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QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATIONAnnual Report 2018
Annual Report 2018
WIKA Tower 1 & 2Jl. D.I. Panjaitan Kav. 9 - 10Jakarta 13340 - IndonesiaPhone : +6221 806 79200Fax : +6221 228 93830E-mail : [email protected]
PT Wijaya Karya
@PTWijayaKarya
ptwijayakarya
WIJAYA KARYA TV
www.wika.co.id
Annual Report 2018
PT WIJAYA KA
RYA (Persero) Tbk.Q
UANTU
M TRAN
SFORM
ATION
FOR TH
E BEST OF TH
E NATIO
N
Life always evolved, PT Wijaya Karya (Persero) Tbk.
(“WIKA”) continues to grow to show commitment
as an entity that is always forward-thinking. The
enthusiasm for giving the best contribution to the
Nation has become a great force that guides WIKA’s
steps to always be a dynamic, responsive, adaptive and
innovative entity to produce high-quality monumental
works.
The enthusiasm was also an inspiration for WIKA to
continue transforming from previously only focusing
on sectors that became core competencies, until now
we transformed into an integrated business company
and has penetrated into broader sectors, namely
Infrastructure & Buildings, Energy & Industrial Plant,
Realty & Property, Industry, Investment, Construction
Engineering, and Integrated Transportation System.
As this transformation continues, WIKA’s capacity
grows even more as reflected in various superior
achievements in operational, financial, business
capacity, human resource and other aspects.
T R A N S F O R M A T I O NF O R T H E B E S T O F T H E N AT I O N
Q U A N T U MBuilding potential to empower the country is a long
journey that must be taken with a firm commitment.
For this reason, WIKA is always consistent to
provide the best for whole work elements. Not only
constructing, WIKA also ensures that all projects
can contribute equally from big cities in Java to the
remote parts of Papua.
With hope that there will be business continuity and
harmony between people, planet and profit, WIKA
continues to expand and realize the best performance
in order to build a prosperous and sustainable
nation. Through good synergy between subsidiaries,
associates, business partners and all stakeholders,
WIKA increasingly emphasizes its position as a center
of excellence that has the capability to present a
gateway to a more qualified Nation’s life.
2 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
CONTINUITY OF THEMES
BUILDING GREATER IMPACT AND SHARING GROWTH
WIKA has committed to contribute to the success of government programs, especially in infrastructure developments, in line with the Company ’s core business in construction. A number of infrastructure development have been mandated by the Government to the Company, and WIKA’s infrastructure and buildings development brings a positive impact to “Create Impact” and benefit to society (stakeholders). The infrastructure and buildings have a design that is not only modern, but follows the concept of “social impact”, where people can feel the benefit from this infrastructure immediately and the advantages that will improve their welfare and economic growth.
CREATING PROMISING FUTURE
We are the future. A courage to make a breakthrough, belongs only by people who have a vision for the future. WIKA continues to grow, explore, and create new things is a bright spot that is building the future of the nation.
OPERATIONAL EXCELLENCE FOR BEST RESULT
WIKA, getting more established in multinational companies level, at present has already had a wide range of instruments to manage products and services in accordance with international labor standards. Through Operational Excellence, WIKA builds management integrations that boost productivity, increase efficiency and grow profits.
DEVELOPING HUMAN CAPITAL FOR GROWTH AND EXCELLENCE
Increasing growth of WIKA businesses can happen due to the role of each person in the Company, or in other words, “human” is one of the key to success for the growth of an organization. Consequently, every employee is considered as human capital to WIKA, meaning that each person has the strength and competency to perform a transformation for the elevation of the Company.
2015
2013
2016
2014
3PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
DREAM. BELIEVE. ACHIEVE.
During the 58 years of active development in homeland infrastructure, WIKA showed remarkable growth and development. The journey of almost 6 decades proved that WIKA always dared to try something new with measurability. How can WIKA succeed in such a way? The key is simple. WIKA dares to dream high, believes and is optimistic to make it happen. Dream, Believe, Achieve.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
Laporan Tahunan 2018
Laporan Tahunan 2018
WIKA Tower 1 & 2Jl. D.I. Panjaitan Kav. 9 - 10Jakarta 13340 - IndonesiaT : +6221 806 79200F : +6221 228 93830E-mail: [email protected]
PT Wijaya Karya
@PTWijayaKarya
ptwijayakarya
WIJAYA KARYA TV
www.wika.co.id
Laporan Tahunan 2018PT W
ijaya Karya (Persero) TbkQ
UAN
TUM
TRAN
SFORM
ATION
FOR TH
E BEST OF TH
E NATIO
N
2017
2018
QUANTUM TRANSFORMATION FOR THE BEST OF THE NATION
Conformity with the Theme of the 2018 Annual Report Award:
“Information Accuracy for Sustainable Corporate Performance by Winning Stakeholders’ Support”
Throughout its business journey, WIKA continues to transform and strives to win the support of all stakeholders. For this reason, WIKA is working on various Government projects, fellow SOEs, and the private sector with a commitment to give the best. The commitment confirms WIKA’s position as the executor of crucial tasks in the development of civilization, which will provide long-term benefits in advancing and developing the Indonesian economy.
WIKA is very aware that the quality of stakeholder management is the key to success in achieving optimal performance and proud output. To that end, WIKA engages, manages, utilizes, and communicates with each stakeholder effectively, to achieve the Company’s goals and plans as expected. This Annual Report is presented with accurate information about the Company’s performance in 2018.
4 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
Is a value creator who is able to adapt to the change of epochs. Starting a business from an electrical installer then grew to become Engineering, Procurement, Construction (EPC) and Investment Company in many sectors including power plants, toll roads, ports and the transportation industry.
Having strong leadership and the ability to choose the right human capital in realizing the business direction going forward.
Always leading in construction technology and business expansion units (Mass Rapid Transit, Oil and Gas, and Power Plant technology).
Being able to transform into a business group with a variety of business pillars, development of subsidiaries, associates, each of which focuses on working on certain business segments. However, it still integrates with each other through a backward-forward integration strategy.
The pioneer of the first precast concrete industry developer in the country was marked by the construction of precast concrete plants in several regions of the archipelago in the late 1970s. Now it continues to grow with 15 concrete plants with a production capacity of 3.6 million tons/year which always produce a variety of concrete precast concrete products as a pioneer for monumental projects (railroad tracks bearing, piles, electric poles, box girder, span MRT tunnels, sudetan, etc.)
THE ADVANTAGES OF WIKA
PIONEER
VALUE CREATOR
BACKWARD-FORWARD
LEADERSHIP
HIGH TECHNOLOGY
5PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
Leading in developing Engineering, Procurement, Construction and Commissioning (EPCC), as well as investing and developing a number of infrastructure projects, especially projects that are Government programs related to the State Budget (APBN).
Able to work on civil construction projects with design and build methods starting from the project planning process to the construction process.
Innovation and development of intangible assets; knowledge management (KM-WIKA), WIKA Management System (ISO 9001, ISO 14001, ISO 31000, OHSAS 18001, Security Management System) and WIKA Information System that has been integrated.
Experienced in working on various foreign projects that spread across the Asian and African countries whose expansion continues through the development of patterns of Project Management Services (PMS) and penetrated into the pattern of main contractors and overseas sub-contractors.
Experienced in developing real estate and property business, both as a contractor and developer. At the moment, WIKA is also entering the Transit Oriented Development (TOD) business, which is one of the cities that adopts mixed spatial planning and maximizes the use of mass transportation, such as Bus Rapid Transit (BRT), Commuter Line, Mass Rapid Transit (MRT), Light Rail Transit (LRT), and Automated People Mover System (APMS).
Leading in utilizing the leading technology of Building Information Modeling (BIM) that is able to provide a comprehensive overview in 3 dimensions of the project to be done. By using BIM, WIKA can plan more precisely and minimize the risks that arise in the stages of work on the project.
EPCC
OVERSEAS EXPANSION
DESIGN & BUILD
TRANSIT ORIENTED DEVELOPMENT
INNOVATION
BUILDING INFORMATION MODELLING
6 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
WIKA’S PERFORMANCE AT GLANCE
SHAREHOLDING SUBSIDIARIES
ABOUT THE COMPANY
G ove r n m e n t o fR e p u b l i c o f I n d o n e s i a
P u b l i c65.05%34.95%
PT Wijaya Karya Beton Tbk. (60.00%)
PT Wijaya Karya Realty (93.05%)
PT Wijaya Karya Industri dan Konstruksi (97.22 %)
PT Wijaya Karya Rekayasa Konstruksi (90.04%)
PT Wijaya Karya Bangunan Gedung Tbk. (69.30%)
PT Wijaya Karya Bitumen (99.00%)
PT Wijaya Karya Serang Panimbang (80.00%)
LINI BUSINESS
R p I N V E S T M E N T
R E A LT Y & P R O P E R T Y
I N F R AS T R U C T U R E & B U I L D I N G
I N D U S T RY
C O N S T R U C T I O N E N G I N E E R I N G
I N T E G R AT E D T R A N S P O R TAT I O N
SYS T E M
E N E R GY & I N D U S T R I A L P L A N T
7PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
NEW CONTRACT ORDER BOOK
NET REVENUE
SIGNIFICANT AWARDS
NET INCOME
KOMODO BOND
PERPETUALNOTES
WIKA’S ACHIEVEMENTS IN 2018
Rp26.18 trillion (2017)
Rp42.40 trillion (2017) Rp106.64 trillion (2017)
Rp1.36 trillion (2017)
Rp31.16 trillion (2018)
Rp50.56 trillion (2018) Rp123.51 trillion (2018)
Rp2.07 trillion (2018)
Increased by 19.24% to Rp50.56 trillion as of December 31, 2017.
