Articles

Financial Impact Analysis of Carbon Pricing on Geothermal Power Plant Project Investment at PT PLN (Persero)

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Climate change is a significant global challenge, mainly driven by greenhouse gas (GHG) emissions. The energy sector is a major contributor to GHG emissions, accounting for approximately 73% of global emissions in 2022. Within the energy sector, electricity emitted 13 GtCO2 or contributes approximately 35% of global emissions related to energy. To address this challenge, PLN, a state-owned electrical utility in Indonesia, has declared a roadmap to achieve Net Zero Emissions by 2060. The company has also implemented some strategic initiatives to achieve the goal. Carbon pricing is one of the key efforts that enable PLN to receive incentives for reducing GHG emission while also enhancing financial performance. This study examines effects of implementing a carbon trading mechanism on the financial metrics of a 110 MW Geothermal Power Plant project investment. The results demonstrate a 13.58% increase in NPV, a faster payback period from 8.37 to 7.67 years, and a 0.31% rise in the MIRR. These results indicate the potential improvements in project investments financial performance that PLN can achieve while still aligning with global environmental objectives.

The Interplay of Digital Maturity, Financial Performance, and Stock Returns in Indonesian Publicly Listed Banks

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Indonesia’s banking sector is undergoing a digital transformation driven by Industry 4.0. This study examines how digital maturity and financial performance, measured by Return on Assets (ROA) and Net Interest Margin (NIM), influence the stock performance of publicly traded Indonesian banks. Employing a quantitative approach, this study measures digital maturity by analyzing the frequency of technology-related terms in annual reports using NVivo software. Panel data regression with EViews software is then used to assess the impacts of digital maturity, ROA, and NIM on stock performance. The study reveals a positive and statistically significant relationship between ROA and stock returns, while digital maturity and NIM do not exhibit statistically significant effects. These findings suggest that investors prioritize financial strength and efficient asset management over digital activities when evaluating bank performance. The study concludes that digital maturity alone does not significantly influence stock returns, highlighting the need for banks to effectively translate digital initiatives into tangible financial benefits and clearly communicate these outcomes to investors. This research contributes to the existing body of knowledge on digital transformation and financial performance in the banking sector, offering valuable insights for investors and bank management decision making.

Comparing Company Valuation Before and After IPO Study Case PT Pertamina Geothermal Energy Tbk

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Affordable energy resources of energy play a crucial role in economic and social development to support food production, availability of water supply and sustainable healty lifestyle. In order to avoid long-term scarcity resulting from the continuous use of non-renewable energy sources, we must explore all potential renewable energy source that align with concernes about climate change and other environmental issues. As a continuation of the Indonesian government’s efforts to generate clean and environmental friendly energy, PT Pertamina Geothermal Energy (PGE) was established in 2006. It has contributed 82% of the installed geothermal energy capacity in Indonesia. By leveraging Indonesia’s location within the Ring of Fire as one of the world’s geothermal energy hubs, PGE has been supplying electricity to more than 2 million households in Indonesia with a potential emission reduction of 9.7 million tons of CO2 per year. To achieve sustainable business growth, PGEO is optimizing production in its operational areas by expanding installed capacity. In the company consideration, IPO is an appropriate step to financing the expansion. The author compares the company’s value before and after the IPO to determine the short-term impact of the IPO, helping investors gauge their confidence in making investment decisions in PGEO.

This study utilizes secondary data from prospectuses, financial statements, annual reports, sustainability reports, company-published documents, as well as data from IDX.co.id and IDN Financials.com. The data was collected and analyzed to understand evaluate financial performance, and assess the company’s value before and after the IPO. The calculation of the company’s intrinsic value is conducted using the Discounted Cash Flow Valuation method for the pre-IPO period against the company’s financial projections for the years 2019 to 2022 and for the post-IPO period against the company’s financial projections for the years 2024 to 2028, using discount rates of 8.25% and 8.65% for each. In resulting the intrinsic value pre-IPO is IDR 1.141,28 and the intrinsic value post-IPO is IDR 1.300,86. The stock price of PGEO at its IPO on February 23, 2023, was IDR 875, while the adjusted closing price on December 29, 2023, was IDR 1,170. This study founds that the market price of PGEO’s stock, both before and after the IPO, are overvalued.

