Improved Outlook of Sumatra Island
Four months to the 2018 Asian Games, section III of Palembang-Indralaya toll road in South Sumatra moved closer to completion with construction progress of 98.6% by the fourth week of April. Section II has reached 60%, but as 100% of land for the project have been acquired, the 22-KM toll road will be in full commercial operation by third quarter.
Those Continue to Expand
PT Fast Food Indonesia Tbk (FAST), operator of Kentucky Fried Chicken (KFC) outlets, generated sales revenue of Rp1.33 trillion in the first quarter ended March 31, 2018, an increase of 10.7% from the corresponding period last year. The food chain was also more aggressive with 118% jump in investments. Also expanding in the country are Segafredo Zanetti, BreadTalk, Gogoprint, WeWork, etc.
Bright Spots of First Quarter: Gadgets
ICT retailer Erajaya Swasembada (ERAA) booked net profit of Rp205.4 billion in the first quarter of 2018, skyrocketed from Rp60.9 billion in the corresponding period of 2017, thanks to strong sales revenue growth and improved margins.
Improved Infrastructure Outlook
Seven sections of toll roads in Java and Sumatra, with combined length of 100 KM, are scheduled for commercial operation this month or early next month ahead of this year’s annual exodus for Lebaran holidays. The airport train service connecting Minangkabau international airport and Padang city center in West Sumatra is also expected to commence operation this month.
Bright Spot of the Economy: Tourism
Tourism continued to be the bright spot of the economy. The country welcomed 1.36 million visits by foreign tourists in March, an increase of nearly 29% year-on-year. Data from Central Bureau of Statistics suggested recovery of tourism industry in Bali Island, the single largest destination for foreign tourists.
SSIA’s Subang Industrial Estate
Infrastructure development in West Java, which includes new international Patimban port in Subang and new international Kertajati airport in Majalengka, has lifted prospect of new Subang Industrial Estate (SIE), which is developed by PT Suryacipta Swadaya (SCS), subsidiary of PT Surya Semesta Internusa (SSIA) Tbk.
Pressures Intensified at BAT International
Fourth-largest cigarette player PT Bentoel International Investama Tbk (RMBA), controlled by BAT International, reported net loss of Rp252.4 billion in the first quarter of 2018, skyrocketed from Rp69 billion in the corresponding period of 2017 as margins squeezed further due to competition and policy pressures.
Weak First Quarter for HM Sampoerna
HM Sampoerna (HMSP), the largest cigarette producer in Indonesia, booked net profit of Rp3.03 trillion in the first quarter ended March 31, 2018, down 7.9% from the corresponding period of 2017 as the company recorded only 2.5% growth of sales revenues to Rp23.14 trillion in the quarter.
Those Continue to Expand
SGX-listed company Clearbridge Health Limited has completed acquisition of PT Tirta Medika Jaya, a company providing renal care services in Indonesia. Through joint operation agreements with hospitals, PT Tirta Medika operates renal dialysis facilities co-located with the partnerhing hospitals.
Oil & Gas Journal
As oil price continues to rise, the Government of Indonesia faces a dilemma in deciding the direction of fuel subsidy policy. WTI for May delivery increased to US$68.38 per barrel on Friday last week (Apr 20), while crude oil Brent for June delivery rose to US$74.06 per barrel in London ICE Future Exchange.