Increased by 15.82% to Rp123.51 trillion as of December 31, 2017.
Increased by 52.89% to Rp2.07 trillion as of December 31, 2017.
Asia Sustainability Report 2017 Kategori Asia’s Most Tranparent Report
Top 2 Best Growth Strategy Public Listed SOE Category.
Champion for ASEAN 2018 Sektor Konstruksi
Indonesia Good Corporate Governance (GCG) Award 2018 dan Operational Excellence Award I 2018 Kategori Public Company
Platinum Rank “Asia Sustainability Reporting Rating 2018”
Best of The Best version Majalah Forbes Indonesia
Indonesia Most Trusted Company 2018
WIKA’s Perpetual Notes I in 2018 were successfully issued with an amount of Rp600 billion. The proceeds from the issuance of Perpetual Notes will be used to finance the investment and working capital of the Company.
WIKA has successfully issued Komodo Bonds listed on the Singapore Exchange and London Stock Exchange. WIKA’s Komodo Bond was oversubscribed with 2.5x and managed to raise funds of Rp5.4 trillion.
Increased by 19.03% to Rp31.16 trillion as of December 31, 2017.
19.03%
19.24% 15.82%
52.89%
Rp
TABLE OF CONTENTS
PERFORMANCE HIGHLIGHTSFinancial Overview
Operational Overview
Share Overview
Bonds, Sukuk, and/or Bonds
12
20
21
23
MANAGEMENT REPORTS34
42
Board Of Commissioners’ Report
Board of Directors’ Report
COMPANY PROFILECorporate Identity
Milestone
Brief History of Company
Business Field
Regional Business Map
Goods and Service
Business Lines
Organizational Structure
Vision, Mission and Corporate Value
Identity and Curriculumof the Board of Commissioners
Identity and Curriculum of Board of Directors
Executive Officers Profile
Structure and Composition of Shareholders
List of Subsidiaries and/or Associated Entities
54
56
60
64
66
68
70
72
74
78
88
98
108
111
MANAGEMENT DISCUSSION AND ANALYSIS Overview of Industry and Macroeconomic Conditions in Indonesia 2018
Operational Review
Business Segment Overview
Financial Performance
Ability To Pay Debt And Receivables Collectibility
Capital Structure
180
184
185
189
199
201
24
25
30
30
Main Strategy 2018
Significant Events
Corporate Actions
Temporary Termination of Stock
122
123
124
126
128
136
145
146
152
160
172
Structure of Company ’s Group
Chronology of Listing of Shares
Chronological Issuing and/orListing of Bonds and Other Securities
Name and Addresses of SupportingInstitutions and/or Professionals Capital Market
Award and Certification
Name and Address of Subsidiaries, Association Entities, Strategic Business Units, Overseas Branch Offices and Division Offices
Information Available on the Website
Employee Demographic
Education and/or Training of the Board of Commissioners, Directors, Committees, Corporate Secretary and Internal Audit Unit
Human Capital
Information Technology
202
204
205
206
Material Commitments for Capital Goods Investments
Comparison between Targets at the Beginning of the Year and Realization
Business Prospect
Material Information and Facts After Date of Auditor ’s Report Marketing AspectsMarketing Aspects
8 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
GOOD CORPORATE GOVERNANCECompany Commitment in Implementing Corporate Governance and Governance Outcome
Corporate Governance Structure and Mechanism
Board of Commissioners
Board of Commissioners’ Perfomance Assessment
Frequency and Attendance Level of Board of Commissioners Meetings
Board of Directors
Board of Directors’ Perfomance Assessment
Frequency And Attendance Level of Board Of Directors Meetings
Remuneration Policy of the Board of Commissioners and Directors
Audit Committee
Nomination, Remuneration and GCG Committee
Other Committee under the Board of Commissioners
Risk Monitoring Function
Governance of Corporate Social Responsibility Corporate Social Responsibility Related to Human Rights
Corporate Social Responsibility towards Fair Operating Practices
Corporate Social ResponsibilityRelated to the Environment
224
250
258
277
280
289
298
306
314
318
327
333
334
384
391
392
394
CORPORATE SOCIAL RESPONSIBILITY
335
337
344
346
350
355
356
358
360
366
368
369
370
371
372
Corporate Secretary
Internal Control Unit
Public Accountant
Risk Management
Internal Control System
Provision of Funds for Social Activities and/or Politics
Important Case
Access to Company Information and Data and Relations with Stakeholders
Code of Ethics
Whistleblowing System
Majority and Controlling Shareholder
Management of State Property Reports (LHKPN)
Prevention of Insider Transactions
Buyback Shares and Bonds
Corporate Governance Compliance According to Asean Corporate Governance Scorecard
396
402
405
409
Corporate Social Responsibility Related to Employment, Occupational Health, and Safety
Corporate Social Responsibility Related to Consumers
Corporate Social ResponsibilityRelated to Social Development
Corporate Social Responsibility Related to Suppliers
Marketing Aspects
Material Information Related to Investments, Expansions, Divestments, Acquisitions, or Debt and Capital Restructuring
Dividends Policies
Stock Ownership Program
Use of Funds from the PMHMETD Until December 31, 2018
207
208
209
210
211
212
216
217
218
219
220
Material Information Containing Conflicts of Interest and/or Transactions with Related Parties
Changes In Regulations and Their Impact
Changes in Accounting Policies
Business Continuity Information
Company Soundness Level
Subsidiaries’ Performance
9PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
PERFORMANCE HIGHLIGHTS 12
20
Financial Overview
Operational Overview
Share Overview
Bonds, Sukuk, and/or Bonds
21
23
Surabaya-Gempol, Porong Gempol Package I Toll Road
Main Strategy 2018
Significant Events
24
25
Corporate Actions
Temporary Termination of Stock
30
30
12 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
DESCRIPTION 2018 2017 2016 2015 2014
Net Revenues 31,158,193,498 26,176,403,026 15,668,832,513 13,620,101,419 12,463,216,288
Cost of Revenues (27,553,466,348) (23,300,168,938) (13,476,892,423) (11,959,841,920) (11,035,578,572)
Gross Profit 3,604,727,150 2,876,234,088 2,191,940,090 1,660,259,499 1,427,637,716
Selling Expenses (10,445,343) (9,958,720) (9,094,812) (7,695,193) (6,838,756)
General and Administrative Expenses (775,299,502) (666,714,154) (517,734,503) (421,462,453) (386,009,513)
Interest Income - - 50,971,372 59,686,089 73,500,762
Increase in Fair Value of Investment Properties - - 4,484,439 - -
Gain on Bargain Purchase - - 51,474,654 - -
Gain (Loss) in Foreign Exchanges - - (5,445,321) 28,350,510 (2,039,829)
Allowance for impairment - - (46,400,343) (30,500,231) (46,244,153)
Other Income 1,122,197,667 416,734,338 - - -
Other Expenses (106,482,566) (295,507,893) - - -
Finance Cost (972,528,679) (677,973,460) (435,314,128) (431,409,359) (197,704,174)
Final Income Tax Expenses (726,942,503) (629,479,208) (365,015,329) (346,788,000) (286,455,956)
Loss from Associated Entity (309,628,664) (123,644,382) (38,190,543) (5,514,535) (7,123,198)
Share in Profit of Joint Venture 533,031,374 572,700,749 378,836,006 288,402,591 369,757,130
Others Net - - 34,727,654 (27,998,951) (35,738,242)
Profit Before Income Tax 2,358,628,934 1,462,391,358 1,295,239,236 765,329,966 902,741,788
Income Tax Expenses (285,329,070) (106,275,869) (84,209,926) 49,900,712 121,144,974
Net Income 2,073,299,864 1,356,115,489 1,211,029,310 715,429,254 781,596,814
Other Comprehensive Income After Tax
Other Comprehensive Income that Will not be Reclasified Subsequently to Profit or Loss
Actuarial Gain (Loss) of Defined Benefit Plan 140,243,105 (47,649,429) (16,618,045) 6,306,290 (7,616,608)
Other Comprehensive Income for the Year 2,213,542,969 1,308,466,060 1,194,411,265 721,735,544 773,980,206
Income Attributable to:
Owner of Parent Entity 1,730,256,243 1,202,069,175 1,058,935,366 635,257,252 640,818,710
Non Controlling Interest 343,043,621 154,046,314 152,093,944 80,172,002 140,778,104
Total 2,073,299,864 1,356,115,489 1,211,029,310 715,429,254 781,596,814
Total Comprehensive Income (Loss) Attributable to:
Owner of Parent Entity 1,860,117,752 1,158,684,399 1,043,915,368 645,904,113 635,901,757
Non Controlling Interest 353,425,217 149,781,661 150,495,897 75,831,411 138,078,448
Total 2,213,542,969 1,308,466,060 1,194,411,265 721,735,544 773,980,206
Earnings Per Share (Full amount) 193,02 134,10 162,21 103,31 104,21
CONSOLIDATED STATEMENTS OF PROFIT AND OTHER COMPREHENSIVE INCOME
FINANCIALOVERVIEW
(in thousand Rupiah)
13PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
2014 2015 2016 2017 2018
in billion Rupiahin billion Rupiah
NET REVENUE
NET INCOME
C A G R2 0 1 4 - 2 0 1 8
C A G R2 0 1 4 - 2 0 1 8
25.74% 27.60%
12,4
63
13,6
20
15,6
69
26,1
76
31,1
58
2014
782
715
1.21
1
1.35
6
2.0
73
2015 2016 2017 2018
DESCRIPTION 2018 2017 2016 2015 2014
Net Cash Flow Provided by Operating Activities 2,722,531,219 1,885,252,166 (1,113,343,805) 224,272,849 (179,730,589)
Net Cash Used for Investing Activities (4,917,957,798) (2,637,548,255) (1,338,524,756) (325,091,864) (1,268,223,615)
Net Cash Provided by Financing Activities 4,876,802,750 2,727,823,454 9,175,983,354 345,914,785 2,360,099,519
