Praise the Lord to God almighty, by dint of his blessing the Company can pass the financial year of 2018 with excellent performance growth. On behalf of the Board of Directors, kindly allow me to convey the number of Company important achievements during the 2018 financial year to stakeholders.
2018 Economic Conditions
The World Bank says 2018 global economic growth was expected to decline slightly compared to the previous year, from 3.1% in 2017 to 3% in 2018, and Indonesia's economic growth slightly increased from 5.07% to 5.17% in 2018. This was because of declining trading activities and downfall of oil and commodity prices such as coal, palm oil etc. This pressure was also reinforced by China's economic slowdown, global economic downturn and the impact of the US and China trade wars.
The decline was also caused by certain factors in economy. Factors that influence include factors of production, investment, foreign trade, balance of payments, monetary policy, inflation, and state finances.
Company Performance Analysis
In accordance with the direction of Shareholders and Board of Commissioners, Board of Directors takes several strategic policies to ensure the Company's business growth remains positive. The company continues to innovate in generating sustainable profits. The company reviews various alternative financing projects, including the plan to issue bonds to maintain sustainable growth at double digit level.
In the short term, the Company continues to increase vessel utilization above the targeted average. In the long term, in 2018 the Company has taken strategic steps by changing the course of business, from transportation to energy distribution. Moreover, the Company will develop floating gas regasification facilities, harbour / dredging maintenance to generate sustainable income and profits.
The Company's revenue was surpassing the target set in 2018, growing by 20.83% compared to the previous year's Revenue which was US$67.71 Million to US$81.81 Million. The Net Profit increased by 25.37% from US$10 Million to US$12.54 Million. In terms of asset capitalization, excellent performance in 2018 was also indicated by an increase in total assets.
In 2018, total assets were recorded at US$197.36 Million and also maintained a stable stock price at a price range of IDR700-715/share. Related to investment, in 2018, the Company succeeded in investing 1 (one) unit of oil carrier tankers with its investment value of US$8.7 Million.
In the effort of HITS to pass 2019, the Company will experience various challenges consider the year of Indonesian political parties. The company will counter those challenge by a strategy of developing LNG transportation business to the East Asia region which is currently growing rapidly, developing methanol transportation in the country, which the Company has mastered the domestic transportation of methanol as much as 80%, furthermore the Company will also focus on port maintenance in certain cities.
Analysis of Business Prospects
Along with the increasing growth in global energy needs, especially in East Asia region which is predicted to experience growth of over 6%, that the Company continues to strive in reaching new markets while maintaining existing customers.
In addition, the Company will also continue the Floating Storage Regasification Unit (FSRU) project which will support Company's revenue in the coming years. Not only that, HITS also continues to develop oil, petrochemical and gas distribution. This segment is still considered very promising along with the growth in needs, especially domestic demands.
In an effort to maintain growth, risk management is the main strategy. In 2019, Management will be going to transform from the "Sea Transportation Business to Energy Distribution". This big step will integrate regasification and storage of LNG with oil distribution. This is believed to provide sustainable growth for the Company.
Development of GCG and CSR Implementation
The Company is committed and consistent in carrying out and implementing good corporate governance (GCG). This commitment must be known and carried out by all Company personnel starting from Board of Commissioners, Directors, Management and Employees, in order to fulfil the common goals between the Company and stakeholders.
During the 2018 period, we continued to implement the Company's value of life, which is “To Be The Reliable Partner”, with its focus on Company's corporate culture, HITS: Harmony, Integrity, Trust and Service Excellence that has been introduced since 2012 as the core of Company's GCG spirit.
The Board of Directors believes that the application of GCG principles will encourage the Company to provide added value to all Stakeholders.
The commitment to implementing CSR is also indicated by Company's focus on sustainability. Referring to ISO 26000, the application of CSR is oriented to the profit or financial benefits of Company and stakeholders, People or the community, as well as the Planet or environment where the Company operates (known as the 3P concept, namely Profit, People, Planet).
During 2018, HITS has distributed funds amounting to IDR19,047 Billion which was channelled through: various environment activities, Social and Community, Manpower and Occupational Health and Safety, customers and other philanthropic activities.
Changes in the Composition of Directors
In 2018, there has been a change in Board of Directors composition based on Shareholders' decision. Shareholders has assign Budi Haryono as President Director replacing Theo Lekatompessy atompessy, and assign Taufik Agustono as Director. On behalf of the Board of Directors, we would like to convey our gratitude to Mr. Theo Lekatompessy atompessy, for his contributions and services to Company as the President Director and Congratulations on the new assignment as President Commissioner.
The composition of the new Board of Directors it is expected to continue to encourage the active role of the Board of Directors each member in carrying out the mandate of Shareholders, managing the Company so that it can improve the performance of HITS in the coming years.
We recognize that the achievement of the Company in 2018 will never happen without support of customers, suppliers, working partners, management teams and employees, as well as other stakeholders. For this reason, the Board of Directors would like to convey our gratitude and best appreciation to all parties who have and continue to support Company's joint efforts in achieving its Vision and Mission.