Funding Risk Overshadows State Construction Companies

The performance of several state-owned construction companies improved in the first half of 2018, but debt eroded PT PP’s profit.


| Baramee Thaweesombat | 123rf.com

State-owned enterprises (SOEs) in the construction sector face pressure in terms of funding and financial risks. Although some showed performance improvement in the first half of 2018, there were still declining indicators such as for PT PP Tbk (PTPP), whose profit was depressed. This shows there are still risks arising from large funding needs to support infrastructure projects.

PT PP’s operating revenue in the first half of this year was Rp 9.51 trillion, rising 16.97 percent from the same period last year. However, its cost of revenue also rose 15.8 percent to Rp 8.04 trillion, making gross profit hit Rp 1.46 trillion.

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