Increase of net cash and cash equivalent 2,681,376,171 1,975,527,365 6,724,114,793 245,095,770 912,145,315
Impact in Foreign Exchange 38,612,091 8,251,266 (14,235,692) 14,132,531 2,039,829
Beginning Balance of Cash and Cash Equivalent 11,253,778,215 9,269,999,584 2,560,120,483 2,300,892,182 1,386,707,038
Ending Balance of Cash and Cash Equivalent 13,973,766,477 11,253,778,215 9,269,999,584 2,560,120,483 2,300,892,182
CASH FLOW STATEMENTS
14 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
DESCRIPTION 2018 2017 2016 2015 2014
ASSETS
CURRENT ASSETS
Current Assets Cash and Cash Equivalents 13,973,766,477 11,253,778,215 9,269,999,584 2,560,120,483 2,300,892,182
Restricted Deposits 20,000,000 20,100,000 - - -
Trade Account Receivables
Related Parties 2,745,540,433 3,000,643,116 1,195,435,762 937,535,147 691,807,092
Third Parties 2,605,300,003 1,929,510,016 2,555,662,357 1,844,445,009 1,271,025,540
Retention Receivables
Related Parties 677,642,045 348,167,986 230,315,881 205,416,970 179,581,695
Third Parties 1,246,488,344 979,998,517 556,569,838 391,860,998 313,023,077
Gross Amount Due from Customers
Related Parties 5,565,798,797 5,826,664,167 1,763,089,366 1,733,563,354 1,195,553,937
Third Parties 4,336,247,938 3,434,294,927 2,207,768,831 1,510,834,434 1,174,305,923
Unbilled Receivables - Current Portion 924,845,767 592,563,302 349,559,336 251,510,864 82,846,240
Other Accounts Receivable
Related Parties 1,420,649,920 170,978,921 139,086,756 29,575,526 10,757,700
Third Parties 58,488,669 133,988,030 77,931,227 76,695,192 97,897,949
Inventories 5,978,533,161 3,839,540,301 3,182,130,677 1,031,277,931 817,307,342
Advances 1,487,325,514 1,180,612,848 627,823,946 439,641,163 384,431,063
Prepaid Taxes 1,615,704,032 1,298,271,722 757,785,883 529,036,987 425,794,117
Prepaid Expense 735,419,058 702,804,644 595,314,817 465,274,857 241,370,431
Business Guarantee 105,100,463 88,042,632 33,211,810 15,032,335 12,895,738
Real Estate Assets - - - 920,214,145 836,280,348
Financial Assets from Concession Projects - Current Portion
58,645,244 110,148,921 110,148,921 110,148,921 110,148,921
Total Current Assets 43,555,495,865 34,910,108,265 23,651,834,992 13,052,184,316 10,145,919,295
NON-CURRENT ASSETS
Trade Accounts Receivables - Non Current Portion
Third Parties 1,719,973 4,657,606 184,873,545 13,402,337 40,182,013
Other Accounts Receivables - Non Current Portion
Related Parties 3,984,331,159 1,211,412,309 285,000,000 285,000,000 -
Third Parties 14,617,480 5,324,891 - - -
Unbilled Receivables - Non Current Portion 444,232,429 114,576,313 34,645,312 - -
Advances - Non Current Portion 280,000,000 247,857,941 148,763,335 - -
Prepaid Expense - Non Current Portion - 354,297,694 - - -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousand Rupiah)
15PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
DESCRIPTION 2018 2017 2016 2015 2014
Business Guarantees - Non Current Portion - 172,513,482 179,184,563 7,611,346 5,865,179
Financial Assets from Concession Projects - Non Current Portion
- 58,645,244 168,794,166 278,925,495 389,074,416
Real Estate Assets 711,009,859 512,182,215 258,905,609 275,446,573 142,006,418
Investment in Associates 727,823,591 396,918,845 330,174,029 300,607,375 227,137,428
Investment in Joint Venture 1,813,165,802 2,812,600,560 2,114,559,007 1,597,379,391 1,669,608,387
Investment Property 1,593,674,779 538,548,500 461,185,251 456,084,911 430,056,664
Fixed Assets - Net 4,675,679,014 3,932,108,696 3,324,669,312 3,184,400,113 2,676,043,079
Goodwill - Net 4,847,052 4,847,052 4,847,052 4,847,052 4,847,052
Other Long Term Investment 559,267,882 116,658,458 89,450,795 67,860,215 37,532,807
Intangible Assets 714,353,513 139,077,296 - - -
Other Assets 118,345,546 125,739,132 100,088,704 116,417,694 162,807,477
Deferred Tax Assets 31,437,295 25,699,803 18,229,018 26,283,705 28,147,824
Total Non- Current Assets 15,674,505,374 10,773,666,037 7,703,369,698 6,614,266,208 5,813,308,744
TOTAL ASSETS 59,230,001,239 45,683,774,302 31,355,204,690 19,666,450,524 15,959,228,039
LIABILITIES
CURRENT LIABILITIES
Short Term Loans
Related Parties 1,663,039,321 2,974,410,303 1,959,410,812 608,319,568 570,012,133
Third Parties 2,536,992,008 3,449,443,672 2,752,415,707 613,502,788 358,503,311
Trade Payables
Related Parties 176,597,892 139,182,504 68,179,539 36,378,547 60,004,589
Third Parties 13,006,775,938 8,785,803,858 4,459,255,102 4,287,019,827 3,842,802,356
Other Payables 29,816,535 265,454,484 238,762,353 99,048,974 73,678,786
Due to Customers 9,705,502 - - 13,224,506 9,641,161
Tax Payable 467,488,448 441,631,879 188,857,241 177,085,029 168,940,523
Advances Received from Customers 1,233,776,339 1,442,187,701 767,675,536 477,381,896 316,364,321
Accrued Expenses 8,634,099,492 7,805,962,536 3,247,437,280 - -
Unearned Revenues 196,987,012 188,856,055 125,127,130 406,959,558 178,593,992
Short Term Portion of
Medium Term Notes 250,000,000 175,000,000 800,000,000 249,000,000 541,000,000
Lease Payables 37,299,977 41,259,887 18,772,830 22,300,954 16,893,554
Long Term Loan 9,372,921 266,424,418 283,123,166 324,706,736 221,620,359
Total Short Term Liabilities 28,251,951,385 25,975,617,297 14,909,016,696 10,600,100,431 8,478,608,469
16 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
DESCRIPTION 2018 2017 2016 2015 2014
LONG TERM LIABILITIES
Employee Benefits Liabilities 178,708,069 337,172,202 243,072,993 200,490,168 181,284,262
Deferred Tax Liabilities 140,226,300 45,890,326 46,147,721 24,963,304 14,342,845
Advances for Long Term Projects 3,644,322,003 2,477,316,688 2,327,873,112 1,662,677,044 1,049,416,204
Other Payable - Non Current Portion 707,321,016 107,894,953 159,520,193 - -
Long Term Portion Net of Short Portion
Medium Term Notes 6,084,622,512 1,000,000,000 425,000,000 975,000,000 800,000,000
Lease Payables 213,628,754 96,849,868 52,064,738 46,365,276 48,454,961
Long Term Loan 2,793,906,635 1,011,208,355 454,519,946 668,501,024 472,538,845
Total Long Term Liabilities 13,762,735,289 5,076,332,392 3,708,198,703 3,577,996,816 2,566,037,118
TOTAL LIABILITIES 42,014,686,674 31,051,949,689 18,617,215,399 14,178,097,247 11,044,645,587
EQUITY
Equity Attributable to Owners of Parent EntityShare Capital Nominal Value: Rp100 (full amount) per ShareShare Capital - 35,000,000,000 Shares
Shares Issued and Fully Paid-up - 8,969,951,372 Share
896,995,137 896,995,137 896,995,137 614,922,500 614,922,500
Treasury Stock (10,272,110) (10,272,110) (10,272,110) (10,272,110) (10,272,110)
Additional Paid-in Capital 6,555,720,677 6,555,720,677 6,555,720,677 715,858,789 715,858,789
Changes in Equity of Subsidiaries 1,283,644,636 1,330,850,680 997,335,383 997,335,383 997,335,383
Remeasurement Employee Benefit - - (99,591,149) (84,571,151) (90,877,441)
Perpetual Notes 597,600,000 - - - -
Retained Earnings 5,479,925,961 3,860,221,964 3,005,085,913 2,170,755,948 1,679,270,994
Sub Total 14,803,614,301 12,633,516,348 11,444,865,000 4,404,029,359 3,906,238,115
Non Controlling Interests 2,411,700,264 1,998,308,265 1,293,124,291 1,084,323,918 1,008,344,337
Total Equity 17,215,314,565 14,631,824,613 12,737,989,291 5,488,353,277 4,914,582,452
TOTAL LIABILITIES AND EQUITY 59,230,001,239 45,683,774,302 31,355,204,690 19,666,450,524 15,959,228,039
17PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
2014
20142014
20142015
20152015
20152016
20162016
20162017
20172017
20172018
20182018
2018
in billion Rupiah
in billion Rupiahin billion Rupiah
in billion Rupiah
INVESTMENT OF THE ASSOCIATE
ENTITIES
EQUITY
LIABILITIESASSETS
C A G R2 0 1 4 - 2 0 1 8
C A G R2 0 1 4 - 2 0 1 8
C A G R2 0 1 4 - 2 0 1 8
C A G R2 0 1 4 - 2 0 1 8
38.80%
33.82%36.80%
39.66%
11,0
45
15,9
59
227
4,9
15
14,1
78
19,6
66
301
5,4
88
18,6
17
31,3
55
330
12,7
38
31,0
52
45,
684
397
14,6
32
42,
015
59,2
30
728
17,2
15
18 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
DESCRIPTION 2018 2017 2016 2015 2014
PROFITABILITY (%)
Return on Equity 14.18 10.52 10.70 16.71 21.09
Return on Investment 7.41 7.32 7.64 9.44 9.98
Return on Assets 3.95 3.52 4.75 7.17 5.22
LIQUIDITY (%)
Cash Ratio 49.53 43.40 62.18 24.16 27.14
Current Ratio 154.17 134.40 158.64 118.52 120.55
Quick Ratio 133.01 127.99 150.83 108.79 110.91
ACTIVITY
Collection Period (days) 63 69 87 75 57
Total Assets Turn Over (Times) 53.07 58.32 50.48 71.72 81.92
CAPITAL STRUCTURE (TIMES)
Debt to Equity Ratio 2.44 2.12 1.46 2.60 2.26
Debt to Total Assets Ratio 0.71 0.68 0.59 0.72 0.69
Gearing Ratio 0.79 0.62 0.53 0.65 0.62
Total Equity to Total Assets Ratio 0.29 0.32 0.41 0.28 0.31
MARGIN (%)
Gross Profit Margin 11.57 10.99 13.99 12.15 11.43
Operating Profit Margin 10.76 10.59 13.04 11.12 11.24
Net Profit Margin 6.65 5.18 7.73 5.16 5.97
GROWTH (%)
Sales 19.03 67.06 15.04 9.28 4.87
Operating Income 20.41 35.63 35.01 8.02 15.26
Income Attributable to Parent Entity Owner 40.25 13.52 69.42 2.78 6.71
Total Assets 29.65 45.70 59.96 23.21 26.31
Equity 17.66 14.87 134.24 11.51 51.13
FINANCIAL RATIO
19PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
RETURN ON INVESTMENT (ROI)
DEBT TO EQUITY RATIO
CURRENTRATIO
LIABILITY TO EQUITY RATIO
20142014
120
.55
9.98
118.
