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Construction SOEs set high targets for new contracts in 2021
Crunched by contract and payment delays in 2020, revenue of construction companies in Indonesia is expected to rebound this year driven by state-funded infrastructure projects.
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Wijaya Karya signage is installed near a project in Jakarta.
(kontan.co.id/Daniel Prabowo)
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ndonesia’s top three state-owned construction firms have set high targets for new contracts this year, as they carry over delayed projects from last year, in pulling their finances out of the red.
Publicly listed PT Waskita Karya (WSKT), PT Wijaya Karya (WIKA) and PT Pembangunan Perumahan (PTPP) collectively aim to get Rp 96.22 trillion (US$6.6 billion) worth of new contracts in 2021, up 33.2 percent from the Rp 72.26 trillion realized last year, in undoing the plunge in their net profits in 2020, company executives have said separately.
“This year, I estimate the performance of each issuer will be better than 2020. But I think their performance will still not exceed their performance in 2019, which was the heyday of the construction sector,” Artha Sekuritas Indonesia analyst Dennies Christoper told The Jakarta Post in a text message on Monday.
Construction companies across Indonesia saw their finances plunge last year as mobility restrictions and the economic crunch compelled project issuers to delay projects, contracts and payments. Such companies expect to see better performances this year as restrictions are relaxed and as businesses reopen.
State-owned construction companies, in particular, saw their finances drop last year as the government redirected state funding to COVID-19 relief programs. However, the government has raised its infrastructure budget by 49 percent year-on-year (yoy) to Rp 414 trillion in 2021 in catching up with project deadlines.
Read also: COVID-19 crisis delays several infrastructure projects
Waskita, the largest among the three firms, saw its finances plunge the sharpest as it booked a net loss of Rp 7.38 trillion in 2020, reversing an Rp 938 billion net profit from the previous year, its latest financial report shows.
