COMPARISON OF FINANCIAL PERFORMANCE BEFORE AND AFTER MERGER: AN EMPIRICAL STUDY OF PT CAP AND PT STYRINDO MONO INDONESIA

Abstract

This study analyzes the financial performance of PT Chandra Asri Petrochemical Tbk (CAP) before and after its merger with PT Styrindo Mono Indonesia (SMI), effective January 1, 2021. The merger aimed to improve integration, efficiency, production capacity, and strengthen the company’s capital structure amid rising global competition. A quantitative descriptive comparative method was used, based on secondary data from CAP’s financial and sustainability reports for 2018–2022. The analysis compares two years before the merger (2018–2019) and two years after (2021–2022), with 2020 as a transition year. Eight financial ratios were examined—NPM, GPM, TATO, FATO, CR, CAR, DR, and DER—to assess profitability, efficiency, liquidity, and solvency. Grounded in efficiency and synergy theories, mergers are expected to create value through cost reduction, asset optimization, and productivity gains, although benefits often take time to materialize. The results show mixed impacts. Profitability (NPM and GPM) fluctuated sharply, with the strongest performance in 2018, followed by declines due to rising raw material costs and market pressures. Efficiency also weakened, as shown by the drop in TATO from 0.80 (2018) to 0.48 (2022), indicating suboptimal asset utilization post-merger. In contrast, liquidity improved significantly: CR rose from 2.05 to 3.75, and CAR from 0.57 to 2.31, though excessively high liquidity may suggest idle funds. Solvency remained stable, with DR at 41–49% and DER below 1, reflecting a healthy capital structure. Overall, the CAP–SMI merger strengthened liquidity and solvency but has not yet produced consistent improvements in profitability or operational efficiency. Achieving long-term synergies will require better cost control, asset utilization, and production efficiency. Future studies should extend the observation period and consider external factors such as global oil prices and policy changes.