52
9.4
4
158.
64
7.64
134
.40
7,32
154
.17
7.41
20152015 20162016 20172017 20182018
2014 2014
2.26
0.6
2
2.60
0.6
5
1.4
8
0.5
3
2.12
0.6
2
2.4
4
0.7
9
2015 20152016 20162017 20172018 2018
9,4
4
7,64
7,32
7,41
20 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
(in billion Rupiah)
(in billion Rupiah)
(in billion Rupiah)
(in billion Rupiah)
INFORMATION 2018 2017 GROWTH
(RP) (RP) (%)
New Contract 41,145.14 26,413.01 55.78
Order Book 98,356.01 79,684.21 23.43
INFORMATION 2018 2017 GROWTH
(RP) (RP) (%)
New Contract 1,786.78 7,379.39 (75.79)
Order Book 12,752.23 15,613.27 (18.32)
INFORMATION 2018 2017 GROWTH
(RP) (RP) (%)
New Contract 6,455.20 6,648.69 (2.91)
Order Book 9,769.24 8,304.73 17.63
INFORMATION 2018 2017 GROWTH
(RP) (RP) (%)
New Contract 1,173.07 1,961.10 (40.18)
Order Book 2,635.80 3,039.90 (13.29)
Table of Operational Performance of Infrastructure and Building Segments
Table of Operational Performance of Energy and Industrial Plant Segments
Table of Operational Performance of Industrial Segments
Table of Operational Performance of Realty and Property Segments
OPERATIONALOVERVIEW
21PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
SHAREOVERVIEW
YEARPRICE PER SHARES (RP) TOTAL SHARE
(IN MILLION SHARE)
TRANSACTIONVOLUME
(SHARES)
MARKETCAPITALIZATION
(RP MILLION)OPENING HIGHEST LOWEST CLOSING
2018
Quarterly I 1,560.00 2,120.00 1,525.00 1,680.00 8,969.95 7,111.00 15,069.52
Quarterly II 1,700.00 1,755.00 1,250.00 1,325.00 8,969.95 8,492.70 11,885.19
Quarterly III 1,325.00 1,690.00 1,255.00 1,365.00 8,969.95 9,853.20 12,243.98
Quarterly IV 1,375.00 1,720.00 1,100.00 1,655.00 8,969.95 12,978.70 14,845.27
2017
Quarterly I 2,360.00 2,570.00 2,400.00 2,410.00 8,969.95 1,140.00 21,617.58
Quarterly II 2,410.00 2,390.00 2,180.00 2,210.00 8,969.95 864.85 19,823.59
Quarterly III 2,210.00 2,250.00 1,790.00 1,790.00 8,969.95 908.37 16,056.21
Quarterly IV 1,790.00 2,050.00 1,505.00 1,550.00 8,969.95 1,480.00 13,903.42
Table of Price, Volume and Shares Capitalisation of WIKA 2017-2018
Share Price and Volume Movement in 2017-2018
20,000,000
Quaterly 1 Quaterly 1Quaterly 2 Quaterly 2Quaterly 3 Quaterly 3Quaterly 4 Quaterly 4
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
Closing Price Transaction Volume
3,000
2,500
2,000
1,500
1,000
500
00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017 2018
22 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
Graphic of Quarterly Closing Price Movement 2017-2018
Graphic of Quarterly Share Volume Movement 2017-2018
2017 2018
TW1 TW2 TW3 TW4
1,3651,325
1,680
2,410
2,210
1,790
1,550
1,655
2017 2018
TW1 TW2 TW3 TW4
908.37864.851,140
7,111
8,492.70
1,480
12,978.70
9,853.20
23PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
BONDS, SUKUK, AND/OR BONDS
INFORMATION OF BONDS
KOMODO BONDOn January 29, 2018, WIKA issued rupiah-denominated bonds amounting to Rp5,400,000,000 which will mature in January 2021. These bonds bear a 7.7% interest fee per year. These Komodo Bond bonds are listed on the Singapore Exchange and the London Stock Exchange.
INFORMATION OF SUKUK
As of December 2018, WIKA has not issued sukuk, thus there is no information about sukuk.
INFORMATION OF CONVERTIBLE BONDS
As of December 2018, WIKA does not issue convertible bonds and therefore there is no information regarding convertible bonds.
OTHER FUNDING SOURCES INFORMATION
PERPETUAL NOTESOn December 27, 2018, the 2018 WIKA Perpetual Notes I were successfully issued. Total the funds collected from the issuance of Phase I 2018 amounted to Rp600,000,000,000. The yield is set at 10.5% per year plus a Step-up Rate (if any).
Table of Bond Issue
Table of Issue of the Perpetual Notes
DESCRIPTIONDATE OF
ISSUETENOR CURRENCY
VALUE (BILLION)
DATE OFMATURITY
LEVEL OF INTEREST
RATE
PAYMENT STATUS
RATINGTRUSTEE
2018 2017
PERPETUAL NOTES
Perpetual Notes
December 27, 2018
Until the option is redeemed by the publisher
Rp 600 Until the option is redeemed by the publisher
10.5% applies Step-up Rate (if any)
Not Yet Paid
Fitch: AA
- PT Bank CIMB Niaga Tbk.
DESCRIPTIONDATE OF
ISSUETENOR CURRENCY
VALUE (BILLION)
DATE OFMATURITY
LEVEL OF INTEREST
RATE
PAYMENT STATUS
RATINGTRUSTEE
2018 2017
KOMODO BOND
Komodo Bond January 29, 2019
3 Years Rp 5,400 January 29, 2021
7.7% Not Yet Paid
Fitch: BBMoody’s : B2a
- The Bank of New York Mellon
24 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
MAIN STRATEGY 2018
0102
04
06
08
03
05
07
09
The addition of two additional business lines, namely Construction Engineering, and Integrated Transportation System which complements five WIKA pillars, namely Industry, Infrastructure & Building, Energy & Industrial Plant, Realty & Property, and Investment
Spreading its wings to the Asian and African markets.
Become a creative/Initiator for large-scale projects by prioritizing BUMN Synergy both Investment, Availability Payment and Turn Key Project.
Integration with renowned planning consultants for Design and Build projects.
Targeting Multiplier Effect projects.
Evaluation and regeneration of Human Resources to prepare future leaders.
Expand the network of private market projects.
Alternative expansion of funding sources namely Komodo Bond, Bonds and Perpetual Notes.
Creating a project with a concept offer to the owner.
10
Creating alternative funding sources and increasing balance sheet capacity with the issuance of Perpetual Notes.
25PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
SIGNIFICANT EVENT
WIKA collaborated with PT West Java International Airport (BIJB) Aerocity Development. The signing of the MoU between DOP III Destiawan Soewardjono and the Managing Director of BIJB Alfiansyah was conducted at Grand Preanger, Bandung. The cooperation between the two parties aims to develop the aerocity area which will be a buffer for Kertajati Airport in Majalengka Regency, West Java.
