Jasa Marga sets conservative target for next year
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Jasa Marga pasang target konservatif tahun depan
2 December 2024
Jakarta, ID – PT Jasa Marga Tbk (JSMR) is aiming for a conservative revenue growth of 6%-8% year-on-year (YoY) from its toll road business for the next year. This target indicates that JSMR could potentially achieve a maximum revenue of Rp15.06 trillion from its toll road operations in 2025.
Reflecting on its toll road revenue for the fiscal year 2023, the state-owned toll road company reported earnings of Rp13.94 trillion, marking a 12% increase from the previous year's revenue of Rp12.44 trillion. This is why the revenue target for the toll road business is considered conservative, as it is smaller compared to last year's growth target.
Mino, the Retail Research Team Leader at CGS International Sekuritas Indonesia, stated that the toll road revenue growth target of approximately 6%-8% is based on the guidelines issued by Jasa Marga. "We refer to the guidelines released by Jasa Marga. We see that the target is quite conservative," he remarked at the recent Berita Tentang Saham (BTS) event.
Mino further explained that, similar to revenue, Jasa Marga is also aiming for its EBITDA to grow by 6%-8% next year. The EBITDA margin is expected to be between 6.5% and 6.7%. Additionally, the gearing ratio is projected to be at 2 times, while the interest coverage ratio is anticipated to be at 2.5 times.
Despite the conservative revenue growth target, Mino believes that JSMR's bottom line performance, or net profit, will benefit from a positive catalyst in the form of reduced interest rates, which have the potential to continue into next year.
"With the interest rate reduction policy, the amount Jasa Marga must repay is expected to decrease, resulting in lower interest payments for the company," he stated.
Signs of further interest rate reductions have been indicated by both the Federal Reserve (The Fed) and Bank Indonesia (BI). Both central banks have mentioned the possibility of further cuts to the benchmark interest rate, given the controlled inflation.
The sentiment surrounding interest rate reductions serves as a positive catalyst for JSMR, as high interest rates have been a persistent challenge to the company’s net profit up to 30 September 2024. Additionally, operating costs for toll roads and other businesses, as well as construction expenses, have continued to rise, reaching Rp12.36 trillion. By September 2024, JSMR had recorded a total interest and accrual expense of Rp2.69 trillion, with total bank loans amounting to Rp38.80 trillion.
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