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WIKA Secures Deals Despite Rating Downgrade



The state-owned construction company PT Wijaya Karya (Persero), Tbk or WIKA proudly announced on Tuesday (11/12) that it has secured construction development contracts in 10 countries across Asia and Africa: Algeria, Malaysia, Myanmar, Niger, Nigeria, the Philippines, Senegal, Taiwan, Timor Leste and the United Arab Emirates. The projects include making 5,000 houses in Algeria, the Kinman Bridge in Taiwan, and the Presidential Palace in Niger. Large projects like these also led to the sending of workers overseas, with 963 supervisors and workers sent to the aforementioned countries, and a plan to send 3,500 people next year. On Sunday (9/12), the workers were sent-off in a ceremony attended by the State-Owned Enterprises (SOEs) Minister Rini Soemarno, Business Restructuring and Development Under Secretary of SOEs Ministry Aloysius Kiik Ro and WIKA President Commissioner Imam Santoso.

The contractor seems to maintain their ambitious contract dealings, making contracts nationally and internationally. As of November, the corporation has signed deals worth Rp34,2 trillion amid the booming growth in property and infrastructure construction in Indonesia. WIKA’s Corporate Secretary, Puspita Anggraeni, provided further details of the deals made, saying that the biggest deals were made in infrastructure and building construction, with the total value exceeding Rp26 trillion. “The majority of the new contracts are from the private sector at 52.5%, followed by state-owned companies at 26.33% and the rest are from government sectors,” Puspita said in an official statement, maintaining that the company has gained trust from the Indonesians’ economic private sector to be their construction agent.

One of the giants in the Indonesian construction market, the company was actually predicted to have a negative financial outlook by Fitch Ratings on December 10th 2018, as the company continued to invest on government’s projects. The EBITDA Net of the company increased twofold, as it is estimated that investments made by the company will exceed the Rp5 trillion mark by 2019. Fitch also stated that WIKA will actually book contracts “only” worth Rp45 trillion in 2018, much lower than the estimation of Rp58 trillion made by the company at the beginning of the year; however, weak showings from the financial report do not seem to hold back companies and governments to sign deals with WIKA, as the construction company races to secure deals in December to chase its estimated deal value. Financially, the news of large deals and investments being made proved fruitful for WIKA, as the value of its stock bounced back in the capital market, increasing from Rp1,135 per share from mid-November to Rp1,670 per share just this Wednesday (12/12).

Sources:

The Jakarta Post

CNBC Indonesia

CNN Indonesia


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