WIKA was increasingly raising its work abroad by building 1,700 and 2,250 AADL Lodgement units located in Algeria. In this project WIKA appointed 108 ambassadors with a ceremony held at the WIKA Tower Auditorium.
WIKA officially published “Komodo Bonds” on the London Stock Exchange worth Rp5.4 trillion, equivalent to US$ 405 million with a 7.7% bond coupon per year. Komodo Bonds WIKA received great support from global investors and experienced oversubscribed reaching 250%.
Indonesian President Joko Widodo conducted a working visit to the Senayan Jakarta MRT Station Project which was carried out by WIKA in the Shimizu - Obayashi - WIKA - Jaya Konstruksi (SOWJ) Consortium.
WIKA cooperated with PT Pelabuhan Indonesia (Persero) III in the construction of Terminal Teluk Lamong access flyover, Surabaya, East Java. The synergy of these two BUMNs was marked by the signing of a cooperation contract valued at Rp1.3 trillion by WIKA’s General Manager and Pelindo III Management in Lamong Bay. The signing was witnessed by Surabaya City Assistant II Secretary, M. Taswin, Pelindo III Managing Director I Gusti Ngurah Ashkara Danadiputra (Ari Ashkara), WIKA’s Board of Directors, and PT Mitrakarya Multiguna Directors.
WIKA, represented by Director Destiawan Soewardjono welcomed the arrival of the Indonesian Ambassador to Afghanistan, Arief Rachman MD along with the Afghan government delegation at the WIKA Building. This visit was one part of series of visits by Afghan business delegations to Indonesia.
JANUARY 15, 2018
FEBRUARY 20, 2018
JANUARY 29, 2018
MARCH 7, 2018
FEBRUARY 5, 2018
MARCH 12, 2018
26 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
WIKA was increasingly optimizing the African market through the initiation of cooperation with the Zambia Government. This momentum is one of the important agendas the Company made at the Indonesia Africa Forum (IAF) at the Nusa Dua Bali Convention Center.
2018 Annual General Meeting of Shareholders of 2017 PT Wijaya Karya (Persero) Tbk. took place at the WIKA Tower 2 Auditorium.
Indonesian President, Joko Widodo, reviewed a series of WIKA projects (construction of roads and sidewalks in Sudirman - Thamrin and GBK venues) used at the 2018 Asian Games. During the inspection, the President was accompanied by PUPR Minister Basuki Hadimuljono, Minister of Youth and Sports Imam Nahrawi, Minister of State Pratikno, Head of the Creative Economy Agency Triawan Munaf, Chair of INASGOC Eric Thohir, and DOP I Agung Budi Waskito.
WIKA won the “Best Partnership Program and Community Development in Construction Category” award at the event entitled Appreciation of the 2018 Indonesian Community Development & Partnership Program held by the Economic News at Sari Pacific Hotel.
WIKA successfully entered the ranks of the SRI KEHATI 25th Corporate Index in 2018 at the Indonesia Green Company Achievement 2018 at the Ayana Mid Plaza Hotel.
APRIL 10-11, 2018 APRIL 24, 2018
JUNE 25, 2018
APRIL 30, 2018
JULY 11, 2018
27PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
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MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
Minister of State-Owned Enterprises Rini M. Soemarno, Minister of Industry Airlangga Hartarto, President Director of WIKA Tumiyana, Managing Director of Indonesia Fertilizer Aas Asikin and President Director of Pupuk Sriwijaya Palembang (Pusri) Mulyono Prawiro jointly conducted groundbreaking suppression which marked the first step The construction of Fusion II’s NPK (Nitrogen Phosphorus & Potassium) Fertilizer Plant has a production capacity of 2x100 thousand tons located in Palembang.
WIKA continued to work with Japanese construction company KAJIMA Corporation (KAJIMA) to continue developing the WIKA Engineering and Research Institute (WERI). This agreement was marked by the Signing of an Extension of the Memorandum of Understanding between the two companies at WIKA Tower 2.
WIKA signed a Memorandum of Understanding and Synergy Cooperation Agreement with Semen Indonesia, Semen Baturaja, Hotel Indonesia Natour and Pelindo III at the Ministry of BUMN.
WIKA Group achieved 4 Awards in the 2018 BUMN Award Event organized by BUMN Track Magazine. The awards received were: Top 2 Best Growth Strategies in the category of BUMN Tbk., Excellence in Interpersonal Relationship embedded in the CEO of WIKA Tumiyana, Top 2 Best Business Innovations for PT WIKA Gedung Tbk., and Top 2 Best Talent Development for PT WIKA Beton Tbk.
WIKA collaborated with Citra Consortium to Build Manila-Taguig Express Way Elevated Toll Road. This joint agreement was signed by the President Director of WIKA Tumiyana, Authorized Representative Citra Lamtoro Gung Persada Phillipines Sahra M. Mayor, and witnessed directly by the Minister of State-Owned Enterprises Rini M. Soemarno and President Director of PT Citra Persada Infastruktur Indrawan Sumantri.
Directors and management were present at the 2018 Public Expose on the Indonesia Stock Exchange in the 2018 Investor Summit event. On this occasion, the Board of Directors explained the update of the 2018 semester 1 financial statements and several corporate action plans.
MAY 11, 2018
JULY 18, 2018
MAY 17, 2018
AUGUST 12, 2018
MAY 30, 2018
AUGUST 27, 2018
28 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
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PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
WIKA won again to achieved Indonesia Champion for ASEAN 2018 Construction Sector, which was given directly by Hermawan Kartajaya as Founder and CEO of MarkPlus Inc., to WIKA Agung I Wasito’s Director of Operations I at Raffles Hotel Jakarta at the 4th ASEAN Marketing Summit.
Indonesian President, Joko Widodo, and Minister of State-Owned Enterprises Rini M. Soemarno reviewed the 450 Watt electricity connection program which was also initiated by WIKA for 100 thousand families who were considered less capable in Bogor Regency.
WIKA obtained the honor of being the only SOE selected to be visited by the Singapore Business Federation (SBF) Delegation at WIKA Headquarters.
In the 2018 IMF & World Bank annual meeting, WIKA optimized opportunities and reaches several strategic dealing businesses with several countries. Some of them are agreements to build residential houses and office buildings with The Development Bank of Rwanda and the construction of tin smelters in Nigeria facilitated by the Indonesian Exim Bank.
WIKA was included in the Best of the Best category by Forbes Indonesia magazine. This award was given to the 50 best Indonesian companies in the Forbes Indonesia ranking. This award was received by WIKA’s Corporate Affairs Manager Satrio Adji at the gala dinner and the awarding night which took place at Shangri-La Hotel, Jakarta.
SEPTEMBER 6, 2018
DECEMBER 2, 2018
SEPTEMBER 18, 2018 OCTOBER 11-14, 2018
NOVEMBER 30, 2018
29PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
WIKA’s President Director Tumiyana and PT Angkasa Pura II (Persero) (“AP II”) President Director Muhammad Awaluddin signed a memorandum of understanding on the synergy of SOEs and/or Subsidiaries in the operation and maintenance of airports managed by AP II
WIKA Together with PT Angkasa Pura II (Persero) agreed on the process of exploring the construction of the Soekarno-Hatta International Airport Integrated Building Hotel through the signing of a Memorandum of Understanding.
A.N.S. Finance Director Kosasih won the award as the first winner in the Indonesia Best Chief Financial Officer Award 2018. Indonesia Best Chief Financial Officer Award 2018 is a regular event organized by SWA magazine in order to appreciate the professional development in finance that was held at the Shangri-La Hotel in Jakarta.
WIKA’s Operations Director, Destiawan Soewardjono won the Best Industry Marketing Champion Construction Category award at the 2018 The Best Marketer of the Year (MOTY) event organized by Mark Plus Inc.
WIKA won the CFO Innovation Awards for Excellence in Supply Chain Finance at the 2018 CFO Innovation Awards.
OCTOBER 21, 2018
DECEMBER 11, 2018
NOVEMBER 29, 2018
DECEMBER 4, 2018 DECEMBER 7, 2018
WIKA was successfully selected as the winner in international event Year in Infrastructure 2018 Award held by software provider Bentley in London, England. WIKA won 1st place in the Advancements in Bridges Category at the Design and Build Project of Road Bridge at Teluk Lamong Port Project 2018 and 1st Place in the Advancements in Environmental Engineering Category on the Landside Disaster Protection Project on the National Road Network 2018.
OCTOBER 19, 2018
30 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
CORPORATEACTION
PERIOD DESCRIPTIONNOMINAL
VALUE (RP)
OFFER PRICE(RP)
NUMBER OFSHARES ISSUED
ISSUED AND FULLY PAID UP CAPITAL
NUMBER OFSHARES
TOTAL NOMINALVALUE (RP)
TOTAL OFFER PROCE
(RP)
BEFORE IPO 4,000,000,000 4,000,000,000
2007 Initial Public Offering 100 420 1,846,154,000 5,846,154,000 584,636,750,000 775,384,680,000
2009 Exercise ESOP/MSOP 100 322.74 213,500 5,846,367,500 584,636,750,000 68,904,990
2010 Exercise ESOP/MSOP 100 322.74 155,173,000 6,001,540,500 600,154,050,000 50,080,534,020
2011 Exercise ESOP/MSOP 100 322.74 25,727,000 6,027,267,500 602,726,750,000 8,303,131,980
2012 Exercise ESOP/MSOP 100 322.74 80,699,000 6,107,966,500 610,796,650,000 26,044,795,260
2013 Exercise ESOP/MSOP 100 322.74 32,001,500 6,139,968,000 613,996,800,000 10,328,164,110
2014 Exercise ESOP/MSOP 100 322.74 9,257,000 6,149,225,000 614,922,500,000 2,987,604,180
2016 Limited Public Offering 100 2,180 2,820,726,372 8,969,951,370 896,995,137,000 6,149,183,490,960
As of December 2018, WIKA has never been subject to sanctions for the temporary suspension of stock trading (suspension) and/or the elimination of delisting.
