10. Waskita Karya
Category: 50 Best Companies 2016 By : Ulisari Eslita Read : 39079 Date : Friday, August 12, 2016 - 07:25:34


Toto Santiko Budi for Forbes Indonesia

Making the right decision at the right time is essential in running a business. Three years ago, Waskita Karya was just another state-owned construction company. “We are one of the largest construction companies in the country, but still, we’re far behind Wijaya Karya,” says Muhammad Choliq, president director of PT Waskita Karya.

Therefore, to grow the business bigger and better, by the end of 2013, Waskita Karya decided to change its vision and add four business lines, namely, toll road developer (PT Waskita Toll Road), precast concrete manufacturer (PT Waskita Beton Precast), property developer (PT Waskita Karya Realty) and energy producer (PT Waskita Sangir Energi). “The decision we made was like a blessing in disguise, since our decision is perfectly in line with President Jokowi’s vision: develop more infrastructure in the country, particularly toll roads,” says Choliq.

The strategy is paying off: Waskita became the biggest state-owned construction company by market cap last year. It successfully doubled its net income, from Rp 511 billion to Rp 1.04 trillion by the end of 2015. This year, Waskita has another ambitious target: to double its net profit to Rp 2 trillion by year-end. Is it possible? “About three-quarters of the target will be attained from our regular business, while the rest will come from selling off subsidiaries,” says Choliq.         

Considering the first quarter realization, the target seems viable. During the first three months, Waskita has booked Rp 3 trillion of revenue, up two times, year on year. Throughout the first half of 2016, Waskita has achieved new contracts amounting to Rp 40 trillion. It surpassed the company’s first-half target of Rp 20 trillion. “The additional second quarter contracts were mainly contributed by the LRT project in Palembang and several toll road projects in Jakarta and Java,” says Leonardo Henry Gavaza, an analyst at Bahana Securities, in his recent research.

Starting 2014, Waskita took on toll road projects, starting with the acquisition of the Pejagan-Pemalang toll road for Rp 300 billion from the MNC group. Currently, Waskita owns toll road concession, stretching over hundreds of kilo-meters, which requires at least Rp 16 trillion of investment. To fund the projects, the company had set a few goals. First, it plans to sell 40% ownership of Waskita Beton Precast for at least Rp 4 trillion through an IPO, slated for this month. Second, it will divest 40% ownership of its subsidiary, Waskita Toll Road (WTR) for about Rp 4.5 trillion through a private placement. “Several state-owned investment companies are interested in acquiring WTR. Therefore, we believe the project sustainability will obtain greater clarity ahead with solid fund inflows,” says Leonardo.   



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