Indonesia-listed investment firm PT Saratoga Investama Sedaya Tbk slipped into the red in the first nine months of this year, driven by a significant loss on investments, filings showed.
In 9M 2023, Saratoga posted a net loss of 10.6 trillion rupiah ($668 million), compared with a net profit of 7.15 trillion rupiah in 9M 2022, as it notched up a loss on investment of 12.87 trillion rupiah in the nine months of 2023, compared with a gain of 7.58 trillion rupiah in the same period last year.
The company, however, saw an increase in dividend income to 1.7 trillion rupiah in 9M 2023 from 1.4 trillion rupiah in 9M 2022.
Michael William P Soeryadjaya, president director of Saratoga, said the dynamic global economy had impacted multiple business sectors across the globe, including Indonesia. Energy and commodity prices also continue to fluctuate with global inflation and interest rates remaining high.
Responding to this, Saratoga has implemented its investment strategy in a more prudent and disciplined manner, prioritising strong cash flow management. “We remain focused on increasing the value of Saratoga’s existing portfolio companies. We are certain that the new business lines being developed within our portfolio companies will continue to strengthen Saratoga’s investment fundamentals,” Soeryadjaya said in a statement on Monday.
In 9M 2023, Saratoga’s net asset value touched 49.8 trillion rupiah, compared with 61.51 trillion rupiah at the end of last year. Saratoga’s investment in blue chips stood at 41.41 trillion rupiah in 9M 2023, compared with 51.23 trillion at the end of 2022. While investment in growth companies stood at 5.61 trillion rupiah, investment in digital technology was 458.77 billion rupiah.
Among its strategic investments, Saratoga supports the business fortification of PT Merdeka Battery Materials Tbk (MBMA), a unit of PT Merdeka Copper Gold Tbk that focuses on the electric vehicle battery supply chain. Merdeka Battery Minerals also signed an agreement with GEM Co Ltd to build a high-pressure acid leach processing plant with a production capacity of 30,000 tonnes of nickel in mixed hydroxide precipitate annually.
In addition, Saratoga will continue to optimise every investment opportunity across strategic sectors that has a major impact on the sustainability of the national economy. DealStreetAsia reported earlier that Saratoga is planning to double down on the renewable energy, healthcare, technology, and consumer sectors as its current portfolio is heavily skewed towards natural resources, with around 60% comprised of energy and mining firms including PT Adaro Energy Tbk, Interra Resources Limited, and PT Merdeka Copper Gold Tbk, among others.
Saratoga can optimise its operational efficiency as reflected in the low cost and debt ratio. In 9M 2023, the annualised operating cost to net asset value (NAV) ratio stood at 0.5%, while the loan ratio was 0.3%.
“During this period, we have also successfully reduced our interest costs by 52% y-o-y due to a decrease in net debt. Currently, Saratoga’s net debt is 166 billion rupiah, down 72% y-o-y from 588 billion rupiah,” Devin Wirawan, Investment Director of Saratoga, explained.