Study Case: Company Valuation and Forecasting Financial Trends at PT PP London Sumatera Indonesia (LSIP)

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PT PP London Sumatra Indonesia Tbk (LSIP) is a company that has been established in Indonesia since 1906 and started its IPO in 1996 with an IPO price of Rp4.650 for each share. Even though the company’s performance is going well and the trend of palm oil consumption in Indonesia is increasing, the share price of PT PP London Sumatra Indonesia Tbk has fluctuated and even decreased when compared to the initial IPO price and share prices in the last 5 years. So this raises the question of how the company’s stock performance will be in the next few years. In this research, the author begins by analyzing the macro-environment which may have an impact on the company and industry, then the author carries out an analysis of the financial statements of the company and its competitors. Apart from that, the author also tries to forecast the company’s financial performance and then continue with company valuation analysis using the discounted cash flow method. After getting the valuation results, the author tries to see the company’s level of sensitivity using scenario analysis and also carries out capital structure analysis to find the optimal capital structure. Based on the results of financial performance analysis, Lonsum (LSIP) has better financial performance compared to its competitors except for assets turnover. And then based on the results of discounted cash flow analysis, this company is not yet worthy of being a place for us to invest. And the last based on all the results of the previous analysis, when compared with competing companies, LSIP is a company that has quite a lot of potential as a place to invest. However, currently the company still has to look for a catalyst in order to become a company that is worthy of being a place for us to invest.  Based on the result, the author suggest the reader to continue to collect information related to PT PP London Sumatra Indonesia Tbk, other competitors and plantation in similar industries to find catalysts that have positive impact on the company, and invest when the company has a positive catalyst.

Impact of Financial Performance and Economic Value Added (EVA) On Stock Returns before and after Covid-19 Pandemic: A Case Study of Telecommunications Companies Listed on IDX

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This research aims to investigate the impact of financial performance and Economic Value Added (EVA) on stock returns of telecommunication companies listed in the Indonesia Stock Exchange before and after the COVID-19 pandemic. Financial performance in this research is proxied by Return on Assets (ROA), Return on Equity (ROE), Price-Earnings Ratio (PER), Debt-to-Equity Ratio (DER), Net Profit Margin (NPM), and Earnings per Share (EPS). The study employs a purposive sampling method and selects 10 companies in the telecommunication sub-sector for analysis. The type of research used is a quantitative research design, including Panel Data regression analysis and the Wilcoxon Signed Ranks Test. The findings of this study show that ROA, ROE, and PER significantly impacted stock returns before COVID-19, however, this impact did not exist after the pandemic; DER, NPM, and EPS consistently affect stock returns both before and after the pandemic; and EVA only becomes significant after the pandemic. Simultaneously, ROA, ROE, PER, DER, NPM, EPS, and EVA influenced stock returns before COVID-19, but they did not have any impact after the pandemic. Despite these individual shifts, there are no significant differences in overall financial performance metrics and stock returns between the before and after COVID-19 periods. Future research should consider additional financial metrics or external factors such as market volatility, inflation rates, or industry-specific variables to provide a more comprehensive understanding of stock return determinants.

Comparative Analysis of Pra-Post Merger and Acquisition Financial Performance Reviewed From EVA, MVA and Financial Ratio Methods (Empirical Study of Non-Financial Sector Companies Listed on the IDX for the Period 2015-2020)

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This study aims to compare the pre-post M&A financial performance of non-financial companies listed on the Indonesia Stock Exchange (IDX) in the 2-year period before mergers and acquisitions (M&A), in the year of M&A, and 2 years after M&A. Performance was measured using Economic Value Added (EVA), Market Value Added (MVA), and financial ratios. The research sample consisted of 22 companies selected by purposive sampling, and secondary data were analyzed from financial statements. Partial analysis was conducted with the Wilcoxon Sign Test because the data was not normally distributed, while simultaneous analysis used the MANOVA test with the STATA version 17 application. The results of simultaneous testing showed no significant difference in financial performance between before and after M&A. However, partial test results found significant differences in MVA variables in the period 2 years before, 1 and 2 years after M&A, as well as in the year of M&A. In addition, the ROA variable also shows significant differences in the 2-year period before, 1 and 2 years after M&A. However, the effect of M&A on MVA and ROA variables tends to be negative.

An Exploratory Data Analysis (EDA) Approach for Analyzing Financial Statements in Pharmaceutical Companies Using Machine Learning

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This research investigates the use of Exploratory Data Analysis (EDA) and machine learning techniques to analyze financial statements (FSs) of pharmaceutical companies. The study focuses on three major Indonesian pharmaceutical companies: Kimia Farma, Kalbe Farma, and IndoFarma. By leveraging EDA, this study aims to uncover hidden patterns and insights within financial data, such as earnings per share (EPS), return on capital employed (ROCE), net profit margin, and inventory turnover ratio. Additionally, the study employs machine learning models, including Linear Regression, K-Nearest Neighbor (KNN), Support Vector Machine (SVM), and Decision Tree, to predict financial performance metrics and trends. The performance of these models is evaluated using metrics such as Root Mean Squared Error (RMSE), Mean Squared Error (MSE), Mean Absolute Error (MAE), and Mean Absolute Percentage Error (MAPE). Among the models tested, the Decision Tree model demonstrated the highest performance, indicating high accuracy and a strong fit to the data. These results highlight the potential of data-driven approaches in improving the operational efficiency and financial stability of healthcare organizations.

