Transformation of SOE Ministry Annual Report 2020

68 MANUFACTURING CHAPTER 1 2 3 4 5 6 7 SOE PORTFOLIO & CONSOLIDATED FINANCIAL PERFORMANCE REVIEW Assets Composition of Manufacturing Cluster - 31 December 2020 7% 2% 1% 4% 2% 7% 9% -13% 55% KS DI Pindad PAL LEN Dahana BKI Suco SI Steel Defense Survey 2020 Milestones > KS finalized the 2019 Credit Restructuring Agreement and signed the 2020 Mandatory Convertible Bond Issuance Agreement › Launched of TIC Institute by BKI - Sucofindo - Surveyor Indonesia Financial Parameter Rp Billion 2020 2019 Revenue Operating Income 36,954 1,465 EBITDA 2,352 40,079 -968 -571 > EBIT 1,027 -2,000 2020 Performance Analysis Due to mobility restrictions, the COVID-19 pandemic caused a slowdown in production activities, resulting in a 7.8% decrease in revenue of Manufacturing Cluster. Specifically, the decrease was due to: Significant decline in steel prices, in which increased demand for steel in 2020 could not offset the decline in prices. Composition of Manpower 2020 by: Gender NOPAT Net Profit 3,399 -3,583 405 -6,512 > Lack of realization of contracts between the defense industry sub-cluster and the government. Assets 88,892 Invested Capital (A+B) 87,093 64,068 61,328 > A. Financing Liabilities Current Non Current B. Capital 46,172 44,785 12,409 37,341 33,763 7,444 17,896 16,543 Financial Performance Indicators Operating Margin EBITDA Margin Net Margin ROA ROE ROIC 4.0% -2.4% 6.4% -1.4% 1.1% -16.2% 0.5% -7.5% 2.3% -39.4% 5.3% -5.8% The decline in the Survey Industry was mainly due to a decrease of potential work because of the pandemic, particularly in the mining sector and institutions, and a decrease of profit contribution from KSO SI-Sucofindo. Despite the decline in revenue, net profit increased by 106.2% to Rp405 billion in 2020 compared to the Rp6.5 trillion loss in 2019, which mainly contributed by the steel sub-cluster as a result of operating costs efficiency. EBITDA stood at Rp2.4 trillion in 2020, an increase from the previous year. It was due to more efficient steel production costs, as reflected in the increased capacity utilization of each plant and the decreased operating expenses in the defense industry sub-cluster. Assets & Liabilities In terms of financial structure, debt to EBITDA ratio and debt to invested capital ratio decreased to Gearing Ratio & Capital Structure 19.6x and 72.1%, respectively, in 2020. Debt to Invested Capital Debt to EBITDA EBITDA to Interest Coverage 72.1% 73.0% 19.6x -78.4x 0.8x -0.2x 14% 39% 21,769 Male Female Education 21,769 O 3% ≤D3 Bachelor Degree Post Graduates Age 16% 21,769 15% <45 45-55 >55 69% MINISTRY OF STATE-OWNED ENTERPRISES FERTILIZER & FOOD Assets Composition of Fertilizer & Food Cluster - 31 December 2020 207 2% 1% 1% 1% 0% 0% 0% -8% 13% > 71% Pupuk Bulog Fertilizer Bulog RNI SHS PPI Pertani BGR Garam Agri & Trading Financial Parameter Rp Billion 2020 2019 Revenue 113,722 Operating Income EBITDA 86% 109,094 7,190 7,580 11,366 11,297 > EBIT 7,005 7,544 NOPAT 6,190 Net Profit 1,016 6,767 151 Assets Invested Capital (A+B) 172,321 195,768 147,743 172,337 > A. Financing 58,076 83,064 Liabilities Current Non Current B. Capital 27,079 60,011 30,997 23,053 89,666 89,273 > Financial Performance Indicators 58% Operating Margin EBITDA Margin 6.3% 6.9% 10.0% 10.4% Net Margin 0.9% 0.1% ROA 0.6% 0.1% ROE 1.1% 0.2% > ROIC 4.2% 3.9% Gearing Ratio & Capital Structure Perindo Berdikari Perinus ANNUAL REPORT 2020 2020 Milestones > Signing of MoU between PI and INPEX regarding Gas Supply Launching of Agro Solution Program for all fertilizer manufacturers under the Pupuk Indonesia Group › Cooperation to procure health equipment for the COVID-19 emergency hospitals > 2020 Performance Analysis Revenue of Fertilizer and Food Cluster stood at Rp113.7 trillion in 2020 or increased by 4.2% compared to the previous year, which mainly due to an increase of sales volume in the food, fertilizer, non-fertilizer, and staple food (particularly rice) sectors. Fertilizer and Food Cluster net profit was Rp1.0. trillion in 2020 or increased by 572.85% compared to the same period in the previous year at Rp151 billion. The increase was mainly due to improved profit and loss performance in the food sub- cluster (RNI and PPI) and the Bulog sub-cluster, which resulted in a less amount of loss in 2020 compared to 2019. In 2020, the fertilizer sub-cluster received an assignment from the government to provide subsidized fertilizer. It successfully distributed a total of 8.43 million tons of subsidized fertilizer in an effort to support the government in maintaining food security. In carrying out its public service function, the Bulog sub-cluster absorbed 1.26 million tons of rice from domestic farmers in 2020. In terms of rice distribution in the context of public service assignment, the Bulog sub-cluster had distributed a total of 1.63 million tons of rice in 2020. Assets & Liabilities Assets of Fertilizer and Food Cluster stood at Rp172.3 trillion. Compared to the Rp195.8 trillion in 2019, it decreased by 12%, which mainly due to the payment of short-term loans in the Bulog sub-cluster and payment of fertilizer subsidy receivables from the government for underpayments in 2017, 2018, and part of 2019, which then used to repay some of the bank loans. Overall, debt to invested capital ratio and debt to EBITDA ratio improved compared to the previous year to 39.3% and 5.1x, respectively. Composition of Manpower 2020 by: Gender 25,176 14% 30% 3% Male Female 86% Education 67% 25,176 ≤D3 Bachelor Degree Post Graduates Age Debt to Invested Capital Debt to EBITDA 5.1x 39.3% 48.2% 7.4x EBITDA to Interest 2.2x 1.7x Coverage > RESILIENCE AMIDST UNCERTAINTY RESILIENCE AMIDST UNCERTAINTY 25,176 5% 20% <45 45-55 >55 75% 69

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