PalmCo Prefers Not to Enter the Stock Market This Year, Driven by Market Considerations

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Palm oil plantation. Photo by: Sawit Fest 2021 / Bernadus Ritchard

PALMOILMAGAZINE, JAKARTA – PalmCo, a subsidiary of Perkebunan Nusantara III (Persero) Holding, has officially withdrawn its initial public offering (IPO) plan on the Indonesia Stock Exchange (BEI) for this year. Jatmiko Santosa, Director of PalmCo, cited unfavorable market conditions as the primary reason for this decision, anticipating insufficient profitability.

“We will not pursue the IPO this year. The market situation is not favorable enough,” stated Jatmiko Santosa in Jakarta on Wednesday (10/1/2024). He also revealed that the company had meticulously prepared for the IPO, ensuring compliance with environmental, social, and governance (ESG) standards, as well as achieving 100% certification from the Roundtable on Sustainable Palm Oil (RSPO).

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One major factor that Jatmiko told was enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) which tends to be undervalue. He told, when indeks harga saham gabungan (IHSG) reached 7.229, EV ration to EBITDA in agro sector just reached 5. This is the undervalue. “If the number [EV to EBITDA] in agro sector just reached 5, this is the undervalue, right?” Jatmiko said in the Refleksi Industri Sawit 2023 dan Tantangan Masa Depan, that Palmoilmagazine.com attended in Jakarta.

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PalmCo has qualified the terms and conditions, such as, RSPO certificate that reached 100%. But the market condition does not support still and this made the company postpone the IPO.

PalmCo showed its seriousness to face social and environmental challenges by implementing ESG standards. But the uncertain markets and the undervalue he discussed, would be the main factors to decide that PalmCo would postpone IPO plan in BEI this year.

It reflected the awareness of the company to anticipate the risks but maintain sustainable business in the market dynamic which is in fluctuation still. Though it cancels to get into the stock this year, PalmCo is committed to keep increasing the performance and preparedness to get IPO in the right time. (T2)

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