IDX-listed investment firm PT Saratoga Sedaya Investama Tbk (Saratoga) plunged into the red in the first half of 2023 due to losses suffered from the declining share price of some of its listed portfolio companies.
According to the company’s stock exchange disclosure, its losses in the six-month period ended June 30 stood at 12.21 trillion rupiah ($808 million), compared with a profit of 3.3 trillion rupiah in the same period of 2022.
Loss on investment—15 trillion rupiah—was the main contributor to the overall losses in H1 2023. In contrast, in the year-ago period, the investment firm had booked an investment gain of 2.7 trillion rupiah.
Saratoga’s finance director Lanny Wong said that in the first half of 2023, the share price of Saratoga’s portfolio companies—energy firm PT Adaro Energy Indonesia Tbk, and mining firm PT Merdeka Copper Gold Tbk—declined resulting in losses.
“Saratoga’s investment value in listed companies is mostly influenced by many factors like inflation rate, interest rates, and commodity prices. Saratoga will prepare a comprehensive and measurable strategy to face upcoming challenges,” added Wong.
Saratoga’s net asset value (NAV) also declined to 47.5 trillion rupiah as on June 30 this year, from 61.51 trillion at the end of 2022. Saratoga’s net asset value comprises investments in blue-chip companies, growth companies, and tech companies. In the first half of 2023, Saratoga reduced its investments in blue chip and tech companies and increased its exposure to growth companies.
Nevertheless, Saratoga enjoyed a 9% increase in dividend income to 1.5 trillion rupiah in H1. The dividend income added to the cash flow of the company, said Devin Wirawan, Saratoga’s investment director. “The company implements its investment strategy cautiously and consistently looking for new investment opportunities,” explained Wirawan.
Saratoga plans to reduce its exposure to natural resources even as it plans to add healthcare and renewable energy investments to its portfolio, Wirawan had said recently. Saratoga is planning to invest in the region of $100-150 million predominantly in renewable energy and healthcare this year, he had said.
Besides Adaro Energy and Merdeka Copper Gold, Saratoga’s other investments include auto company PT Mitra Pinasthika Mustika Tbk, gas firm PT Samator Indo Gas Tbk, logistics firm MGM Bosco Logistics, herbal medicine player Deltomed, media firm City Vision, renewable energy firms Xurya and Forest Carbon, and insurtech startup Fuse and digital lender Julo.
In March, Saratoga sold 425.4 million shares in Primaya Hospital to GIC’s subsidiary Archipelago Investment. Wirawan had said in May 2023 that the investment gain from Primaya Hospital’s sale will be used to invest in other hospitals and that the fresh targets are currently being evaluated.
The investment firm has posted disappointing earnings in recent quarters. For the first quarter of 2023, Saratoga had posted a loss of 4.4 trillion rupiah. In Q4 2022, it recorded a profit of 4.6 trillion rupiah, but that was 81% down from the year-ago quarter.