State-owned construction firm Nindya Karya plans to launch an initial public offering (IPO) in 2018, following the success of IPO for state-owned construction Waskita Karya (WSKT). Nindya Karya’s earnings have improved after its restructuring and revitalization programs. Its business involves general contracting, engineering-procurement-construction (EPC) and realty.
State-owned asset management firm Perusahaan Pengelola Aset (PPA) injected Rp500 billion worth of capital into Nindya Karya in 2012, obtaining 99% of the company’s shares. Through this capital injection the construction company was able to complete its restructuring process successfully.
Boedi Djatmiko, general manager Investment at PPA, said it remains to be seen whether the market conditions were conducive enough to go ahead with the IPO on the Indonesia Stock Exchange (IDX). Still, 2018 seems a better option than 2019 because in 2019 Indonesia will see another round of parliamentary and presidential elections that will surely trigger uncertainties (hence high volatility) in the market.
Teuku Muhyil Rgina, Finance Director of Nindya Karya, said that the Company had successfully posted almost 30% compound average growth rate (CAGR) in the past five years. In 2012, Nindya Karya booked revenues of Rp2 trillion. In 2016, its revenues was Rp4.66 trillion with a net profit of Rp180 billion. Compared to 2015, its net profit jumped 162.8%.
New contracts reached Rp7 trillion last year and are expected to reach Rp10 trillion this year. Last year, new contracts from building segment reached Rp2.71 trillion, bridge and road contributed Rp788.89 billion, port Rp1.52 trillion, irrigation and dams Rp1.48 trillion, others Rp172 billion, while joint venture contributed Rp680.79 billion.
Nindya Karya already tested market confidence by issuing Rp300 billion worth of medium term notes (three years/10.35% coupon) in 2017. Per Dec 2016, the Company’s assets reached Rp3.75 trillion, while liability amounted to Rp2.98 trillion. Its equity was Rp768.45 billion.
Meanwhile, PT Campina Ice Cream Industry, with its famous brand Campina, plans to offer 885 million shares, representing 15% of its total issued and paid-up capital, through the initial public offering (IPO). This portion is half of its initial plan of 30%. This IPO is riding on projected improvement in the country’s household consumption and growing middle-income group.
The book building or preliminary offering starts today and will last to Thursday this week (Nov. 24) and the offering is scheduled for Dec. 8, 11, 12 this year. Listing at the stock exchange is set for Dec 19, 2017. PT Shinhan Sekuritas Indonesia acts as underwriter for this IPO.
Campina has yet to set the IPO price and its target of IPO fund. It said on the prospectus published this morning that it will use Rp260 billion IPO fund for paying principal debt and the rest is for boosting capital structure.
Campina booked a net profit of Rp9.98 billion only in first half (H1) of 2017, dropped 58.2% from Rp23.9 billion in the same period last year. Net sales increased 10.6% to Rp480.8 billion but operating profit fell 30% to Rp34.7 billion. The Company’s assets reached Rp1.09 trillion, while liability amounted Rp527.3 billion. Its equity was Rp564.56 billion.
In 2016, Campina booked net profit of Rp52.7 billion on net sales of Rp930.53 billion. As quoted by surabaya.tribunnews.com in February 2017, Campina sets target 10% growth of sales revenue by the end of this year.
Indonesia ice cream market might have been dominated by Walls (Unilever Indonesia) and Campina. Others such as Baskin Robbins (Trans Ice/Trans Corp) and Cold Stone Creamery (Mitra Adiperkasa/MAPI), however, have intensified the competition. Bear also in mind that new players, especially from the JV of Ezaki Glico Ltd (50%) and PT Mitrajaya Ekaprana (Wings Group) Glico-Wings (Japan-Indonesia) and Aice Ice Cream (Singapore), also target the same market.
As quoted by kontan.co.id in November, 2016, Brand Marketing Manager Glico-Wings, Nando Tampubolon said that ice cream market in Indonesia has been dominated by Walls for 70%, Campina 20%, while Diamond, Indoeskrim (Indofood), and smaller ice cream home industry players hold the rest.
DISCLAIMER: AUTHORS HAVE NO POSITION IN STOCKS MENTIONED
By Yohannes Obor & Isminarto Rahayu
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