INTERVIEW: PTPP 2011 Revenue Likely To Nearly Double - Official

Edhi Pranasidhi. Dow Jones Newswires, Jakarta - 14/03/2011

PT Pembangunan Perumahan (PTPP.JK), or PTPP, is poised to benefit from the Indonesian government's push into infrastructure as it expects to grab more contracts, which it in turn anticipates will help nearly double revenue and push up net profit in 2011, a senior official said Monday.

The state-owned construction company's revenue is forecast to jump to around IDR8.4 trillion ($985 million) in 2011 from IDR4.4 trillion at the end of 2010, helping push the company's 2011 net profit 66% higher to around IDR335 billion from IDR201.6 billion, PTPP Finance Director Tumiyana told Dow Jones Newswires in an interview.

"We are very optimistic our contracts will increase significantly this year, supported by the government's plan to raise its spending to build infrastructure, which includes the development of power plants across the country," Tumiyana said.

"The value of the contracts for this year may reach IDR16.6 trillion compared with IDR8.5 trillion a year earlier, which could well support our revenue and net profit growth significantly," Tumiyana said.

He said as of February his company has secured several new contracts, mostly to develop power plants worth IDR1.6 trillion.

The company, in which the government owns a 51% stake, will be involved in the development of 47 high-rise buildings, 90
infrastructure, and eight power plants projects in 2011.

The government has said it may announce at an infrastructure summit to be held next month, plans to develop 16 infrastructure projects over
the next five years worth around $32 billion in an effort to help spur the nation's economic growth. The government has said it will spend IDR126 trillion in 2011 to build infrastructure across the country.

BNI Securities, in a recent research note, said it expects PTPP to continue growing this year due to its status as a state-owned company.

"The company has a positive outlook," BNI Securities said.

The securities company has a Buy rating on PTPP and a target price of IDR1,200 per share. PTPP's shares closed up 8.2% Monday at IDR660.

Most of PTPP's construction projects are government-related, including those from regional governments, state universities and state-owned
companies, BNI Securities said.

Tumiyana said his company has so far maintained a better margin than the industry average.

"Our margin last year was around 3.9%, far above the industrial average margin of between 2.5% and 2.7%," Tumiyana said.