Table of Corporate Action of WIKA
TEMPORARY TERMINATION OF STOCK TRADING(SUSPENSION) AND/OR DELISTING OF SHARES REGISTRATION (DELISTING)
31PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
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GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
31
Tamansari Parama Jakarta
PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
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MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
MANAGEMENT REPORTS34
42
Board of Commissioners’ Report
Board of Directors’ Report
Jakarta Giant Sea Wall
34 2018 Annual Report PT WIJAYA KARYA (Persero) Tbk.
QUANTUM TRANSFORMATIONFOR THE BEST OF THE NATION
PERFORMANCEHIGHLIGHTS
MANAGEMENTREPORT
BOARD OF COMMISSIONERS’ REPORT
President CommissionerDR. IR. IMAM SANTOSO, M.SC.
35PT WIJAYA KARYA (Persero) Tbk. Annual Report 2018
COMPANYPROFILE
MANAGEMENT DISCUSSION AND ANALYSIS
GOOD CORPORATEGOVERNANCE
CORPORATE SOCIALRESPONSIBILITY
“THE BOARD OF COMMISSIONERS CONSIDERS THAT THE BOARD OF DIRECTORS HAS SHOWN OPTIMAL PERFORMANCE,
ESPECIALLY THROUGH THE STRATEGIC POLICIES OF THE BOARD OF DIRECTORS WHICH ARE CARRIED OUT
APPROPRIATELY AND DIRECTED.”
Dear Shareholders and other stakeholders, Thank you to the presence of God Almighty that in 2018, WIKA again recorded a significant step in carrying out its strategic role as an entity that helped support Indonesia’s economic development. Thanks to the protection and grace of God Almighty, WIKA succeeded in realizing aspirations and even surpassing the planned target.
On this occasion, allow me to represent the Board of Commissioners to deliver WIKA’s performance reports throughout 2018. Through this report, the Board of Commissioners will deliver an assessment of the Directors’ performance, oversee the implementation of the Company ’s strategy, view the business prospects prepared by the Board of Directors, implement Good Corporate Governance, evaluation of the Board of Commissioners’ supporting committees, changes in the composition of the Board of Commissioners, and the frequency and manner of providing advice to members of the Board of Directors.
All duties and responsibilities have been carried out in accordance with the Company ’s Articles of Association and laws and regulations. The Board of Commissioners has ensured that the operational activities of the Company have referred to a business plan that has been established, managed on a regular basis professional, in accordance with the interests of shareholders and other stakeholders, and as well as ensure compliance with all regulations and current regulation.
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INDONESIAN ECONOMIES GLOBAL DEVELOPMENT
World economic growth in 2018 continues to improve. Even so, some risks continue to overshadow. The economies of developed and developing countries in 2018 still lead to recovery despite the pace of moderation compared to 2017.
Global factors such as the high sentiment of trade wars between the US and China, geopolitical risks in the Middle East and the Korean Peninsula, as well as the increase in world oil prices play a role in the increasing uncertainty of global financial markets. From the domestic side, pressure also comes due to increased demand for foreign exchange for the needs of foreign debt payments, payment of dividends and imports.
In the first quarter of 2018, solid economic growth occurred widely which was generally supported by increased investment. The increase in the level of demand has also contributed to the increase in commodity prices, especially world crude oil commodities. The increase in oil prices was also caused by a decline in production and geopolitical tensions involving oil-producing countries.
Even though the level of economic activity globally is still very solid, the rate is slowing down in 2018, which shows that the peak of global economic recovery has occurred at the end of 2017. This is also evident in the global trade and manufacturing index which is in a slowing trend despite growth positive and in a high enough position.
Global conditions also influence the economic conditions in the country, as seen from the exchange rate of the Rupiah against the US Dollar which continues to be weakened. Despite the heavy external pressure, Indonesia’s economic growth is still well maintained. One of them is seen from economic growth which is above 5%.
This achievement is a very positive thing which proves that even though it is under global pressure, Indonesia’s economic growth is still experiencing a strong momentum of growth. Economic indicators for the fourth quarter of 2018 showed that private
consumption remained strong, supported by maintained consumer purchasing power and confidence and the positive impact of election preparation. The quarterly quarter in the last three years shows that household consumption is still relatively well maintained, growing above 5% during 2018. This figure is far better than 2017 and 2016, which a few quarters decreased below 5%. This achievement was also supported by the inflation assumption that was in line with the target because it was successfully controlled at the level of 3.13% from the target of 3.5%. Overall economic growth in 2018 reaches 5.15% of the 2018 State Budget target of 5.4%. The difficulty of achieving these macro assumptions is due to the influence of global economic uncertainty.
ASSESSMENT OF DIRECTORS’ PERFORMANCE
The Government’s focus, which still emphasizes the acceleration of infrastructure, is becoming an added value for WIKA, which runs the core business in the construction sector. During 2018, the Company has succeeded in increasing revenue in almost all segments it has. Revenue from infrastructure and building segments in 2018 reached Rp20.60 trillion, an increase of 20.32%, from Rp17.12 trillion in 2017.
Meanwhile, industry segment revenues reached Rp4.12 trillion, increasing by 13.80% compared to Rp3.62 trillion in the previous year. While the income of the energy and industrial plant segments reached Rp5.12 trillion, an increase 29.28% compared to 2017 of Rp3.96 trillion. The growth of the three operating segments of the Company has succeeded in increasing total revenue by 19.03% in 2018. Such improvement in operational performance has had an impact on increasing the Company ’s assets and profits. The Company ’s assets increased by 29.65%, while profits attributable to owners of the parent entity increased by 52.89% in 2018.
For this achievement, the Board of Commissioners gave a tremendous appreciation to the Directors who had worked hard and achieved the targets that had been planned, even exceeding the target. The Board of Commissioners considers that the Board of Directors has shown optimal performance, especially through
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the strategic policies of the Board of Directors which are carried out appropriately and directed. The Board of Commissioners evaluates the performance of the Board of Directors based on the Key Performance Indicator (KPI) which summarizes the targets that must be achieved by the Board of Directors in the current year.
The Board of Directors’ performance assessment is also carried out based on the achievement of targets set in the Company ’s RKAP that are agreed together by considering external capacity and conditions. From the aspect of the target of the new contract, the Board of Directors managed to realize the achievement of Rp50.56 trillion. While from the financial aspect, the Board of Directors managed to achieve the sales target of 79.01% and the net profit exceeded the target of 110.50%. Assessing that amid the challenges of economic conditions, both nationally and globally, as well as ever increasing business competition, the Board of Directors has sought various strategic steps so that the Company continues to survive and grow sustainably.
Some of the main strategies outlined by the Board of Commissioners are the success in launching an alternative expansion of Global IDR Bond and Perpetual Notes as funding sources. A funding alternative that has been proven to succeed in accelerating WIKA’s performance and further strengthening WIKA’s capital structure. Apart from that, the expansion strategy was also expanded by expanding to several international markets, including Algeria, Philippines, Taiwan, Malaysia, Nigeria, and others. The efforts have shown the results where WIKA is trusted to carry out projects and to create innovations in these countries.
COMPANY SOUNDNESS LEVEL
The level of soundness of the Company measured by Decree of the Minister of State-Owned Enterprises Number: 100/MBU/2002 shows that overall realization of the Company ’s sound level score in the year 2018 is 81.75 with a qualification of AA and SOUND. The measurements are based on performance Company covering operational, financial aspects and administration.
SUPERVISION TO STRATEGY IMPLEMENTATION OF THE COMPANY
The Board of Commissioners always places oversight on the implementation of the Company ’s strategy as one of the priorities. All operational activities and financial management are always carried out based on best practices on the principles that apply according to the laws and regulations. Towards the Board of Directors, the Board of Commissioners carries out responsibilities by providing constructive and solutive advice and recommendations in facing challenges. One thing that has always been emphasized by the Board of Commissioners to the Board of Directors is to always prioritize compliance aspects and good corporate governance principles.
The Board of Commissioners’ oversight of the performance of the Board of Directors is also carried out through meetings held at least once a month, including periodic submissions of the Company ’s Business Results Evaluation and Performance Progress Reports per Directorate. Meetings held consist of Joint Meetings of the Board of Commissioners of the Board of Directors, and Rakomsus which are held to discuss specific events when needed. Supervision of the Board of Commissioners is also assisted by the Audit Committee, Nomination, Remuneration and GCG Committee.
In addition, the Board of Commissioners supervises the field directly by visiting the location of the Company ’s strategic projects and subsidiaries. During the visit, the Board of Commissioners checked whether the work that has been carried out was in accordance with the quality, contract, and meeting customer expectations.
THE VIEW OF THE IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE
The implementation of good corporate governance is always the focus of the duties and responsibilities of the Board of Commissioners in conjunction with the Directors. In 2018, the Board of Commissioners
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considers that the Board of Directors and all WIKA elements have implemented good corporate governance principles, namely Transparency, Accountability, Responsibility, Independence and Fairness. These principles are the important key points to always be run with full awareness so as WIKA always goes well, has high performance without sacrificing independence and responsibility.
