Abstract
This study aims to examine and analyze the effect of production volume and crude palm oil (CPO) prices on profitability (proxied by return on assets, ROA) and its impact on stock returns (proxied by capital gains) in plantation industry sector companies listed on the Indonesia Stock Exchange (BEI) 2013 - 2017. The sampling method used was purposive sampling. From the population of 18 plantation industry companies, 12 companies met the criteria to be sampled. The type of data used is panel data, which is collected by documentation techniques. The analytical method used in this study is multiple linear regression using Eviews version 9.0 software. The results showed that CPO production had a positive and not significant effect on ROA. The price of CPO has a negative and not significant effect on ROA. ROA has a positive and not significant effect on stock returns. CPO production has a negative and not significant effect on stock returns. CPO prices have a positive and not significant effect on stock returns. Simultaneously CPO production and prices have no significant effect on ROA and stock returns. CPO production and CPO prices simultaneously contribute more to stock returns than through ROA as an intervening variable.
Highlights
Indonesia is an agricultural country that has a very wide area
The plantations that are growing in size produce Crude Palm Oil (CPO) that continues to increase and prices are quite volatile. but the increase in CPO production did not produce good stock returns as reflected in the capital gains data of 18 plantation industry companies listed on the Indonesia Stock Exchange 2013-2017 below:
The results of this study indicate that the increase and decrease in CPO production of the company is against the direction of profitability but not significant which proves that industrial shareholders do not produce CPO, because the small size of large CPO production does not significantly affect Return on Asset (ROA)
Summary
Indonesia is an agricultural country that has a very wide area. The majority of the Indonesian population does a lot of work activities in the agriculture sector. More than 60% of GDP in the plantation sub-sector is oil palm plantations (source: Ministry of Agriculture 2016). The extent of oil palm plantations in Indonesia continues to grow to 12.3 million hectares in 2017. Http://www.ijetmr.com©International Journal of Engineering Technologies and Management Research [87]. The plantations that are growing in size produce CPO that continues to increase and prices are quite volatile. But the increase in CPO production did not produce good stock returns (capital gains) as reflected in the capital gains data of 18 plantation industry companies listed on the Indonesia Stock Exchange 2013-2017 below: The plantations that are growing in size produce CPO that continues to increase and prices are quite volatile. but the increase in CPO production did not produce good stock returns (capital gains) as reflected in the capital gains data of 18 plantation industry companies listed on the Indonesia Stock Exchange 2013-2017 below:
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