The profits of the three state-owned construction companies plunged more than 94%, see the share recommendations

Reporter: The first is blessed | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. The construction industry was still under pressure until the end of September this year. In fact, three state-owned construction companies recorded a decrease in net profit of more than 94%.

During January-September 2020, PT Wijaya Karya Tbk (LANGUAGE) fell 96.29% to Rp 50.19 billion. Profit of PT PP Tbk (PTPP) fell 94.92% yoy to Rp 26.37 billion and the profit of PT Adhi Karya Tbk (ADHI) plunged 95.62% yoy to IDR 15.38 billion.

One of the reasons for the falling profit of the BUMN Karya issuers is the decrease in income. WIKA’s income decreased by 43.28% on an annual basis (yoy) to IDR 18.3 trillion. PTPP’s revenue fell 37.02% yoy to Rp 10.02 trillion and ADHI fell 5.36% yoy to Rp 8.94 trillion.

President Director of Wijaya Karya Agung Budi Waskito said that the current achievement of WIKA’s performance reflects the ability to continue working in the midst of the pandemic challenges that have occurred since the beginning of the year. Until September 2020, WIKA has obtained a new contract of IDR 6.84 trillion. Currently, WIKA is also participating in a tender process with a total value of around Rp. 20 trillion-Rp. 23 trillion.

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“Thus, we are sure that we will be able to meet the new contract target in 2020 amounting to Rp 21.37 trillion and if this is added to the projects that have been achieved, then order book WIKA reaches Rp. 100 trillion which we can produce in the next few years, “continued Agung.

Sucor Sekuritas analyst Joey Faustian said the performance of the state-owned construction company has the potential to improve at the end of the year. Usually the absorption of the APBN budget is better in the fourth quarter of 2020. “However, the decline in performance in 2020 will still be quite large, sectorally, more than 90% on an annual basis,” Joey told Kontan.co.id, Friday (30/10).

In terms of liquidity, Joey sees construction issuers as being quite depressed because of the cash inflows in 2020 that are still below expectations. Therefore there will be a slight increase gearing for construction issuers due to an additional 10 to 15 percent interest-bearing debt.

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In 2021, continued Joey, of course this performance will recover significantly, supported by an increase in the infrastructure budget to Rp. 414 trillion, an increase compared to the projection for 2020 of Rp. 281 trillion. In addition, there is progress from work on projects obtained in the fourth quarter of 2020.

Thus, for the short term, Joey still recommends it hold for the four BUMN contractors, because the short-term sentiment will still be less than the third-quarter 2020 financial report which is below expectations. As well as the increase in the number of new Covid-19 cases that have not subsided in Jakarta.

“Too delay from the project tender because the project owner is still wait and see and the progress of the project is not progressing optimally due to restrictions on worker mobility and strict health protocols, “concluded Joey.

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