Overall, the Board of Commissioners considers that the Company has implemented the best corporate governance, risk management and internal control guidelines. From time to time, the Board of Commissioners sees the Company as having a strong commitment to continually improve the implementation of Good Corporate Governance (GCG) and realize it consistently. The realization of this commitment can be seen from various awards in the field of compliance as well as the acquisition of 2018 GCG assessment scores which reached 94.949 with the title “Very Good”.
PERFORMANCE ASSESSMENT OF COMMITTEES UNDER BOARD OF COMMISSIONERS
The implementation of the duties and responsibilities of the Board of Commissioners in agreement and accountability are supported by the Audit and the Nomination Committee, as well as the Remuneration and GCG Committee. During 2018, the Audit Committee carried out its duties including contributing to the Board of Commissioners through reviewing financial information, reviewing the implementation of risk management activities, reviewing the results of the audit of the Internal Audit Unit and KAP on the Internal Control System. While the Nomination, Remuneration and GCG Committee has carried out its duties among others by giving approval to the Board of Commissioners on the Nomination, Remuneration of the Board of Commissioners and Directors, monitoring negotiations on Company activities, and GCG implementation.
In 2018, the Board of Commissioners considers that these committees under the supervision of the Board of Commissioners have been conducted their
respective functions effectively with constructive input and direction to the Board of Commissioners.
VIEWS AND ROLE IN MANAGING THE WHISTLEBLOWING SYSTEM (WBS)
As one of the points of implementation of Good Corporate Governance (GCG) principles, WIKA always strives to ensure that the Whistleblowing System (WBS) can increase awareness and initiative towards monitoring violations in the Company as a means of preventing, disclosing violations or fraudulent acts within the Company, including Insider Trading, Fraud, Money Laundry, Anti-Bribery and Corruption (ABC), discrimination and other irregularities. For this reason, socialization and refinement will continue to be carried out so that internal and external parties can participate in overseeing the Company ’s performance and jointly build a clean WIKA.
Throughout 2018, the Board of Commissioners actively engages and oversees the effectiveness of WBS implementation in the Company. Every report received in the WBS will be processed by the GCG Compliance Team, Fact Finding Team, and the Honorary Council of Employees with the involvement of the Directors and Commissioners as determinants of the decision. The report is certain to be followed up explicitly with appropriate and balanced sanctions. From the follow up actions, it is expected that there will be a deterrent effect for the perpetrators of the violations as well as a warning to those who have the intention to commit violations.
During 2018 there were no reports of violations submitted through the WBS. The Board of Commissioners supports every effort to encourage WIKA’s commitment to clean and accountable business practices.
FREQUENCY AND MECHANISM IN GIVING ADVICES TO THE BOARD OF DIRECTORS
The Board of Commissioners has an obligation to provide recommendations and advice to the Directors.
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Apart from going through meetings and field visits, the Board of Commissioners gave them in written. Each plan submitted by the Board of Directors will be followed up by the Board of Commissioners to ensure that its implementation is always in line with the rules and aspirations of Shareholders.
The Board of Commissioners reviews every proposed work plan that is submitted to then provide input, criticism, reminder, and feedback for the Board of Directors as a part of supervision function. The assessment process is also carried out by involving committees with due regard to field conditions, human resource capacity and other considerations. In 2018, the frequency of counseling of the Board of Commissioners was carried out more intensively as the issuance of Perpetual Notes and Komodo Bond. In this case, the use of the collected funds must be approved by the Board of Commissioners. Internal meetings of the Board of Commissioners continue to be held to obtain input from the Committee.
VIEWS ON THE PROSPECTS THAT HAVE BEEN DESIGNED BY THE BOARD OF DIRECTORS
The Board of Directors has compiled the 2019 RKAP and has been approved by the Board of Commissioners by highlighting the net profit target and the significant increase in new contracts. The Board of Commissioners support the preparation of the RKAP considers that the planned target is in accordance with the predictions of the economy, market, politics, and community conditions in 2019 and in accordance with WIKA’s capabilities and capacity. The Board of Directors fully understands that future development trends will increasingly demand quality, innovation, connectivity and technology. The Board of Directors is able to prepare the Company to be able to accommodate these needs along with meeting the Company ’s support for national strategic projects.
The Board of Commissioners realizes that the challenges in 2018 will not be easier compared to 2017. Indonesia’s macroeconomic conditions are estimated to remain in the economic growth range of 5.1-5.3%. However, challenges from externally, especially from
the aspect of global economic conditions and the geopolitical situation, still overshadow and have the opportunity to put pressure on domestic economic conditions.
2019 will be a year of democracy with the Presidential and Legislative General Elections simultaneously which will affect the economy more or less. Facing these conditions, the Board of Commissioners hopes that business conditions will remain stable and security will be maintained. In 2019, infrastructure projects under the auspices of national strategic projects will also continue. The target of WIKA’s new contract in 2018 is Rp50.56 trillion, which is increasing to Rp61.74 trillion in 2019. The Board of Commissioners is optimistic that this new contract target will be achieved and the Company ’s profits will soar. Especially with the APBN which still emphasizes much on infrastructure so that WIKA hopes to be able to win more contracts and continue to build the country.
The Board of Commissioners sees that WIKA is a large entity. To maintain its existence, WIKA must maintain high margins, avoid stagnation, and be increasingly expansive. The Board of Commissioners also appealed for the profit allocation obtained and the use of collected funds to be used maximally to encourage the growth of the Company with a strategy that is right on target and guided by GCG principles so that WIKA stays in the proper corridor.
In 2019, it will also mark the big step of two subsidiaries that will conduct Initial Public Offering (IPO), namely Wika Realty and WIKA Industri & Konstruksi. The Board of Commissioners hopes that the IPO will run smoothly and raise massive funds that will support WIKA’s expansion. Through this IPO, it is also a hope for WIKA to provide multiple effects for the wider community in all parts of Indonesia. The community is increasingly empowered, the absorption of labor is increasing, and Indonesia is increasingly prosperous. The Board of Commissioners believes that with the Board of Directors’ prudent strategic policies and applicable regulations, market fluctuations will be well dealt with.
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CHANGE OF THE BOARD OF COMMISSIONERS COMPOSITION
In 2018, the composition of the Company ’s Board of Commissioners has changed as follows:
Period of January 1, 2018-April 24, 2018, the Board of Commissioners amount to 6 (six) people consisting of 1 (one) President Commissioner, 3 (three) Commissioners and 2 (two) Independent Commissioners. All members of the Board of Commissioners are domiciled in the working area of the WIKA Head Office.
Period of January 1, 2018 – April 24, 2018
NAME POSITION
Imam Santoso President Commissioner
Eddy Kristanto Commissioner
Freddy R. Saragih Commissioner
Liliek Mayasari Commissioner
Nurrachman Independent Commissioner
Imas Aan Ubudiah Independent Commissioner
Period of April 24, 2018 – December 31, 2018
NAME POSITION
Imam Santoso President Commissioner
Eddy Kristanto* Commissioner
Freddy R. Saragih Commissioner
Liliek Mayasari Commissioner
Imas Aan Ubudiah** Independent Commissioner
Suryo Hapsoro Tri Utomo Independent Commissioner
Achmad Hidayat Independent Commissioner
Period of April 24, 2018-December 31, 2018, the Board of Commissioners consists of 7 (seven) people consisting of 1 (one) President Commissioner, 3 (three) Commissioners and 3 (three) Independent Commissioners. All members of the Board of Commissioners are domiciled in the working area of the WIKA Head Office.
*) Based on the Resolution of Extraordinary General Meeting of Shareholders March 25, 2019, he is no longer servesmas member of the Board of Commissioners**) As of September 20, 2018, she has been registered on the List of Permanent Candidates for Indonesian Parliament Members 2019 General Election. According to Article 14 paragraph 29, she is no longer fulfill the requirements as a Board of Commissioners member due to the prohibition of concurrent positions as candidates of he House of Representatives of the Republic of Indonesia.
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President Commissioner
DR. IR. IMAM SANTOSO, M.SC.
CLOSING AND APPRECIATION
For the excellence performance achievements that have been engraved in 2018, the Board of Commissioners appreciate the Board of Directors, Management and all of PT Wijaya Karya (Persero) Tbk.’s employees for the hard work that has been deployed so as the Company can continue to incite positive performance. Our appreciation also delivers to all business partners, raw material suppliers and surrounding communities who support the Company ’s best contribution to all stakeholders.
WIKA is an enormous company. To that end, the Board of Commissioners invites all WIKA people to jointly maintain and build WIKA to grow bigger and become more beneficial for the community, the country and the nation. The sense of belonging as part of the WIKA extended family will be a motivating force to work with heart and responsibility. Hopefully the sustainable growth that we aspire together will always encourage the spirit to gain excellence in the coming years.
On behalf of the Board of Commissioners
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President DirectorIR. TUMIYANA, M.B.A.
BOARD OF DIRECTORS’ REPORT
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“WIKA’S CAPACITY HAS ALSO GROWN EVEN BIGGER AS REFLECTED IN VARIOUS EXCELLENT ACHIEVEMENTS IN
OPERATIONAL, FINANCIAL, BUSINESS CAPACITY, HUMAN RESOURCES AND OTHER ASPECTS. AN EXTRAORDINARY
LEAP OF BUSINESS THAT DRIVES WIKA’S FINANCIAL AND OPERATIONAL PERFORMANCE TO A SATISFYING
ACHIEVEMENT.”
