Adaro Energy creates maximum sustainable value along our pit-to-power value chains to provide reliable energy and help build Indonesia. This is what drives us and is why we are so passionate about building a great company.
Adaro Energy (AE)’s business model has once again shown its resiliency in 2018 as the coal market took a tumble toward the end of the year after a strong start in the first half of the year. On the back of the solid results delivered by each business pillar, AE achieved its operational and financial targets in the midst of the more challenging market.
We extend our full support to the Board of Directors for their strategies to maintain operational excellence and strong cost discipline across the company’s safe, efficient, and effective operations. We encourage them to continue pursuing more growth opportunities.
Coal is a cyclical industry, but we believe AE has implemented a business model proven effective to overcome market volatility, i.e. getting its solid and stable non-coal business pillars to buffer volatility. This business model is a key factor to the company’s value creation endeavors.
Creating Value for Indonesia
Although we may be proud of our achievements in business, we must, most importantly, make contribution and value creation for the nation. This is the business philosophy championed by the late William Soeryadjaya and Teddy Thohir, and we share the same belief to grow together with the nation. This message is unceasingly repeated to the Directors.
AE’s commitment to Indonesia is manifested not only in royalties and tax contributions, which in 2018 amounted to US$721 million, but also in the behavior of a responsible corporate citizen. The Adaro Group treats corporate social responsibility (CSR) as a part of its operations and has established a foundation to better coordinate CSR programs across all pillars for sustainable results.
In 2018, the company took another step to emphasize its commitment by committing to a grant match scheme for “Adaro Nyalakan Ilmu”, a comprehensive CSR initiative to enhance the quality of education.
AE is also participating in the government’s initiative to increase access to electricity and clean water. AE’s resources can certainly be utilized to create value and contribute positively to the nation by making electricity and clean water supply more available for Indonesian people.
Review of Strategy Execution
We must ensure that the management executes business plans and strategies with full adherence to our Code of Conduct and the applicable regulatory requirements. We fulfil this responsibility by maintaining frequent communication with the Directors through regular and impromptu meetings to ensure that we get updated on various company’s aspects with accurate information.
Additionally, we receive information and reports from all of committees in the company so we can have objective perspectives on the developments within the company. We hereby declare that the Board of Directors has performed its management and executive functions very well in 2018.
Implementation of Good Corporate Governance
We observe that the management has dedicated their best efforts to make GCG an integral part of the operations and pursue the highest level of compliance to its principles. This includes conducting periodical reviews and evaluations on the implementation of GCG principles to identify improvement options and necessary adjustments and carrying out operations within compliance with the prevailing laws and regulations.
The company also continues to instill the Adaro Values of integrity, meritocracy, openness, respect and excellence among the employees, as the guiding principles for their behaviors at work and implementation of work activities. A set of compliance-based code of conduct that specifies and guides the implementation of the corporate values and principles as the standard of behavior has also been formulated and promulgated.
Changes to the Board of Commissioners’ Composition
With deep sadness, we have to announce the passing of AE’s Independent Commissioner, Ir. Palgunadi Tatit Setyawan in May 2018. We are truly grateful to have known him and had the opportunity to work together for the best interest of Adaro Energy.
Positive Outlook in 2019
We have reviewed and approved the Directors’ 2019 strategic plans for operational and fiancial objectives. The targets are conservative and prudent. We are confient that the management’s ability to formulate and effectively execute the right strategies to maintain cost leadership and operational excellence will continue to develop the company’s business and deliver excellent financial performance.
Gratitude and Appreciation
In closing, we greatly appreciate the Board of Directors’ performance and commitment to value creation, and on behalf of the Board of Commissioners, I would like to congratulate the management and all employees for their conscientious efforts in growing Adaro Energy into a leading Indonesian mining and energy group. We also thank our shareholders and stakeholders for their unrelenting support for Adaro Energy.