Construction SOEs: WIKA increases new contracts
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - BUMN karya: WIKA pertebal kontrak baru
31 May 2023
By: Nurhansa Mikrefin
Jakarta - Amid the effort to restructure their bank debt, PT Wijaya Karya (Persero) Tbk (WIKA) secured a new contract value of Rp8.76 trillion as of April 2023.
That realisation is 24.33% of the new contract target in 2023 that is set to reach Rp36 trillion.
Wijaya Karya Corporate Secretary Mahendra Vijaya said that the engineering, procurement, construction, and commissioning (EPCC) segment contributed 42.9% to the total of new contracts. Meanwhile, the industry segment contributed 30.8%, the infrastructure and building segment contributed 21.3%, and the property segment contributed the remaining total.
There are several projects in WIKA’s new contract list, such as East Java Refrigerated LPG Project Phase II and Madukoro Arterial Flyover. Besides that, there are other new contracts in the parent company and the subsidiaries.
“In terms of employers, most projects obtained by WIKA came from the government and state-owned enterprises (SOEs) through the monthly progress payment scheme,” Mahendra said in his written statement on Tuesday (30/5).
Furthermore, he said that WIKA recently completed East Java Refrigerated LPG Terminal I or LPG Tuban Phase I in December 2022. Then, WIKA was appointed by Pertamina Energy Terminal (PET) to build LPG Tuban Phase II. The contract value of LPG Tuban Phase II is Rp3.47 trillion, and it implements the monthly payment mechanism.
WIKA is targeting their new contracts to reach around Rp34 trillion to Rp36 trillion. That amount only increased by Rp2.65 trillion at most from the realisation in 2022.
In another development, PT Pemeringkat Efek Indonesia or Pefindo lowered the rating of Continuing Bonds I, II, III and Continuing Sukuk Mudharabah I, II, III from idA to idBBB. Pefindo also revised the outlook of WIKA’s debt from stable to negative.
“The negative outlook reflects our perspective towards WIKA’s refinancing risk that is increasing due to the more limited financial stability, which was triggered by the weaker financial profile and the negative sentiment of the market towards the construction sector.”
