While some state-owned enterprises (SOEs) expect better financial performance in the second half this year, some others are preparing for possible rupiah fallouts.

State construction firms Wijaya Karya (Wika) and Adhi Karya hope to pocket higher revenues in the second half, when many infrastructure projects are expected to kick off.

Wika finance director Adji Firmantoro said recently that his firm would stick to its target to book Rp 31.64 trillion (US$2.3 billion) in new contracts this year despite only around 33 percent of the target being earned in the first half.

'€œMost new contracts will come in the fourth quarter as we won most of the tenders in the third quarter,'€ he said. Wika is set to handle the development of the government'€™s high speed train project that will connect Jakarta and Bandung in West Java, expected to start this year or early next year.

The firm aims to book Rp 16 trillion in revenues and Rp 688 billion in net profit this year.

Wika recorded an 18.3 percent plunge in revenues to Rp 4.78 trillion in the first half of this year from
Rp 5.85 trillion during the same period last year. Another state construction firm, Adhi Karya, is also upbeat that it can meet its target although it booked lower-than-expected performance in the first half of this year.

'€œThe new contracts usually pick up in the second half,'€ Adhi Karya president director Kiswodarmawan said previously. Adhi booked Rp 6.1 trillion in new contracts as of June this year, with 86 percent coming from its construction businesses.

The firm'€™s revenues increased by 0.6 percent year-on-year (yoy) to Rp 3.21 trillion in the first half of this year with net profit of Rp 70 billion.

The firm is now waiting for a presidential regulation on the development of light rail transit (LRT) for the Jakarta area.

The company will also carry out a preemptive rights issue next month to reap Rp 2.75 trillion, of which around Rp 1.35 trillion will come from the investing public and Rp 1.4 trillion from the government through state capital injection.

Semen Indonesia president director Suparni said, meanwhile, that his firm aimed to book at least the same as last year and expected slight growth next year when revenues from infrastructure projects are reaped.

'€œIf infrastructure spending can be disbursed smoothly this year, we estimate to see 4 percent growth next year,'€ he said. The cement maker booked an 1.9 percent decrease in its revenues to Rp 12.64 trillion in the first half of this year from Rp 12.89 trillion in the same period last year.

State-Owned Enterprises Minister Rini Soemarno said previously that some of the government'€™s mega infrastructure projects were expected to kick off during the second half this year, including the LRT and a number of toll road projects.

State enterprises are set to spend Rp 165.75 trillion and US$471.8 million this year out of a total budget of Rp 318.5 trillion and $5.1 billion for the government'€™s three-year projects worth more than Rp 100 billion per project, according to the ministry'€™s data.

The state companies have spent 57.3 percent of the total target infrastructure expenditure this year.

The higher infrastructure spending in the second semester is expected to boost domestic consumption, resulting in higher economic growth during the period.

Some state enterprises, however, remain cautious amid the current unfavorable economic conditions and weakening rupiah.

The country booked 4.67 percent gross domestic product (GDP) growth in the second quarter and 4.7 percent growth in the first quarter, the lowest level for nearly six years.

The rupiah also depreciated to its lowest level since the 1998 Asian financial crisis to Rp 13,831 per US dollar recently.

National flag carrier Garuda Indonesia and state electricity firm PLN, which have big exposure to the dollar, remain cautious on the possible continued weakening of the currency.

'€œWe are always monitoring the rupiah exchange rate and will act very prudently,'€ said Garuda Indonesia president director Arif Wibowo.

Garuda previously stated that for every 100 points the rupiah strengthened against the US dollar, it earned as much as $12 million per year.

PLN, meanwhile, aims to hedge 20 percent of its total annual investment needed by the company.

'€œOur needed investment is around $7 billion each year and we want to hedge at least 20 percent of that,'€ said PLN finance director Sarwono Sudarto.

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