Reference no: EM132780358

Samudera Indonesia Accelerates Loss Recovery and Digitalization

PT Samudera Indonesia Tbk (SMDR) in the second semester of 2020 seeks to carry out business transformation to recover losses in 2019. This year, the Company focuses on investing in internal funds to buy or rejuvenate vessels targeting income from certain consumers (captive market), improving service quality and human resources during the Covid-19 pandemic and to boost digitalization to meet business growth plans while adapting to business developments that rely on information technology.

This was conveyed by Bani Mulia, President Director, Ridwan Hamid, Director of Finance, Tara Hidayat, Director of HR, and Farida Hidayat, Compliance Director of Samudera Indonesia SMDR in a virtual public expose regarding the SMDR General Meeting of Shareholders (GMS) in Jakarta, Tuesday (30/6 / 2020).

Bani said the company is optimistic that its business performance in 2020 will increase following the achievement of an increase in net profit in May this year of US $ 4.9 million, or an increase of two times compared to performance in the same period in 2019. "Until May 2020, SMDR recorded revenue. US $ 211.7 million, an increase of 19% from the same period last year, "said Bani on the sidelines of a public expose.

This increase in performance is the result of implementing the company's fleet composition strategy. In 2019, SMDR sold several low productivity vessels and renovated new vessels. In 2020, the ship refurbishment process will continue to run well even in a pandemic situation. The company has received one vessel to be operated in the first quarter. In April-June 2020, two ships have also been successfully launched in Japan and 1 more ship is planned to be launched in the second semester of this year.

As a shipping, logistics and transportation company, Samudera Indonesia is ready to work tough in various challenging conditions. Digital and mobile work competence is constantly being improved to keep working productively and effectively, followed by an increase in Standard Operational Procedures (SOP) and health protocols. Tara added that to support digitization, the SMDR management plans to assign millennial generation employees to handle this program. "Naturally, millennials are digital natives, we will in the near future assign special millennial employees to handle digitization," said Tara.

Meanwhile, the Samudera Indonesia GMS on Tuesday afternoon appointed Bani as the President Director. He succeeded his father, Masli Mulia, who now joins the Board of Commissioners. The company appointed Tara Hidayat as Director of HR at the GMS. The General Meeting of Shareholders decided to distribute dividends of Rp. 8 per share or a total of Rp. 26.2 billion, even though last year there was a net loss of US $ 7.41 million, reversing the performance in 2018 which posted a profit of US $ 60.21 million. The share price of SMDR on Tuesday's trade this week rose to Rp 190 from Rp 173 in the previous trade.

Questions:

1) In your opinion, how well do PT Samudera Indonesia Tbk's governance system work to protect the interests of shareholders?

2) In your opinion, will the company's performance be better next year? Are there any changes in relation to agency relationships in the company?

3) How can each of the three internal governance mechanisms - ownership concentration, board of directors, and executive compensation - be used to align managerial agent interests with those of company owner PT Samudera Indonesia Tbk?