PP Presisi PT Tbk (PPRE), the Indonesia's largest construction equipment rental company, would more aggressively in the next year. Subsidiary of PT PP Tbk (PTPP) is targeting revenues doubled in the year 2018 or increase almost 13 times more than 2016.
Benny Pidakso, Finance Director of PT PP Presisi, said the company is targeted income of Rp 4.9 trillion in 2018. Until the end of the year 2017, PPRE optimistic can earn revenue of Rp 2.3 trillion.
That means, there was a growth in revenues of 113.04%. "We are also targeting profit amounting to Rp 434-500 billion in 2018," said Benny while visiting the Office of CASH, Wednesday (20/12).
The main income comes from Civil Work. Then, the rest comes from Heavy Equipment Rental business. To reach that target, the PPRE keep chasing several new contracts.
The target, next year PPRE could get a contract worth Rp 16.5 trillion. Around Rp 9 trillion is the carry over contracts from the year 2017.
Business Expansion
PPRE will also be expanding the business to several new sectors such as the mining sector. In this sector, the company has obtained a contract worth Rp350 billion per year. The project is located in an area of Sumatra, with a period of five years.
Benny says, it has also signed a new contract with one of the mining companies with same value contract. Beside that, PPRE will also develop new business in the sectors of electrical mechanical, erector, transport and logistics.
Next year, the PPRE preparing the expansion capital of Rp 1.6 trillion. Capital Expenditures (capex) is slightly smaller than the capital expenditure Rp 1.8 trillion in the year 2017.
80% of the capex will be used for purchase of heavy equipment. Then, the remaining capital will be used for land acquisition and the company acquisitions.
To fund the expansion, PPRE will use funds from the Initial Public Offering (IPO) of Rp 700 billion. While the rest will come from banking loans.
Hans Kwee, Director of Investa Saran Mandiri, said, the Central Government is currently encouraging infrastructure development and, hence, companies engaged in the field of construction equipment and equipment supporting would have bright prospects.
But in the eyes of investors, the PPRE performance will be overshadowed the parent company. "As a subsidiary of STATE-OWNED ENTERPRISES, investors will always associate PPRE with parent company," he said.
Hans said, a new contract PT PP indeed pretty good. However, the market is still worrying about payment PT PP projects. But usually, cash flow PT PP it will improve toward the end of the year
Until the quarter III-2017, PPRE registered a revenue of Rp 930 billion. This revenue grow 271% year on year (yoy) compared to the same period last year that only collect revenue to Rp 251 billion.
The largest revenue contribution comes from civil work and foundation work amounting to 61% of total income, heavy equipment rental business contributed about 16%, ready mix of 14%, and form work amounting to 9%.
PPRE profit to the quarter III-2017 also climbed significantly of 234% yoy. Per September 2016, PPRE profit only Rp 27 billion. But, in the quarter III this year, profit reached Rp 89 billion. Meanwhile, the company's EBITDA reached Rp 322 billion, up 246% yoy.
Positive performance PPRE also encouraged the acquisition of a 51% stake in PT Lancarjaya Mandiri Abadi (LMA). Currently, PPRE and LMA managed a number of national strategic projects.
See also: United Rentals (USA)
See also: United Rentals (USA)
