Samudera Indonesia Visit Takeaways

We recently visited Samudera Indonesia (SMDR IJ, Not Rated) here are the key takeaways:
The company is an integrated logistic & cargo company that serves international & domestic market, Samudera has 18 subsidiaries that is divided into 3 categories; Shipping, Logistics, and Agency & Terminal, the largest contributor of revenue for the company comes from Shipping division or 60% – 70% where mostly from Samudera Shipping Line (SSL). Agency & Terminal contributes ~20% and Logistics contributes ~10% to revenue. Margin wise Shipping offers the highest with gross margin ~40%, logistics ~15%, and oil & gas related projects ~20%-30%.

Samudera currently has 52 container vessels; 27 international container vessels and 25 non-container vessels (for oil&gas, coal). The average age of the vessels are 10 years. For Indonesia – Singapore route, SMDR is considered the top 3 in regional container the market. Meanwhile SMDR owns 7 domestics vessels with 13 operating. Domestically, SMDR is considered top 5 in the cargo container market.

With AFTA 2015 approaching soon, SMDR will be focusing on better development of its logistic ports in order to capture the potential market. This will also be in-line with the Government’s plan to build 24 new ports across Indonesia, SMDR’s port will be included in one of them. Government body such as PT SMI has also offered incentives such as financing with relaxed interest for the infrastructure project development.

Management also expects the AFTA will open more opportunities and more international parties to form a JV and operate in Indonesia. Thus there will be more shipping routes in Indonesia waters. SMDR itself will be buying 4 additional fleets in this year or the next.

Aside from developing its ports, SMDR will also develop its Container depots to make into a more integrated one-stop shop. Meanwhile for inland transportation, the company is targeting 1,000 head trucks from the current 400. To fund these development capex, there is a potential IPO for some of its subsidiaries as well as to add liquidity to the market.
Management targets FY15 revenue & net income to grow ~20%.