Speculations on Holcim Indonesia
Third largest cement producer Holcim Indonesia (SMCB) booked net loss of Rp539.3 billion in the first half ended June 30, 2018, expanded by 23.7% from the corresponding period last year. That means Holcim posted net loss of Rp207 billion in the second quarter, dropped significantly from Rp332.4 billion in the first quarter.
Bright Spot of the Economy: Tourism
Indonesia welcomed 1.54 million visits of foreign tourists in July, an increase of 12.1% year-on-year. Earthquakes in Lombok, West Nusa Tenggara province might make this year’s target out of reach, but data from the Central Bureau of Statistics (BPS) provide the country with some bright spots.
Anhui Conch Gains More, Forcing Consolidation in Cement
Unlike cement producers in Indonesia, Anhui Conch, one of the world’s largest cement producers, booked net profit of RMB12.96 billion for the first half ended June 30, 2018, jumped by 92.38% from the corresponding period last year. Sales revenues also soared by 43.36% to RMB45.74 billion in the period.
Revisiting Krakatau Steel
State-owned steel manufacturer Krakatau Steel (KRAS) booked net loss of US$16.01 million in the first half, dropped significantly from US$56.7 million in the corresponding period last year. Krakatau Steel actually reported 35% growth in sales revenues to US$854.3 million, but gross profit increased by 7.7% only to US$100.39 million.
AirAsia Indonesia & Property Acquisition
PT Indonesia AirAsia, subsidiary of PT AirAsia Indonesia Tbk (CMPP), has signed conditional sale and purchase agreement related to acquisition of Red House, a property over 12,063 sqm of land located at Batu Ceper, Tangerang, Banten province for Rp459 billion. The transaction is interesting for various reasons.
Improved Mass Transportation Outlook
It’s not perfect yet, but Indonesia has finally operated its first modern mass transportation, the light -rail transit (LRT) in Palembang, South Sumatra province. VP Jusuf Kalla used the LRT from airport to Jakabaring sports city in Palembang, Sunday (Aug 26). In the meantime, the greater Jakarta LRT might eventually be extended to Bogor city center in West Java.
Jokowi’s State Capitalism: 2019 Budget (1)
President Joko ‘Jokowi’ Widodo shows his consistency in accelerating infrastructure development with Rp420.5 trillion of budget for infrastructure next year, an increase of 2.46% from this year. Budget for viability gap fund (VGF) for infrastructure projects, meanwhile, jumped by 50% to Rp4.5 trillion.
More Promising Cement Data in July, but…
Domestic cement sales volume reached 6.34 million tons last month, an increase of 12.6% year-on-year. PT Semen Indonesia Tbk (SMGR), the market leader, also reported 11.4% growth year-on-year in the month. President Joko ‘Jokowi’ Widodo’s decision to expand 2019 Budget for Infrastructure, including public housing, might prevent deeper correction of margins.
The Collapse of Electronic Solution
Indonesian Court had on August 16, 2018 granted the Suspension and Debt Payment Obligations (PKPU) Petition filed by Bank Resona Perdana against PT Sumber Electrindo Makmur, operator of Electronic Solutions outlet. Under PKPU, PT Sumber is given a temporary moratorium of 45 days, which can be extended to a fixed moratorium not exceeding 270 days, during which period a composition plan will have to be submitted for approval by PT Sumber’s creditors.
Connectivity Report: Sumatra
Sumatra is the second most populous island in Indonesia, home to nearly 60 million people. Improved connectivity should unlock economic potentials in the island, which will likely be started in North Sumatra, South Sumatra, and Lampung. North Sumatra, the most populous province in the island, is set to grow faster than other provinces.