FINANCIAL PERFORMANCE ANALYSIS AND EVALUATION OF PALM OIL AGROINDUSTRY: AN INDONESIA EXPERIENCE

Abstract

Indonesia is the world largest producer and exporter of crude palm oil (CPO). The export
of CPO has increased by 46% from 15.1 million ton in 2008 became 27 million ton in
2016. However, the value of the export decreased by 11.67%, from US$ 21.1 billions in
2014 to US$ 18.64 billions in 2015. This was caused by the decrease of CPO export price
significantly (33.33%), from US$ 1,033/ton in 2008 to US$ 689/ ton in 2016. The Decree
No.KEP-100/MBU/2002 issued by Indonesia Ministry of State-Owned Enterprises (SOEs)
on June 2002 provides the mandatory of measuring and rating the financial health
condition of SOEs. This study aims to analyze and evaluate the financial health condition
of three Palm Oil SOEs under Indonesia Ministry of Agriculture: (1) PT Perkebunan
Nusantara I; (2) PT. Perkebunan Nusantara III; (3) PT. Perkebunan Nusantara IV for
periodsof 2011 – 2015. The results of investigating of eight financial ratios: return on
equity, return on investment, cash ratio, currentratio, collectionperiod, inventoryturnover,
totalassetturnover, totalequity to totalasset, then be validated by the decree of the SOEs
ministry to conclude the financial health condition of the companies. The result shows that
the three Palm Oil SOEs have achieved financial health condition levels with rank ratings
as follows: (1) PT. Perkebunan Nusantara IV (AA,AA,A,AA,BBB), (2) PT Perkebunan
Nusantara III (A,AA,A,BBB,BBB), and (3) PT Perkebunan Nusantara I
(A,A,A,BB,CCC).