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Adhi Karya has only realized 18% of its new contract target

12 July 2019 04:14

JAKARTA. Despite the fact that in semester I-2019, PT Adhi Karya Tbk (ADHI) has obtained Rp. 5.4 trillion worth of new contract, but that number is only around 18% of ADHI's target this year of Rp. 30 trillion. However, analysts consider that ADHI shares still have attractive prospects.

MNC Sekuritas analyst, Muhammad Rudy, said that the small realization of contracts cannot be separated from the unstable condition of the government. As a state-owned company, it is only natural that the realization of ADHI's work will depend on the direction of policy and development from the government.

The only potential that may be obtained by the company is the discourse of moving the capital city. "The potential value is Rp 300 trillion. But the realization is still far in the future, "Rudy said Thursday (11/7).

Rudy said the challenge for construction companies like ADHI is to maintain the company's cash conditions. This is because so far, construction companies have mostly obtained contract-based projects. Practically, the money for the company can only be obtained when the project has been completed.

According to Rudy, one of the things that ADHI can do is to take advantage of its small debt to equity ratio (DER). Rudy noted that ADHI's DER was still in the range of 1.32x in Q1 2019. With its DER position, ADHI can utilize banking facilities because to take loans from banks, a company's DER cannot exceed 2.5x, "said Rudy. In addition to loans, Rudy said divestment and business diversification could be a strategy for ADHI. (AM/AR)

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