JAKARTA. The growth of PT Waskita Karya Tbk's (WSKT) new contracts is predicted to stagnate this year. The company, Indonesia's largest state-owned construction firm, is currently facing several challenges ranging from delays in payments to project execution.
Mirae Asset Sekuritas Equity Research Analyst Joshua Michael said that delays in projects received by WSKT have lowered the company's potential to obtain new contracts. He estimates that the company's total new contract value this year only amounts to Rp 29.3 trillion.
"This is considering the insignificant growth of the Ministry of Public Works and Public Housing's road and bridge budget, and the amount of toll roads tendered that is relatively the same as last year," said Mr Michael in an official statement.
Mr Michael also assesses that WSKT needs to divest a third of its owned toll roads, which include five toll roads with majority ownerships and two with minority ownerships. This, according to Mr Michael, needs to be realised until the end of the year in order for the company to bag an additional net profit of Rp 2.1 trillion.
"In a relatively short time, it's not easy for WSKT to find buyers with suitable valuations," said Mr Michael. (KR/MS)