Dear shareholders and stakeholders,Thank you to the presence of God Almighty that in 2018 we managed to maintain the momentum of sustainable growth. Although faced with various challenges and dynamics that occur throughout the year, the Company managed to close 2018 by expanding, innovating, and preparing to grow more significantly the following year. It is an honor for me on behalf of the Board of Directors to present the Annual Report of PT Wijaya Karya (Persero) Tbk. for the 2018 financial year.
DEVELOPMENT OF GLOBAL AND INDONESIAN ECONOMIES
In 2018, global economic conditions are faced with a number of uncertainties caused by several things, such as the Federal Reserve that raised interest rates three times during 2018, the United States-China trade war, the Turkish crisis, and the political crisis and financial turmoil in Italy. This has a considerable effect on the economic conditions in the country. This is reflected in the exchange rate of the Rupiah against the US Dollar which continued to be weakened. Coupled with the condition of Current Account Deficit (CAD) which continued to widen due to the export performance that grew lower than imports. This condition indicates a decline in investor confidence in emerging markets.
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In the midst of unfavorable global economic developments, the performance of the Indonesian economy in 2018 is still quite good with sustained stability and continued growth momentum. In fact, the Central Statistics Agency said that Indonesia’s overall economic growth in 2018 was 5.17% or the best since the last five years. Although economic growth reached 5.17% or the best since 2014, this value still has not reached the target. In the 2018 State Budget, Indonesia launched a basic economic assumption in the form of economic growth of 5.4%.
If viewed from the expenditure component, economic growth throughout 2018 shows the contribution of exports as a source of negative economic growth of 0.99%. However, when viewed from cumulative growth in 2018 compared to 2017, exports grew 6.48%. Despite the growth, the export figure was lower than the import growth which shot 12.04%. This negative export is a declining factor of the rate of economic growth. While Indonesia’s economy in 2018 was mostly supported by household consumption of 2.74%. The household consumption has recovered and grown according to the trend at 5.05% cumulatively in 2018.
Since 2015, the government has shifted subsidies to productive spending, namely infrastructure, health and education. The infrastructure budget continues to increase from Rp155 trillion in 2014 to around Rp410 trillion in 2018. According to the 2018 World Bank Group report, Indonesia’s infrastructure competitiveness is ranked 52nd this year, improving compared to 2010-2013 which ranges from 70s. This increase shows the strategic role of the construction sector as a driver of the national economy.
Infrastructure supports the food security sector and the smooth production process, increasing accessibility and mobility space for the community towards social and economic activities. The strategic role of the construction sector can also be seen from the backward linkages with its supporting sectors and future linkages with sectors that utilize construction sector products. That is, the growth of the construction sector will be able to attract growth support cars and encourage the growth of other development sectors.
CONSTRAINTS FACED AND STRATEGIC POLICIES TAKEN
Fluctuations in the growth of the construction sector tend to coincide with fluctuations in economic growth. Along with the conducive economic conditions in 2018, we are proud to say that 2018 was a Quantum Leap pride for WIKA. With the completion of the major transformation carried out, the five pillars we have, namely Industry, Infrastructure & Building, Energy & Industrial Plant, Realty & Property, and Investment are now increasingly strengthened with additional business lines, namely Construction Engineering, and Integrated Transportation System. This initiative stems from WIKA’s passion to have a sustainable business. For this reason, expansion outside the service sector is an absolute thing that must be done to maximize the resources that have been owned.
WIKA’s business is now integrated from upstream to downstream. Knowledge that has been achieved during decades of business trips must be utilized optimally. From the focus of construction services in the middle stream, WIKA is now up and maximizing every potential line of business. EPC, Industry, Generating, and Energy, all of which are driven simultaneously as sources of recurring income. WIKA’s capacity has also grown even bigger as reflected in various superior achievements in operational, financial, business capacity, human resources and other aspects. An extraordinary leap of business that drives WIKA’s financial and operational performance to a satisfying achievement.
Sales in 2018 were recorded at Rp31.16 trillion, increasing 19.03% compared to Rp26.18 trillion in 2017 The biggest increase in sales level was the increase in sales in the segment of Industrial Segment by Rp5.46 trillion in 2018 or increased by 50,52% from 2017. The increase in sales has resulted in an increase in net income. In 2018, the Company posted a profit attributable to the owners of the parent entity amounted to Rp2.07 trillion, an increase of 52.89% compared to 2017 of Rp1.36 trillion.
In terms of financial position, the Company has succeeded in increasing total assets and equity. As of December 31, 2018, the total assets of
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the Company increased to Rp59.23 trillion from Rp45.68 trillion as at December 31, 2017. The increase in total assets reached Rp13.55 trillion or equal to 29.65%. This expansionary effort is also supported by an extraordinary leap in equity. In 2017, WIKA’s equity is at Rp14.63 trillion and we have successfully increased it to Rp17.22 trillion in 2018. Efforts to strengthen this balance sheet have become one of the ways to create a separate business that can encourage a sufficient balance sheet for WIKA.
Facing these conditions, WIKA was able to manage financial and operational performance and close 2018 with statement of profit of Rp2.07 trillion, positive cash flow of Rp2.68 trillion, and excess cash of Rp13.97 trillion. A performance that shows that WIKA is a solid entity. With this resistance, WIKA has the capacity to invest in a cost of fund that is maintained.
With business integration carried out, WIKA now has on hand contracts with the largest value in the industrial sector. The value of this contract also experienced a significant jump from Rp42.40 trillion in 2017, increasing considerably to Rp50.56 in 2018.
Strong initiation must be supported by a qualified engineering processor. Along with the surge in contract value that has been achieved, management conducted a massive evaluation of the readiness of Human Resources (HR) in WIKA. Regeneration is carefully prepared with targeted human development strategy support with the main goal of avoiding lag at the middle management level. Therefore, Human development is also an underlined initiation in 2018 to support the expansion and big dreams that WIKA is aiming for. Mind mapping is done in detail to find the potential generation that deserves to be included in the next line and bring WIKA to meet the potential of the business that will grow far greater.
Development and training are also given intensively to operational workers, especially for Project Managers. Existing Key Performance Indicators (KPIs) are rearranged with details that are sharper and more efficient. In addition, the hard competence of each personnel is increasingly developed with a roadmap that has been designed for the long term. All upper
level management are required to carry out knowledge transfer in order to support the acceleration of human development to achieve each target set in the KPI.
The biggest challenge in implementing strategic policies in 2018 was the demand to work harder and more detail in evaluating, determining, and implementing new standards consistently so that it immediately becomes a positive habit. All work plans, targets, programs and processes must be carefully reviewed, monitored and implemented.
In terms of competition challenges, WIKA’s success rate is in numbers 37% which means very good. In 2018 WIKA was increasingly expanding to succeed not only nationally, but also on the international competition map. In ASEAN, WIKA’s position has been in a calculated position as reflected in the Company ’s balance sheet, equity and market size which are included in the superior position qualifications.
In its ongoing business journey, WIKA also continues to be trusted to carry out projects that have significant value for the Country. Until 2018, WIKA was mandated to build as many as 47 strategic projects in Indonesia. These projects are include Pekanbaru-Padang Toll Road Project, the Construction of the Kijing Terminal, the Construction of the Patimban Cirebon Jetty, the Sadawarna Dam and the Randu Gunting Dam.
COMPARISON OF TARGETS AT THE BEGINNING OF 2018 AND THE ACHIEVEMENTS
In conformity with the massive transformation of the business process, operational order, and grand vision that is achieved through smart work and the synergy of all elements, the Company managed to accomplish the targets as stipulated in the Company ’s RKAP. Total new contracts are achieved at 88.32% of the target, along with 94.34% oder book. In addition, sales target is achieved at 79.01% of the target which pushed the Company ’s net profit to surpass the target at 110.50%.
From the comparison of targets and achievements, the Company has assessed the challenges and obstacles faced throughout the year. With the Company ’s
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The International Monetary Fund (IMF) cuts its global economic growth forecast in 2019. This is as a result of trade tensions as well as rising interest rates for the US central bank. IMF predicts 2019 global economic growth will reach 3.5%, lower than 2018 economic growth of 3.7%.
For the Asian region, the IMF predicts that the Asian economy will grow 5.4% in 2019 and remind them to be vigilant about the global situation. As the frontline in the context of global economic growth, Asia has accounted for 60% of world economic growth. Inflation in Asia is expected to increase to 2.8% in the increase in commodity prices, but will remain below the target for some countries. While Indonesia is predicted to be able to maintain its growth at 5.1%.
2019 will be the year of democratic celebration along with the simultaneous implementation of the Presidential and Legislative Elections in Indonesia. WIKA is optimistic that global and national conditions that will occur along with political turmoil will not have a significant effect on economic conditions.
In 2019, the government will begin to shift the flagship program of infrastructure into a massive program to strengthen Human Resources. Nevertheless, the government still allocates the portion of the infrastructure budget in the 2019 RAPBN of Rp420.5 trillion, which is 17.2% of the total 2019 APBN expenditure of Rp2,439.7 trillion. In the 2019 RAPBN, the government allocated a budget of Rp420.5 trillion into the infrastructure budget. This figure rose by
around 2.46% compared to the allocation in the 2018 State Budget worth Rp410.4 trillion.
The Company is very optimistic that with an in-depth understanding of Indonesia’s enormous potential, WIKA will be able to open opportunities to continue to become the leading integrated construction services provider in Indonesia and achieve the goal of excelling in the international market.
WIKA enters 2019 with an on-hand contract of Rp123.51 trillion which is still feasible to work on for the next two years. To maximize it, human development is a crucial strategy that must be implemented so that all elements are ready to carry out contracts that are already in hand. To deal with possible fluctuations, WIKA’s cha