JAKARTA (TheInsiderStories) – Indonesian companies trimmed the capital expenditures (CAPEX) due to slowing business during COVID-19 pandemic. The decisions will also give impact to expansion plans and the financial conditions in this year.
CEO of PT Angkasa Pura II (AP II) Muhammad Awaluddin announced, the state-owned port operator cut its CAPEX from Rp7.8 trillion to Rp1.4 trillion (US$520 million) caused of slow business. This year’ CAPEX was allocated to a number of multi-year airport development projects and to continue the design of terminal 4 of the Soekarno – Hatta International Airport, he adds.
“A number of multi-year development projects will continue to run this year, for an example the construction of commercial areas, offices and hotels, and the integrated building at Soekarno – Hatta Airport. The design of the terminal 4 design is also continued and is targeted to be complete by 2021 so that a groundbreaking can be carried out in January 2022,” said the CEO.
The state construction firm, PT Adhi Karya Tbk (IDX: ADHI), also sliced the CAPEX to Rp1.4 trillion from the initial planned Rp5.5 trillion, said the spokesman Parwanto Noegroho as quoted by Bisnis.com. He explained, that company now be focused solely on the purchase of fixed assets.
Similarly, other developer, PT Wijaya Karya Tbk (IDX: WIKA) also . would cut this year’ CAPEX, but has not yet determined the exact value, said the spokesman Mahendra Vijaya. Initially, the company targeted CAPEX worth of Rp11.5 trillion.
Finance Director of PT PP Tbk (IDX: PTPP), Agus Purbianto also said that his company would trims the CAPEX from Rp5.4 trillion to Rp3.6 trillion caused lot of the property development has been postponed.
Other construction firm, PT Waskita Karya Tbk (IDX: WSKT), said the finance director, Haris Gunawan will cut its CAPEX allocations for completion of toll roads worth of Rp16 trillion through its unit PT Waskita Toll Road. This year, the state-owned firm was allocated Rp19 trillion of CAPEX to build toll roads, ports, airports, and other projects.
Then CEO of PT Perusahaan Gas Negara Tbk (IDX: PGAS), Gigih Prakoso said, that the company had taken several initiatives to limit the negative impact of the sentiment of the spread of COVID-19 by cutting the CAPEX and operational expenditure (OPEX) costs, also rescheduling investment plans.
He admitted that the biggest impact of the COVID-19 deployment was the decline in gas demand amid global crude oil prices, which also dropped dramatically. This year, the company allocated CAPEX up to $700 million this year, which is 64 percent of it to be used in the upstream business and 36 percent in the downstream, midstream and supporting segments.
Publicly listed restaurant-chain, PT Fast Food Indonesia Tbk (IDX: FAST) also was forced to withhold expansion in this year due to the epidemic. Previously, the company planned to build 20 new outlets, five new KFC Boxes, and renovate around 150 restaurants CAPEX Rp 550 billion. The director Justinus Dalimin Juwono revealed, the company has also postponed plans to increase capital by rights issue program.
In the midst of the onslaught of COVIC-19, Fast Food is now trying to boost sales by selling online through online motorcycle taxi services, implementing take-home sales, home delivery, and drive thru. Recently the company has closed 97 outlets and lay off hundreds of employees.
One of the largest cement producer, PT Indocement Tunggal Prakarsa Tbk (IDX: INTP) stated that the declining demand for cement in the country has made the company put the brakes on CAPEX in this year from around Rp5 trillion to Rp3.5 trillion. According to the president director, Christian Kartawijaya, most of the funds will use to complete the construction project of its factory.
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