Construction business supports JSMR performance

JAKARTA. PT Jasa Marga Tbk (JSMR) recorded positive performance during the last year. Along 2016, the revenues of the state owned toll road company grew by 69% to Rp 16.6 trillion compared with 2015.

The toll road segment and other business segments contributed as much as Rp 8 trillion of the total revenues. Meanwhile, JSMR revenues from construction segment sharply increased from Rp 2.2 trillion in 2015 to Rp 7.8 trillion in 2016. This number contributes to 47% of the total company’s revenues.

The net profits of JSMR also grew by 29% on year-on-year (yoy) basis throughout 2016 to Rp 1.89 trillion. “(Our net profits) could grow by 29% with the bottom line performance and optimum cost control,” said JSMR Financial Director Anggiasari Hindratmo, Wednesday (8/2).

Nevertheless, during the same period, JSMR’s expense also increased by 107% from Rp 5.7 trillion to Rp 11.8 trillion.

Expansions

The management of JSMR plans to continuously invest in some major cities in Indonesia. JSMR has prepared some corporate actions to optimally raise funds to support the expansion.

Understandably, this issuer is targeting to increase the assets to Rp 113 trillion by 2019. To date, JSMR’s assets have amounted to Rp 55 trillion.

As a part of the corporate actions, JSMR will monetize one of its assets, namely Western Jakarta Ring Road One (JLB) that has about RP 180.6 billion of assets. However, JSMR management will recalculate the asset valuation. JSMR will also monetize another asset, namely Trans Marga Jateng (TMJ) worth Rp 5.6 trillion.

Aside of asset monetization, asset securitization may be another option for JMSR. However, Anggiasari did not say much about the securitization. “Our consultants are still discussing the (securitization) scheme with OJK (Financial Service Authority or FSA),” Anggiasari said.

Furthermore, JSMR is also planning to raise funds by offering continuous bonds.

Analyst at Binaartha Parama Sekuritas Reza Priyambada said, the improvement of JSMR’s performance is normal, thanks to many factors, such as the increases in the toll road traffic and tariff.

Let alone, the completion of some toll road projects will generate additional revenues for JSMR. Nonetheless, the revenues rise may be followed by the increases in the company’s expenses.

He recommends ‘buy’ for JSMR’s share, with the price target of Rp 4,700 per a share. On Wednesday (8/2), the price of a JSMR’s share increased by 3.55% to Rp 4,380.
(Muhammad Farid/Translator)