The Government’s discourse
to reduce dividend payment for state-owned companies [BUMN] was widely
acclaimed by BUMN, as they believed that the plan to expand business could be
more aggressive.
World was out that BUMN was calculating the amount of
BUMN dividend to the Government in the discussion of APBN-P 2015 with related
ministries. In fact it was not elimination of dividend but rather reduction.
Dividend was out division of profit to shareholders of a
company based on the amount of shares owned. The division would reduce profit
held and the cash available to company, but distribution of profit was the main
objective of business.
Dividend could be divided into four categories. Firstly,
cash dividend which was the most commonplace for division of profit; paid in
cash and tax imposed based on year of issuance. Secondly, share dividend, quite
commonplace and paid in the form of additional shares usually calculated
proportionally against the shares owned. To every 100 shares owned 5 extra
shares were given. The method was like stock split because it was done by way
adding the number of shares while reducing the value of share so as not to
change market capitalization.
Fourthly, property dividend paid in the form of asset.
This way of dividend distribution was seldom exercised. Fourtly, interim
dividend, divided before closing of company’s book keeping.
Normally dividend distribution at regular interval, but
sometimes there was additional dividend given not at usual time. Dividend would
be given to shareholder only when the company made enough profit to play with
and provided the Board of Directors deemed it worthwhile to announce profit.
Dividend was common stock to obtain part company’s
profit. If the company decided to divide profit in the form of dividend all
shareholders were entitled to the same right, but giving away of dividend for
preference shareholder was prioritized.
The income expected by shareholders was fund from
dividend distribution, where the company gave part of the profit to the
shareholder. The dividend policy was inseparable part of company’s financial
decision.
Dividend policy might be defined as decision whether the
profit made by the company by year end would be distributed to shareholders or
to kept as fund for investment financing in the future. Here is where the
management of BUMN must stipulate the dividend payout ratio policy.
Dividend payout ratio was a certain percentage of income
paid to shareholders as “cash dividend” in other words, dividend payout ratio
was comparison between dividend per share and earning per share of the related
period.
In the dividend-per share was the component of dividend,
so the bigger the dividend the bigger the dividend payout ratio. The
distribution of high dividend was not something undesirable to investors, but
if the dividend payout ratio was above a certain percentage [like 25%] it was
feared there would be liquidity problem in the company.
Reduction of dividend was reckoned applied to companies
of high business potentials in the future, especially BUMN of the banking
sector whose business structure was capital intensive. BUMN of the construction
kind of business could build infra structure more aggressively, BUMN of the
banking sector could have stronger capital and be competitive especially toward
AEC era.
Referring to APBN 2015 the Government set target of Rp.44
trillion of BUMN dividend, which was higher compared to target of APBN-P 2014
at Rp.40 trillion. The dividend increase against that or 2012 and 2013 at Rp.34
trillion and Rp.30.8 trillion respectively.
Although increasing year after year, growth of divided
was quite volatile. Dividend received for APBN 2015 state budget only increased
by 10% of lower than that of APBN-P 2014 at 17.65% against that of 2013.
Meanwhile the amount received in 2013 increased by 20.39% against 2012 which
grew by 9.22%.
Target of BUMN dividend in 2015 varied. Pertamina was the
biggest dividend payer at around Rp.9.6 trillion. Furthermore Telkom at Rp.5.2
trillion while Bank BRI and Mandiri Rp.4.4 trillion and Rp.3.1 trillion
respectively.
Positive response from the Head of State. To enhance
corporate act and play a part in national development, President Joko Widodo
planned to write off dividend payment obligation to BUMN so they could execute
programs more dynamically and progress well.
President Jokowi Widodo’s directives stems from his
ambition to make BUMN gow big and spur on economic growth. The point was that
not all BUMN were making any profit in business. President Joko Widodo believed
that it would be more efficient if the dividend were kept by the BUMN so they
could invest more on infra structure.
Naturally there were consequences if BUMN decided to
reduce dividend portion; one of the solutions to compensate reduction of
divided payment was through increasing income from tax, so BUMN dividend could
be allocated to productive posts.
As told, next year the Government set target for Government
income of Rp.1,793.6 trillion. The highest income was still from tax which came
to Rp.1,201.7 trillion. Furthermore income from the Tax Dept and grant was Rp.178.3
trillion and Rp.3.3 trillion respectively while non tax income was quite
significant i.e. Rp.410 trillion.
The only thing was that if the Government decided to
reduce BUMN dividend, the BUMN Management must not lose zest to perform well to
pursue profit. Knowing that there was no target to meet, BUMN Management might
loose spirit to struggle as there was no obligation to fulfill.
So it was right indeed if the Minister of BUMN proposed
to fire BUMN managers if they performed low. BUMN as agent profit and also
agent of development must proof to the stakeholders that they deserve to hold
the position in the company.
It was noteworthy that the Government there a discourse
to inject extra capital to BUMN to develop the company. The capital could be
the spearhead of national development. As BUMN with stronger capital stepped up
their activity in business they could be in a better position to pay more tax.
In the future, the criteria for BUMN performance
appraisal would not just be the amount of dividend and tax paid but to but to
what extent do BUMN supported micro, small, and medium business [UMKM] how much
do BUMN counsel small business and to what extend do BUMN execute Corporate
Social responsibility [CSR]. (SS)
Business News - December 12, 2015
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