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Waskita set to double revenue, profits

Waskita set to double revenue, profits

JAKARTA: State-run construction company Waskita Karya is planning to double both its revenue and net profits this year, thanks to a number of prospective infrastructure projects that are expected to help the company see a surge of new contracts.

Waskita Karya president director M. Choliq said over the weekend that his company wrapped up last year with Rp 14.1 trillion (US$1.03 billion) and Rp 1.04 trillion on its top line and bottom line, respectively.

“As for this year, we aim to see revenue hitting Rp 27 trillion and net profits hitting around Rp 2 trillion,” Choliq said.

The figures mean Waskita is targeting to see its business to grow by more than 90 percent in 2016.

The growth, Choliq said, would mostly be supported by a number of projects — particularly toll roads — that were expected in the company’s order books this year. He added that his company was eyeing combining toll road projects with its existing projects.

Choliq previously said that his company targeted to see new contracts double from Rp 30 trillion last year to Rp 60 trillion this year.

Separately, Waskita finance director Tunggul Rajagukguk said that among the projects his company was interested in were the Kayuagung-Palembang-Betung toll road in South Sumatra and the next stage of Sumatra’s power grid project.

The South Sumatra toll road, according to media reports, will span 117 kilometers and is expected to absorb Rp 14.4 trillion of investment. The project was initiated by the South Sumatra administration.

A local firm, Sriwijaya Markmore Persada, has been appointed to lead the project, which is expected to conclude in 2017.

As for the Sumatra grid, Tunggul said his company was looking for further involvement in the project.

“We have engaged in the first stage of the development and we want to continue to the next phases,” he told reporters.

As part of the 1,400-km transmission grid project, state electricity firm PLN awarded a contract for the development of the first two sections to Waskita, which will develop a 235-km section from New Aur Duri in Jambi to Peranap in Riau and a 160-km section within Riau, connecting Peranap to Perawang.

The total value for the two sections is Rp 6.71 trillion and Waskita is expected to build them within three years, according to a deal signed in October last year.

The company may need Rp 10 trillion to finance its projects this year, and among possible sources to meet funding needs is issuing bonds.

Tunggul said his company was preparing to issue bonds up to Rp 2 trillion around the end of the first half of the year, the debt papers for which would be part of a series of bonds amounting to Rp 5 trillion to be issued in the next two years.

In particular, the bonds would be used to finance projects that might take two years or more for construction, including the existing transmission grid project and the light rapid transit (LRT) project in Palembang.

With the 2015 revenue and net profit estimation, Waskita recorded around a 37 percent increase in its revenue from Rp 10.29 trillion recorded in 2014 and double its net profits from Rp 501.53 billion posted during the year. The company’s newly established toll road and precast concrete units, as previously reported, were its main drivers for growth during 2015.