Infrastructure Outlook Improved, Investments? (2)
Eight small investors have recently applied for license to build hotels in Kulon Progo, Yogyakarta. They are among those anticipating commercial operation of the New Yogyakarta International Airport, whose development progressed well with completion of land acquisition this week. Dafam Hotel Group, meanwhile, has kicked off construction of an airport hotel with 200 rooms nearby.
Consolidation of Cement Industry
Cement industry has increasingly become a very competitive business, which should benefit public housing and property development. In the past three years, domestic processing capacity grew 24.5 million tons, of which 15 million tons were added by new entrants such as Semen Merah Putih, Anhui Conch, Siam Cement, and Panasia.
Infrastructure Outlook Improved, Investments?
Adani Ports plans to build container port in Cilegon, Banten province in cooperation with Indonesian major business group. The 2 million TEUs port requires investment is only one of infrastructure projects targeted by Indian companies. Others are targeting airports. GVK, for example, expects to enter Kualanamu (North Sumatra), Balikpapan (East Kalimantan), and Lombok (West Nusa Tenggara), while GMR Infrastructure is interested in Raden Inten (Lampung) and Labuan Bajo (Flores, East Nusa Tenggara).
Jokowi’s State Capitalism (2)
State-owned railway operator PT Kereta Api Indonesia (KAI) booked net profit of Rp1.72 trillion last year, surged by 67% from 2017 thanks to higher sales revenues and improved margins. The Company’s assets also jumped by 33% to Rp33.5 trillion, while equity moved closer to US$1 billion.
Semen Indonesia: FY17 Results & Outlook
PT Semen Indonesia (SMGR) Tbk booked net profit of Rp2 trillion last year, collapsed 55.4% from 2016 due to squeezed margins from intense competition, higher input costs and finance costs. With earning per share of Rp340, the current price (Rp10,525) looks very expensive. What to expect going forward?
From Infrastructure to Investment & Human Development
President Joko ‘Jokowi’ Widodo led a limited cabinet meeting Thursday (Mar 15) regarding the government’s programs to improve human resources quality. Earlier that day, the President also requested leaders of national banks to boost the so-called ‘Student Loan’. These came early than talks in the government to shift more attention from infrastructure to investments in human resources development in the second term of Jokowi (if reelected).
Jokowi’s Challenge: Trade Diplomacy
Palm oil is the largest export commodity for Indonesia. It has been under substantial pressures in the past few months, mainly due to trade barriers imposed by importing countries, including India, and risk perception related to the future of biofuel in Europe. Low price of palm oil might have contributed to three consecutive months of trade deficit to the country.
Food Security (7): Sugar
The government has pledged to provide two important supports for PT Muria Sumba Manis (MSM), member of Djarum Group, which develops integrated sugar plantation in Sumba Timur regency, East Nusa Tenggara province. State port management company Pelindo III plans to spend over US$20 million for the development of Waingapu port, which later on can be used by MSM.
Trans-Sumatra Toll Program So Far…
After two years of massive construction, development of four major sections of trans-Sumatra toll road program moves closer to completion. The last section (Section I) of Medan-Binjai toll road in North Sumatra reached 58.85% as of March 2nd, 2018. Land acquisition is still an issue in this project, but with 74.3% of land in hands, this toll road could be in full commercial operation this year.
Cash-Flow of State Construction Firms Improved, but Not Enough
With the exception of Adhi Karya (ADHI), other state-owned construction firms reported improvements in cash-flow last year. They also contributed more to the State in the form of corporate income tax and final tax. Their balance sheet, however, needs to be addressed seriously going forward.