inalum - Operating Consolidated
Statement of Financial Position
Current Assets 761,086 684,520 37,463,082 33,415,272
Non-Current Assets 4,983,986 938,971 55,781,647 39,686,430
Total Assets 5,745,986 1,623,492 93,244,729 73,101,702
Current Liabilities 122,239 85,180 15,125,792 13,600,770
Non-Current Liabilities 14,233 5,512 12,111,663 11,109,820
Total Liabilities 136,471 90,692 27,237,455 24,710,590
Total Equities 5,608,601 1,532,800 66,007,274 48,391,112
Total Liabilities and Equity 5,745,072 1,623,492 93,244,729 73,101,702
Statement of Profit or Loss and
Other Comprehensive Income
Net Sales 436,545 433,682 47,184,283 35,904,458
Cost of Goods Sold (COGS) -283,071 -303,658 -33,276,439 -27,693,307
Gross Profit 153,474 130,024 13,907,844 8,211,151
Operating Expenses -46,609 -46,019 -4,661,577 -3,828,903
Operating Profit 106,865 84,005 9,246,267 4,382,248
Other Net Income (Expenses) 20,875 -113 676,274 165,667
Profit before Income Tax Expense 139,731 89,975 9,286,039 4,469,176
Income Tax Expense -29,594 -23,534 -2,474,385 11,175
Profit 110,137 66,441 6,805,157 4,439,271
Other Comprehensive Income (Loss) -410 -431 -538,502 -333,931
Total Comprehensive income 109,727 497,472 6,266,655 4,105,340
EBITDA 140,507 111,345 12,137,653 6,891,113

Profitability Ratio (%) % % % %

Return On Asset (ROA) 1.92 4.09 7.29 6.07
Return On Equity (ROE) 1.96 4.33 10.31 9.17
Gross Profit Ratio 35.16 29.98 29.48 22.87
Net Profit Ratio 25.23 15.32 14.42 12.36
EBITDA Margin 32.19 25.67 25.72 19.19

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Liquidity Ratio (%) % % % %

Current Ratio 622.62 803.62 247.68 245.69

Solvability Ratio (%) % % % %

Debt to Equity Ratio (DER) 2.42 5.92 41.26 51.06
Debt to Asset Ratio (DAR) 2.38 5.59 29.21 33.8
Liabilities/EBITDA 97.13 81.45 224.4 358.59

The comparison between target and realization in Rp 35.90 trillion in 2016 to Rp 47.18 trillion in 2017.
this report are not stated in consolidation, as group The largest contributor to revenues was the sale of coal
consolidation was established at the end of November that amounted to Rp 18.25 trillion, or 38.7% of total
2017, whereas targets for the corporate work set up revenues. Meanwhile, total consolidated assets
and budget were established at the start of 2017. increased by 27.6% from Rp 73.10 trillion as of
However, the company presented the consolidated December 31, 2016 to Rp 93.24 trillion per December
performance separately in this report. Company assets 2017, the largest contributor to the increase came from
in the work plan and corporate budget are as much as PT INALUM (Persero) fixed assets. Of the total
of USD.7 billion, in the financial year reached USD consolidated assets, current assets amounted to Rp
5.7 billion or 335.8% beyond the stipulated target. 37.46 trillion, increased by 12.1% compared to 2016 at
Even when compared with the previous year, which Rp 33.42 trillion. The largest contributor to the
amounted to USD 1.6 billion, there has been a growth increase came from the trade receivables of subsidiary,
of 256.25%. The increase in these assets was mainly PT Bukit Asam Tbk. Meanwhile, consolidated cash
driven by an increase in equity, which was 336.28% flows from operating activities recorded an increase of
beyond target. 36.6%, from Rp 4.34 trillion as of December 31, 2016,
The increase in the company’s equity comes from to Rp 5.94 trillion as of December 31, 2017. Among
additional state investment from the four mining contributors to cash flows is receivables from
companies, namely PT Timah Tbk, PT Aneka customers, which grew by 26.0% from Rp 34.58
Tambang Tbk, PT Bukit Asam Tbk and PT Freeport trillion in 2016 to Rp 43.57 trillion in 2017. The
Indonesia. The government has transferred all of its largest revenue came from PT Bukit Asam Tbk
shareholdings in the four companies as additional state amounting to Rp 16.41 trillion.
equity participation for the company. In terms of sales,
the company also showed excellent performance in V. CONCLUSION
2017 at 99.9% of the target. In the Company Work The restructuring of a company into a holding has a
Plan and Budget, the company set the target of net very large impact on increasing the company's ability
sales at USD 436,8 million. The actual sales achieved to increase effectiveness and efficiency to earn profits.
amounted to USD 436,5 million. The above-target The restructuring of a company into a holding also has
realization and improvement from 2016 was mainly a huge impact on increasing the company's ability to
due to the increase of the aluminium reference price in pay off its obligations. Becoming a holding has a very
the global market. The price in 2016 was well below significant positive impact and can be an alternative
USD 2,000 per ton, and started in 2017 the price strategy to improve company performance.
reached USD 2,069 per ton. As a result of the increase A good profitability ratio will make the company
in sales, the company’s net profit reached USD 110,14 able to measure management effectiveness as a whole
million, or 160.3% beyond the target. In comparison which is aimed at the size of the profit obtained in
with the previous year, the increase in net profit is relation to sales and investment. The better the
65,8%. In addition to the rise in aluminium reference profitability ratio, the better the ability to describe the
prices, the growth in profits is also driven by efficiency company's high profitability. A good solvency ratio
measures that were successfully implemented by the will enable the company to be able to assess the
company. The company recorded a lower Cost of company's ability to pay off all of its obligations both
Goods Sold in 2017 compared to the previous year. short and long term by guaranteeing assets or assets
As for the consolidated financial performance, owned by the company until the company is closed or
gross profit was Rp 13.91 trillion, a growth of 69.4% liquidated.
over the previous year. The largest contributor to gross
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