PT PP Tbk (IDX: PTPP) ready to spends Rp7.5 trillion (US$535.71 million) next year - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian developer, PT PP Tbk (IDX: PTPP) ready to spends Rp7.5 trillion (US$535.71 million) next year, said the management on Tuesday (11/26). The amount higher than this year target Rp6.5 trillion.

The CEO of PTPP, Lukman Hidayat, elaborated the capital expenditure will be derived from retained earning, dividends from the subsidiaries, bank loans, and equity. The company also looking bond market to fulfill the needs in 2020, but its still undecided on the time and value.

He continued, the investment will be used to finance several projects has been in the pipeline for next year. The constructor also expect to win several tenders for next year, so it will support the next year’ contract of Rp45 trillion.

Furthermore, the company claimed that it will be hassle to achieve double digit growth for revenue and net profit. Beside from organic reveneus, said finance director, Agus Purbianto, PTPP also plans to divest several toll projects to increase the income. He stated, the funds from the divestment will be used to support investment in recurring income’ assets.

The recurring income assets are derived from water supply system projects in Bekasi and Tangerang. Beside, the developer also wants to strengthen recurring income’ businesses from toll and renewable energy.

“PTPP plans to develop biomass energy project for East Indonesia,” he adds.

In the third quarter (3Q) of 2019, PTPP booked a net profit Rp544.5 billion, lower that 3Q of 2018 worth of Rp874.7 billion. And the revenues Rp16.06 trillion in the same period.

This year, PTPP has sought fresh funds from bond market by issuing local notes Rp1.25 trillion from last year Rp1.5 trillion. It said, the funds will be used to pay off the 2015 bond issuance will mature on Feb. 24, 2020 and the rest will be used for infrastructure project.

Currently, the contractor managed several projects such as two steam power plants in East Nusa Tenggara and North Sulawesi with total costs Rp8 trillion. The capacity of each steam power plant is 2×50 megawatts (MW).

The first steam power plant was carried out on an area of 30 hectares in West Kupang, East Nusa Tenggara. The second steam power plant was built on 32 hectares of land in the Bolaang Mongondow, North Sulawesi.

The construction firm was optimistic to complete the first projects in West Kupang in three years and in Bolaang Mongondow in 39 months. Its also expected the two steam power plants will be ready to operate in 2022, so it will be able to electrify several villages and sub-districts in the East Nusa Tenggara and North Sulawesi regions.

PTPP also become a contractor for ferro nickel smelter construction located in Kolaka, Southeast Sulawesi with a total investment of Rp14.5 trillion. The contractor has signed a contract to build a smelter with PT Ceria Nugraha Indotama as an investor in April 2019.

Abdul Haris Tatang, a director at the company, stated that  the company will be cooperate with Chinese’ ENFI consortium to construct the smelter project. The management said that the project to build the fero nickel smelter will require an investment of Rp4 trillion in the first phase.

The plant has a total capacity of 4×72 MVA and targeting to operate in 2021. The production is projected to reach 229,000 tons of ferro nickel annually at a rate of 22 percent – 24 percent.

The company also planned to sell part of its ownership in three toll road concessions, namely Pandaan – Malang toll road in East Java (35 percent), Kualanamu – Tebing Tinggi toll road (15 percent) and Kuala Tanjung Port (25 percent) in North Sumatera.

The developer expects to raise around Rp500 billion from the equity sales. In addition, the company also eyes construction projects in the Philippines and port development project in Malaysia worth of Rp2 trillion, after getting the project in Vietnam with worth of Rp500 billion.

US$1: Rp14,000

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