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Builders grow in Q1 but at slower pace than last year

The country’s publicly listed builders cemented slower growth during the first quarter of the year in comparison with what they achieved in the same period last year, proving analysts’ projection of a possible slowdown in construction projects during the election year

Anggi M. Lubis (The Jakarta Post)
Jakarta
Wed, April 30, 2014

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Builders grow in Q1 but at slower pace than last year

T

he country'€™s publicly listed builders cemented slower growth during the first quarter of the year in comparison with what they achieved in the same period last year, proving analysts'€™ projection of a possible slowdown in construction projects during the election year.

PT Pembangunan Perumahan (PP) recorded a 55.72 percent increase in revenues to Rp 2 trillion (US$173.18 million) between January and March, according to the company'€™s latest financial statement. In last year'€™s first quarter, the company booked an 80 percent increase in revenues to Rp 1.28 trillion.

The revenue growth has pushed up PP'€™s net profit by about 44 percent year-on-year (y-o-y) to Rp 61.4 billion in the first three months of 2014. Last year in the same quarter, PP'€™s net profit nearly doubled to Rp 42.54 billion from the previous year.

PP president director Bambang Triwibowo said that the rise in revenues was driven by the Rp 4.5 trillion worth of new contracts the company secured in the first quarter '€” with its construction, investment, precast and engineering, procurement and construction (EPC) business lines all contributing to the total revenue.

'€œOur total [outstanding] contracts in the first quarter amounted to Rp 26.44 trillion, with Rp 26.43 trillion in carryover contracts from last year,'€ Bambang said.

PP has set a revenue growth target of 40 percent to Rp 16 trillion throughout this year, compared to Rp 11.65 trillion last year, supported by the Rp 24 trillion in new contracts it aims to secure this year.

Construction research center BCI Asia Indonesia has previously estimated that the country'€™s construction sector might secure a total of Rp 493 trillion in new contracts in 2014, up 14.7 percent compared to Rp 428.5 trillion in contacts carried out last year '€” with stronger demand for commercial
buildings.

BCI Asia Indonesia Country Manager Agus Dinar, however, said that this year'€™s estimated annual growth was actually a decline from last year, when the country booked a 39 percent increase in new contracts compared to the previous year.

Agus cited Indonesia'€™s legislative and presidential elections, as well as the country'€™s not-so-strong macroeconomic conditions as the prime factors that would discourage aggressive growth in new contracts.

Another publicly listed state '€”owned construction firm, Waskita Karya, posted about 8 percent y-o-y revenue increase during the January-March period, up from Rp 957.38 billion last year to Rp 1.03 trillion.

Waskita Karya'€™s net profit rose 24.5 percent to Rp 6.76 billion during the period, compared to the Rp 5.43 billion it earned in the first three months of 2013.

The growths were far lower compared to the company'€™s performance in the first three months of last year, in which it booked an 18.7 percent increase in revenues and a sixfold increase in its net profit, from Rp 806.12 billion and Rp 823.57 million, respectively, in 2012.

Waskita is aiming to secure a 20.4 percent increase in net profit throughout this year to Rp 443 billion, and a 22 percent increase in revenues this year.

It is projected to see its new contracts grow 42 percent to Rp 18.7 trillion, compared to last year'€™s Rp 13.1 trillion

Total Bangun Persada, on the other hand, saw its net profit slump by nearly 34 percent to Rp 35.39 billion during the first quarter, compared to the Rp 53.52 billion recorded during the same period last year. Its revenues decreased 6.3 percent to Rp 547.81 billion from Rp 584.65 billion last year.

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