Wika Gedung, listed under the ticker symbol WEGE, has released 2.87 billion new shares, equal to 30 percent of issued and paid up capital, to the public.

With an IPO share price of Rp 290 (US$0.02) per share, Wika Gedung received Rp 832.8 billion in proceeds. About 70 percent of the proceeds will be used as capital expenditure, while the rest will be used for working capital.

“Our initial plan was to release 40 percent, but taking into account market conditions, we have decided for 30 percent. In the next two years, we will not release any new shares,” Wika Gedung’s human capital and investment development director, Nur Al Fatah, said recently.

Wika Gedung’s shares were oversubscribed by 216 percent during the book building period, indicating investor’s interest in the shares. At its trading debut, shares increased by 3.45 percent to Rp 300 per share.

“We believe that the financial performance of Wika Gedung will not drop in the future as it has already received at least Rp 21 trillion worth of contracts from Wijaya Karya Group for the next few years,” Wika Group finance director Steve Kosasih said.

Wika Gedung booked Rp 6.2 trillion in new contracts as of October this year, with its total order book reaching Rp 11.8 trillion. Some of the projects include Arandra Residence apartments in Jakarta, Pullman Mandalika Hotel and Resort in Lombok and Grand Ostello Jatinangor Apartments.

Going forward, the company plans to further increase its order book to Rp 16 trillion next year, which consists of Rp 8 trillion of new contracts and Rp 8 trillion from carryover contracts.

As much as 60 percent of its new contracts in 2018 will come from the government and state-owned enterprises, whereas 40 percent will come from the private sector, the company said.

Some of the government projects include low-cost housing and airports. Private sector projects will come from existing clients.

The firm is upbeat that its business will grow next year considering that it has received a number of contracts. It forecast its full year net profit at Rp 390 billion in 2018.

“We are targeting our net profit at Rp 390 billion, or at least grow 30 percent more compared to 2017. Our projection this year is Rp 286 billion,” Wika Gedung president director Nariman Prasetyo said. Wika Gedung is Wijaya Karya’s second subsidiary to go public after Wika Beton listed its shares on the IDX back in 2014.

After Wika Gedung, Wijaya Karya Group will support its other subsidiary Wijaya Karya Realty to go public next year, Steve said.

“We will see Wika Realty’s achievements by year-end. We hope that it can go public in the first half of next year,” he said.

He expected that proceeds from the IPO of Wika Realty could exceed Rp 1 trillion, much larger than funds received by Wika Gedung.

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