JAKARTA. State-owned construction company PT Wijaya Karya (WIKA) plans to quadruple its capital expenditure (capex) to a maximum of Rp 4.4 trillion (US$338.8 million) this year from only Rp 1.05 trillion last year thanks to wider financial room provided by a lower dividend payout ratio this year.
WIKA finance director Adji Firmantoro said after an annual shareholders meeting on Wednesday that his firm would upsize its capex to between Rp 1.7 trillion and Rp 4.4 trillion this year after paying out less in dividends.
“Shareholders have agreed to slash the dividend payout ratio from 30 percent last year to 20 percent this year,” he said.
WIKA, which is 65.05 percent owned by the government, is slated to pay around Rp 123.04 billion, or 20 percent of its 2014 net profit of Rp 615.18 billion, to shareholders this year.
The retained net profit of around Rp 492.14 billion would be used to finance part of the company’s capex, Adji said.
The company would also use leftover funds from a previous medium-term note issuance, remaining funds from an initial public offering (IPO) of WIKA Beton and loan facilities, he went on.
WIKA issued two- to three-year medium term notes totaling Rp 800 billion late last year, with an interest rate of 9.8 percent per annum.
In addition, the firm’s subsidiary, WIKA Beton, reaped Rp 1.2 trillion from its debut on the Indonesia Stock Exchange (IDX) in April last year.
Of the Rp 1.2 trillion, around Rp 274.95 billion has been used to acquire a 70 percent stake in PT Citra Lautan Teduh (CLT), which manufactures pretensioned spun concrete piles.
WIKA’s cash and cash equivalent stood at Rp 2.3 trillion last year, according to the firm’s annual report.
“We have also been trying to maintain our debt-to-equity ratio (DER) at a good level to provide us enough space for external funds,” Adji said, adding that WIKA’s DER currently stood at 2.6.
The firm’s total liabilities hit Rp 10.9 trillion last year, the company’s annual report has shown.
Adji said that most of the allotted Rp 4.4 trillion capex would be used to finance a number of infrastructure projects, including portable water, port and power plant projects.
“Power plant projects will likely require the largest portion of the capex,” he said, adding that most of WIKA’s power plants would aim to support the government’s ambition to attain 35,000 additional megawatts (MW).
WIKA corporate secretary Suradi said previously that among WIKA’s expected power plant construction contracts this year were a 2x50 MW power plant in East Kalimantan and a 2x25 MW power plant in South Sumatra.
Besides developing its business in energy-related sectors, WIKA also aims to boost its property business by carrying out an IPO for its subsidiary WIKA Realty.
“We aim to carry out the IPO in October or November at the latest,” WIKA president director Bintang Perbowo told reporters.
Adji said that his firm planned to release 30 percent of WIKA Realty’s stake to the public during the planned IPO and aimed to reap around Rp 1 trillion in fresh funds.
The company also plans to expand its international markets to the Philippines and maintain its grip in Algeria, Malaysia, Myanmar and Timor Leste.
WIKA is now in the process of proposing between Rp 5 trillion and Rp 6 trillion in state capital injection for next year, Adji said. (Khoirul Amin)
