In the business world, creating value for shareholders is a company’s primary objective. Shareholder value refers to the benefits provided to equity owners through a company’s ability to increase profits, pay dividends, and raise stock prices over time. PT Bukit Asam (PTBA), one of Indonesia’s leading mining companies, provides a concrete example of managing this crucial aspect of corporate strategy.
Speaking to students of SBM ITB on Thursday (24/4), Suherman, PTBA’s Director of Human Resources and Acting Director of Finance, explained that the company’s approach to sustainable value creation extends beyond coal mining. PTBA implements a comprehensive strategy across multiple sectors. In mining, the company focuses on managing reserves, increasing production capacity, and driving initiatives in decarbonization, digitalization, and operational efficiency.
In the downstream energy and utilities sectors, PTBA develops coal derivative products, constructs environmentally friendly coal-fired power plants, and expands into renewable energy. The company optimizes coal transportation, develops infrastructure, and diversifies market segments within the logistics, infrastructure, and trade sectors. Additionally, through its green business initiatives, PTBA engages in carbon management, promotes product life cycle improvements, and supports eco-friendly solutions.
According to Suherman, PTBA has five main objectives in delivering shareholder value. First, the company aims to increase profitability, as reflected in rising profits and key indicators such as Return on Equity (ROE), Return on Invested Capital (ROIC), and profit margins. Second, PTBA pursues growth by developing subsidiaries that contribute to the parent company’s expansion, as measured by revenue and market share.
The third objective is to ensure business continuity (going concern), securing long-term sustainability. Fourth, risk management is a core focus, particularly in overseeing corporate investments to protect the company’s value. Finally, PTBA is committed to maintaining a healthy cash flow, with indicators including Free Cash Flow (FCF), Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and Dividend Yield.
PTBA’s journey illustrates a key principle in shareholder value creation: it is not solely about maximizing short-term profits or dividends, but also about building a resilient and sustainable enterprise. By balancing financial performance with environmental and social responsibility, PTBA demonstrates that companies can grow and thrive while positively impacting the world.