JAKARTA - PT Dharma Satya Nusantara Tbk (DSNG), a palm plantation and wood manufacturing company, reported net profit of IDR 841.7 billion in 2023, which was 30% lower than IDR 1,2 trillion set in 2022.

The revenue in 2023 actually slipped only as little as 1.4% year-on-year (yoy), from IDR 9.63 trillion to IDR 9.5 trillion. However, the cost of revenue swelled 7% to IDR 6.97 trillion due to high fertilizer cost as an impact of the geopolitical tension between Russia and Ukraine.

Furthermore, the management also admitted that this significant decline also resulted from the poor performance of wood segment. Wood products only generated IDR 1.07 trillion of revenue, 29.2% yoy lower than IDR 1,5 trillion it brought in in 2022.

Sales volume of panel and engineered flooring both dropped 14% and 33.9% yoy, reportedly due to weak demand from export destination countries, including the US, Canada, Europe, and Japan.

"In addition, high inventory level in Japan has driven down the selling price of panel products," the management of DSNG added in the official release. This was reflected in the average selling price (ASP) decline of 17.5% YoY.

Thankfully, DSNG's palm oil segment managed to offset its wood segment's slippage by recording 2.9% increase in its revenue. It brought in IDR 8,35 trillion of sales, supported by 3.5% yoy increase in crude palm oil (CPO) production to 665 thousand tons and 1.9% growth in CPO ASP to IDR 11.39 million per ton. (ZH)