Toll Road Projects Update
State-owned company Waskita Karya (WSKT) generated Rp218 billion of revenues from toll roads last year, skyrocketed from Rp31.8 billion in 2015 following commercial operation of Section I and II of Pejagan-Pemalang toll road under the trans-Java toll road program. Revenues from toll road will grow further with the Company’s plan to start commercial operation of Section III and IV of Pejagan-Pemalang in June.
Q&A with Indoferro on Nickel Smelter
Nickel ended at US$10,900 per ton on LME last Friday (Mar 3) to represent almost 16% since the third week of January. Future of the commodity might be affected by export quota of low-grade nickel in Indonesia and further crackdown of mines in the Philippines in the supply side. Expansion of stainless steel by Tsingshan Group in Indonesia, on the other hand, might improve demand side of the commodity.
Djarum-Wings in Sugar Business
Indonesia’s consumption of sugar is around 6 million tons per annum, while domestic production is predicted around 2.7 million tons only. Jokowi-Kalla administration, obsessed by self-sufficiency in sugar by 2020, has encouraged more state companies and private business groups to invest in this sector. The self-sufficiency target might be out of reach, given the current circumstances, but deserved close monitoring.
The Bright Spots: Tourism Industry
King Salman and his delegation are still enjoying the island of Gods. Minister of tourism Arief Yahya believes the King has strong influence to boost visits from Middle East investors to the country. But, even if this might turn out to be overstated, Indonesia’s tourism industry started 2017 with great news already.
Acceleration of MRT Projects
High confidence in completing first phase of mass-rapid transit (MRT) triggered the government to push forward construction start of second phase and the new east-west corridor. This is not only a great news for construction companies, but construction materials and property/lifestyle businesses operating/planned along the routes.
Prince Alwaleed’s Investments in Indonesia
King Salman stays at Raffless Hotel during his visit in Jakarta this week. The hotel is said one of investments from Kingdom Holding Company, a conglomeration owned by Prince Alwaleed, nephew of the King. The delegation of 1,500-2,000 members from royal family will continue their Indonesian trip with five days of holidays in the resort island of Bali.
Infrastructure Journal No. 09/2016: Dam, Railway & Toll Roads
President Joko ‘Jokowi’ Widodo is determined to develop eastern part of Indonesia with acceleration of infrastructure projects. In East Nusa Tenggara, which has lots of potentials in tourism, fisheries, agriculture, and mining, for example, a total of 176 KM public road is being built, of which 48.19 KM has been completed, while 104 KM will be operational this year.
7 Eleven: Another Victim of Retail Competition
Hero Supermarket (HERO) booked net profit of Rp120.6 billion last year, an improvement compared to 2015 when it posted net loss of Rp144 billion. The profit, however, represents margin of 0.88% only. HERO has earlier been forced to leave smaller retail format Starmart, divesting some convenience stores to Wings Group. Ranch Market operator Supra Boga Lestari (RANC) has also given up convenience stores business under the Ministop brand name last year.
Aneka Tambang (ANTM): FY16 Results & Outlook
State miner Aneka Tambang (ANTM) booked net profit of Rp65 billion last year against loss of Rp1.44 trillion in 2015. The Company’s performance improved significantly in the fourth quarter, thanks to higher prices of nickel. Still, with earning per share of Rp3 only, the Company needs to report 10 times of last year’s profit this year to justify the current stock price.
FY16 Results & Outlook: LSIP & SIMP
PT London Sumatra Plantations (LSIP) Tbk, controllled by Salim Group, booked net profit of Rp594 billion last year, down 4.7% from 2015, despite 110% jump in the fourth quarter of 2016 due to rally in crude palm oil (CPO) prices. Shares of LSIP, however, have fallen almost 20% from its recent peak as investors were nervous about possible correction of CPO prices. They anticipate significantly higher output this year because El Nino impact has disappeared. Really?