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Yearender 2021: A year of ailing SOEs
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No high-flyer: A Garuda Indonesia Boeing 373-800 NG aircraft is parked at Soekarno-Hatta International Airport in Tangerang, Banten, on Oct. 12, 2020. (AFP/Adek Berry)
T
he past year proved to be another challenging one for Indonesia’s public sector as many state-owned enterprises (SOEs) found themselves under growing financial pressure.
With travel restrictions dealing a devastating blow to the aviation industry, national flag carrier Garuda Indonesia defaulted on coupon payments for its sukuk in June. That sparked efforts to restructure some US$9.8 billion (Rp 140.7 trillion) of the airline’s debt.
The largest publicly listed, state-owned construction company by assets, PT Waskita Karya, has been busy restructuring some Rp 89.73 trillion in debt reported in June after sustaining Rp 7 trillion in net losses in 2020.
Other companies restructuring are state-owned plantation holding firm PTPN III, which reported more than Rp 43 trillion in debt earlier this year, while state-owned steelmaker PT Krakatau Steel was recently under scrutiny for struggling to make progress on its $2 billion debt restructuring plan.
Two SOEs dominating the energy sector, PLN and Pertamina, each carry a debt load to the tune of around Rp 500 trillion, though large revenue makes this more manageable.
By contrast, SOEs in banking and telecommunications were among the best performers this year, reporting healthy profits.
Economists told The Jakarta Post that some of the ailing SOEs were feeling the overall impact the prolonged pandemic has been having on businesses as a whole. However, mismanagement and unhelpful government policies – issues that existed long before the pandemic – are thought to have compounded the financial strain in many cases.
