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Indonesian builders' profits grew in Q1 but at slower pace
Publication Date : 30-04-2014
Indonesia's publicly listed builders posted slower growth in the first quarter of the year, compared to what they achieved in the same period last year, proving analysts’ projection of a possible slowdown in construction projects during the election year.
PT Pembangunan Perumahan (PP) recorded a 55.72-per cent increase in revenue to 2 trillion rupiah (US$173.18 million) from January to March, according to the company’s latest financial statement. In last year’s first quarter, the company booked an 80-per cent increase in revenue to 1.28 trillion rupiah.
The revenue growth has pushed up PP’s net profit by about 44 per cent year-on-year (y-o-y) to 61.4 billion rupiah in the first three months of 2014. Last year in the same quarter, PP’s net profit nearly doubled to 42.54 billion from the previous year.
PP president director Bambang Triwibowo said that the rise in revenue was driven by the 4.5-trillion rupiah worth of new contracts the company secured in the first quarter — with its construction, investment, precast and engineering, procurement and construction (EPC) business lines all contributing to the total revenue.
“Our total [outstanding] contracts in the first quarter amounted to 26.44 trillion rupiah, with 26.43 trillion rupiah in carryover contracts from last year,” Bambang said.
PP has set a revenue growth target of 40 per cent this year, which is expected to be supported by new contracts that it aims to secure this year.
Construction research center BCI Asia Indonesia previously estimated that the country’s construction sector might secure a total of 493 trillion rupiah in new contracts in 2014, up 14.7 per cent from year-ago level, with stronger demand for commercial buildings.
BCI Asia Indonesia Country Manager Agus Dinar, however, said that this year’s estimated annual growth actually slowed from last year, when the country booked a 39 -per cent increase in new contracts over the level in the previous year.
Agus cited Indonesia’s legislative and presidential elections, as well as the country’s not-so-strong macroeconomic conditions as the prime factors that would discourage aggressive growth in new contracts.
Another publicly listed state —owned construction firm, Waskita Karya, posted about 8 per cent year-on-year revenue increase from January to March. Waskita Karya’s net profit rose 24.5 per cent to 6.76 billion rupiah during the period, compared to the 5.43 billion rupiah it earned in the first three months of 2013.
The growths were far lower compared to the company’s performance in the first three months of last year, in which it booked an 18.7-per cent increase in revenue and a sixfold increase in net profit.
Waskita aims to post a 20.4-per cent profit increase this year.
Total Bangun Persada, on the other hand, saw its net profit slumped by nearly 34 per cent in the first quarter while its revenue dropped by 6.3 per cent.