STOCK MARKET – JAKARTA. PT Arwana Citramulia Tbk (ARNA) is planning a share buyback. This ceramic manufacturer has prepared a maximum fund of IDR 100 billion for this corporate action.
In a disclosure of information on the Indonesia Stock Exchange, Tuesday (20/2), the share buyback is carried out to maintain the fairness of ARNA's share price by considering the share price ratio to earnings or Price to Earnings Ratio (PER) over the last 10 years.
According to ARNA, the fair value of earnings per share or Earnings Per Share (EPS) of ARNA shares is at least 15 times.
“Buying shares directly on the stock exchange will make the share price more stable and have a positive impact on shareholders,” wrote the ARNA Board of Directors, Tuesday (20/2).
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A stable share price will provide positive value and trust for shareholders and foster trust from all parties. This becomes ARNA's capital to continue to grow and develop with the support of consumers, suppliers, creditors, and other stakeholders.
The stability of the share price will also encourage towards a fairer and better value and the share price is expected to reflect the proforma achievement of ARNA's performance to date.
ARNA estimates that there will be no impact on declining revenue due to the implementation of the share buyback. The impact of the share buyback on financing costs is also very small. Because, the fee payment cost for the securities dealer intermediary is a maximum of 0.25% of each purchase transaction.
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Thus, management confirms that there are no changes to ARNA's proforma earnings due to this buyback.
The share buyback period will be held within 12 months, namely from April 1, 2024 to March 31, 2025. To carry out this buyback, ARNA must obtain approval from the Annual General Meeting of Shareholders (AGMS) which is planned to be held on March 28, 2024.
As an illustration, ARNA experienced a decline in financial performance in 2023. ARNA's revenue decreased by 5.41% year on year (YoY) to IDR 2.45 trillion at the end of 2023, from previously IDR 2.59 trillion at the end of 2022.
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This decrease occurred simultaneously with an increase in ARNA's cost of goods sold by 0.65% YoY to IDR 1.54 trillion in 2023. In the previous year, ARNA's cost of goods sold was recorded at IDR 1.53 trillion.
ARNA's sales expenses also swelled 15.19% YoY from IDR 215.98 billion in 2022 to IDR 248.78 billion in 2023. ARNA also experienced an increase in financial expenses by 41.64% YoY from IDR 7.66 billion in 2022 to IDR 10.85 billion in 2023.
By the end of 2023, the net income for the year attributable to the owners of the parent entity ARNA was recorded at IDR 445.29 billion. This figure shrank by 22.72% YoY compared to the company's net profit in the previous year which was IDR 576.21 billion.