Green Accounting, Financial Performance, and Company Value: A Bibliometric Study

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This research aims to examine the interconnection between green accounting, financial performance, and company value. This study employs a bibliometric approach utilizing bibliographic coupling and co-occurrence analysis, identifying 119 relevant articles on Scopus. The results reveal two prominent clusters, namely sustainability and sustainable development. Green accounting not only influences financial performance and company value but also has the potential to impact sustainability and sustainable development. For companies to thrive, it is crucial to consider corporate interests and environmental sustainability. This research will benefit researchers and academics exploring the relationship between green accounting, financial performance, and company value.

 

The Influence of Sustainability Disclosure on Financial Performance: A Study of Indonesian Firms

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This study examines the correlation between the disclosure of sustainability measures and the financial success of companies in Indonesia. The increasing importance of sustainability disclosure, which includes environmental, social, and governance factors, for firms to demonstrate their dedication to sustainable practices, has generated significant debate on its influence on financial results. This study investigates the impact of sustainability disclosures on the financial performance of companies in Indonesia, thus adding to the existing body of knowledge on this topic. The study utilizes a mixed-method approach, incorporating qualitative content analysis of data extracted from annual reports, as well as quantitative analysis derived from financial statements of publicly traded corporations. The sample consists of companies from three major industry sectors, each demonstrating different levels of quality in disclosing their sustainability practices. Accounting-based indicators like return on assets (ROA) and return on equity (ROE) are used to evaluate financial performance. The findings demonstrate a direct and favorable relationship between the caliber of sustainability disclosures and financial performance, specifically in sectors that are highly responsive to environmental concerns. Companies that have more comprehensive and transparent sustainability reporting processes in these industries generally achieve better performance compared to those with less comprehensive reporting. These conclusions have substantial ramifications for firms, investors, and policymakers. Enhancing sustainability disclosure can enhance a company’s financial performance and act as a significant factor for investment choices, providing information about a company’s dedication to sustainability and related risks. Policymakers can utilize these observations to support the implementation of improved sustainability reporting regulations, thereby fostering sustainable economic growth in Indonesia. Ultimately, the research confirms that Indonesian companies who provide detailed and reliable information on their sustainability efforts have a positive correlation with their financial performance. This emphasizes the significance of improving these practices to achieve both economic prosperity and sustainable development objectives.

Stock Valuation and Dividend Policy Decision of PT ELSA INDONESIA, TBK

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Oil shortages began in 2015 due to underinvestment caused by ESG policy. Oil firms need the funds to finance their new refinery, rig, and exploration since most western countries are switching from oil to alternative energy.

Geopolitical and economic instability, fear of a downturn, and rising inflation have harmed the worldwide Oil and Gas services market Since Russia invaded Ukraine in 2022, oil prices rose to USD122/barrel for WTI and USD128/barrel for Brent. WTI fell to USD80/barrel and Brent to USD86/barrel by 2022, despite mid-year volatility. PT Elnusa Tbk is an integrated oil services company through its subsidiaries, offers services that include geophysical data, drilling, and oilfield services. The objective of this research is proposes to evaluate the financial performance, valuation and making a recommendation for ELSA regarding its cash. Two methods of valuation are utilized to estimate ELSA’s intrinsic value: absolute valuation and relative valuation. Discounted Cash Flow to the Firm (DCF) model is used for absolute valuation, meanwhile Price to Book Value (PBV) and Price to Earning Ratio (P/E Ratio) methods are used for relative valuation. Dividend policy and buyback share projection is conducted to find the best decision for ELSA. By referring to absolute valuation, ELSA’s intrinsic value is estimated at IDR639/share. By referring to relative valuation using PBV and P/E methods, ELSA’s intrinsic value is calculated at IDR 564/share . These numbers are significantly higher than ELSA’s current price at IDR 378/share, thus providing relatively high margin of safety.in the following stage ELSA will keep on paying dividends to the shareholders. With ELSA DPR 33,25% in 10 years ELSA will have 4,756,289 million in 10 years and the cash could be for management risk if a big crisis or force majeure.