Dear Shareholders,
It gives me great pleasure to present to you Adaro Energy Indonesia’s Annual Report for 2023, a year in which we saw the progresses made in our commitment to grow and transform our businesses for a sustainable future, while also meeting the needs of access to reliable energy.
Amidst uncertainty and complex geopolitical conflicts, 2023 also saw another operational record-breaking year for our company whereby we exceeded our sales guidance, due in part to our ability to take advantage of the opportunities presented in the industry. This was also possible largely due to our integrated business model, which has allowed us to maintain efficiency and operational excellence. The strength of our diversified business model once again proves its resilience and adeptness at a range of market conditions. Adaro remains well positioned for continued sustainable growth.
On this occasion, the Board of Commissioners (BoC) would like to congratulate the Board of Directors (BoD) for their successful guidance in navigating and leading the company and enabling the execution of its plans and strategies.
Review of work plan and performance
On behalf of the entire BoC, I would like to take this opportunity to commend the BoD on their timely strategic decisions during the year. We view that the BoD took excellent decisions to capture opportunities in our continued journey to transform and expand our company further beyond coal.
The first of these expansions are our planned aluminum smelter and hydro power plant in North Kalimantan. We were honoured to welcome the President of the Republic of Indonesia to the groundbreaking ceremony for our 1,375MW hydro power plant held in March of 2023. Our aluminum smelter construction is also continuing to progress along its planned course, and we are excited with the opportunities to create value from participating in various projects in the green economy as we aspire to become a bigger and greener Adaro.
Against the backdrop of normalising coal prices, the BoD’s consistent efforts to improve cost efficiency and the advantages of our integrated business model have enabled our company to obtain a healthy financial and operational performance.
Strategy execution
Together with the Audit Committee, the BoC monitor the effectiveness of our good corporate governance (GCG) practices. As in previous years, we continued to maintain intensive communication with the BoD in 2023 whereby the BoD regularly updated and informed the BoC on the performance of the Company.
The Board is fully supportive of the BoD’s strategies to transform and diversify the Adaro Group from a coal mining and energy company, into minerals and minerals processing businesses. We believe the development of the industrial park in North Kalimantan as the first green powered industrial park, will create viable and sustainable businesses along with long term growth, as well as creating more opportunities for us to also support the Government of Indonesia’s plans to create circular economy.
Our view on AEI’s financial and operational performance targets for 2024
As the world moves to a low carbon economy, we remain committed to meeting the energy needs of today while preparing for our transition into a more sustainable operation. We have reviewed and evaluated the company’s guidance for 2024, and fully support the targets set by the BoD. We will continue to monitor the execution of the company’s short- and long-term business plans, including strategies to ensure our businesses’ sustainability and bring value to our stakeholders.
We are aware of the importance of ESG in the mining and energy industry, and I am pleased to report that we have published our NZE statement in which we stated our commitment to achieve net zero emissions in 2060 or earlier.
Compliance and implementation of good corporate governance (GCG)
We are of the opinion that the management has done a good job in applying GCG practices in all our operations and pursued the highest level of compliance. 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, with emphasis on integrity as the main character that every employee should possess to ensure a strong foundation to sustain the growth of our company.
Composition of the Board of Commissioners
In 2023, there were no changes to the composition of the Board of Commissioners.
Gratitude and Appreciation
We thank the BoD for the professionalism and dedication in navigating the company through the right strategic route, to plan and lay the foundation for preparing the company not only in the short-term, but also in the long-term. The BoC also wishes to extend its sincere gratitude to all shareholders and stakeholders for their continued trust and support to AEI, and to all our employees for their hard work and commitment throughout the year.