JAKARTA (TheInsiderStories) – The Indonesian Government aims to collect Rp42.8 trillion (US$3.2 billion) in dividends from 118 state-owned enterprises (SOEs) in 2018. Government also expects SOEs to book Rp158.8 trillion (US$11.9 billion) net profit this year.
Imam Apriyanto Putro, the SOE Minister’s Secretary, explained that this figure is 6.6 percent higher than the target in this year’s State budget. Of the proceeds, Rp26.3 trillion will come from the 26 SOEs public companies listed on the bourse. The remaining Rp16.3 trillion will come from 45 non-listed SOEs, along with Rp210 billion from SOEs in which the government holds a minority share (9 to 49 percent).
“In the first half (H1) of 2017, 118 state-owned companies collected Rp32 trillion in dividends and Rp97 trillion in taxes, making a combined tax and dividend contribution of Rp129 trillion. We also consider each company’s ability to fund its investment and business sustainability. We don’t want a dividend payout to burden any company,” he commented at the meeting with Parliament on Monday (18/9).
In term of its tax contribution, the SOEs have contributed Rp149 trillion in 2013, projected to rise to Rp203 trillion in 2015-2016. As for dividends, SOE paid out Rp34 trillion in 2013, rising to Rp40 trillion in 2015-2016.
Minister of Finance Sri Mulyani Indrawati described that the dividend payment must be generated from healthy State-Owned Enterprises (SOEs).
“We see that the purposes of SOEs are not only to earn profit, but also to have development vision and mission that we must maintain. The Trans Sumatera highway has both the economic equality and Indonesia’s infrastructure efficiency. The highway reduces the cost of doing business and gives multiplier impact to the economy. One-price Oil Fuel implementation by PT Pertamina and construction of 35,000 MW by PLN,” explained the Minister.
Azam Azman, Vice Chairman of Commission VI House of Representatives, who is responsible for SOE oversight, said that they will pay careful consideration to each government dividend target. Dividend payouts, according to him, cannot be increased automatically every time because of different conditions of each SOE.
“SOE needs reserve fund to develop and ensure their business will survive. Thus, a dividend payout should not become a burden for SOE. We will discuss further about the issue of a ratio, especially for SOEs that have less capability to pay dividends. There will be an adjustment when it is decided whether it should be increased or cut,” he said.
He illustrated by pointing out how in 2005, the dividend payout ratio reached 30.26 percent, rising to 39 percent in 2006 and again to 37 percent in 2007 until 2008, before settling to 30 percent in 2009. Average SOE dividend payout ratio over the entire five-year period is 34.65 percent, higher than the average dividend payout ratio for non-SOEs belonging to LQ-45 on the bourse (24.65 percent).
Writing by Yosi Winosa, Email: email@example.com