Indonesian Companies in Focus: Toll Road Operator Jasa Marga
State-controlled toll road constructor and operator Jasa Marga is expected to post rising revenue and net profit in the years to come as its toll road network is expanding amid the government's drive to push for infrastructure development, including toll road development. Recently Jasa Marga was awarded four toll road projects - all on the island of Java - with a total length of 262.3 kilometers (valued at IDR 18.4 trillion). Up to 2017 Jasa Marga plans to commission some 313 kilometers of toll road.
Its aggressive toll road expansion drift is what makes Jasa Marga's capital expenditure (capex) budget for 2016 rise to the record high of IDR 13 trillion (approx. USD $977 million). To cover these costs, the firm acquired a loan, plans to issue bonds and is set to receive a capital injection from the government.
In April 2016 state-controlled lenders Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) agreed to provide a syndicated loan facility worth IDR 7.7 trillion (approx. USD $580 million) for two sections of the Trans-Java Toll Road project that are built by Jasa Marga.
At the start of June 2016 it was announced that the Indonesian government plans a capital injection of IDR 53.98 trillion (approx. USD $3.9 billion) in total for 24 state-controlled companies this year, including Jasa Marga.
Furthermore, Jasa Marga plans to raise IDR 5 trillion from bonds offered in either the fourth quarter of 2016 or the first quarter of 2017 (also for debt settlement purposes).
Several toll road projects that are currently being developed by Jasa Marga are: Medan-Kuala Namu- Tebing Tinggi, Gempol-Pasuruan, Surabaya-Mojokerto, Semarang-Solo, Cengkareng-Kunciran, Kunciran-Serpong, Solo-Ngawi, and Ngawi-Kertosono. Others that are in the pipeline include Semarang-Batang, Pandaan-Malang, Manado-Bitung, and Balikpapan-Samarinda.
CIMB Securities advises investors to buy shares of Jasa Marga as the company's long-term fundamentals are sound with an estimated compound annual growth rate (CAGR) of 21 percent (net profit) over the next seven years. CIMB Securities set its target price for Jasa Marga at IDR 7,600 a piece. On Wednesday's trading day shares of Jasa Marga fell 0.91 percent to IDR 5,450 per share. However, so far this year the company's shares have risen 4.31 percent.
Stock Quote Jasa Marga - JSMR
In 2016 Jasa Marga's revenue is expected to fall to IDR 8.41 trillion, while the company's net profit is expected to rise slightly to IDR 1.47 trillion. This year the company also experiences pressures on its cash flow as a IDR 1.4 trillion bond matures while Jasa Marga also needs to invest heavily in new toll road projects.
Forecast Future Financial Highlights Jasa Marga:
| 2015 | 2016F | 2017F | 2018F | |
| Revenue | 9,848 | 8,415 | 9,193 | 10,303 |
| Net Profit | 1,466 | 1,475 | 1,589 | 1,704 |
| EBITDA | 4,197 | 4,180 | 4,703 | 5,307 |
| P/E Ratio (x) |
27,68 | 24,67 | 22,90 | 21,35 |
| P/BV Ratio (x) | 3,49 | 3,02 | 2,73 | 2,48 |
in billion IDR rupiah unless otherwise stated
Source: CIMB Securities (08/06/2016)