Adhi hopes to regain monorail claim

A reliable source familiar with the matter said Adhi Karya management plans to settle the claim to PT Jakarta Monorail.

How to do that? The source said Adhi has been informed that the claim on monorail project would be possibly paid by the local government of Jakarta province, using fund of its budget spending.

“The problem is Adhi Karya would indirectly receive the claim. The claim is firstly obtained by PT Jakarta Monorail. Adhi Karya holds 30.1% shares in Jakarta Monorail,” the source said.

What if Jakarta Monorail won’t pay the claim to Adhi Karya? The source said Adhi Karya, using a legal opinion from Attorney General, aims to seize heavy equipments used to build monorail way as guarantee.

“Once Adhi Karya obtained the claim from PT Jakarta Monorail, the state-owned would release the guarantee,” the source said.

What is the impact?

If Adhi could settle the claim, Rp120 billion of provision on monorail project would become an extraordinary income, potentially a boost for Adhi Karya’s earning.

In a equity valuation report published by Indonesian rating company PT Pemeringkat Efek Indonesia (Pefindo) on July 2, Adhi has done any options to regain payment from the projects owner.

“Based on the latest development, We believe Adhi Karya’s management is able to regain its claims, especially in monorail and other government projects,” the report said.

Pefindo estimates Adhi would gradually settle the claims this year.

“We believe Adhi gradually could regain the claim in 2010. In return, the company’s net profit margin would improve above 3.5% in 2012,” the report said.

During the first 3 months this year, Adhi booked a 28% lower sales than the same period last year of Rp1.36 trillion.

The sales growth from this quarter reached 12.4% of the company’s full year of Rp7.7 trillion.

In 2010, Adhi plans to spend Rp85 billion of capital expenditure. Around Rp50 billion will be invested in joint venture companies and the remaining will be allocated for fixed assets.

The company’s revenue is estimated to reach Rp8.5 trillion this year, a 9,6% growth compared to the previous year.

Pefindo believes that Adhi Karya could post high net profit due it has written-0ff the claims from some projects. Pefindo estimates Adhi could reach Rp133 billion of net profit this year.