Efficiency measures proven effective, Pelindo III profit soars 41%

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:  Langkah Efisiensi Efektif, Laba Pelindo III Melonjak 41%

24 January 2018

SURABAYA – State-owned port operator, PT Pelabuhan Indonesia (Pelindo) III, records a net profit growth in 2017 (prior to an audit) of Rp2.01 trillion, soaring 41% from the 2016 realization at Rp1.51 trillion.

“The generated net profit exceeds the 2017 target of Rp1.65 trillion,” said Pelindo III Chief Executive Officer (CEO), IG. N. Askhara Danadiputra, in his official statement after the General Meeting of Shareholders (RUPS) at the SOE Ministry Office, Jakarta, Tuesday (23/1).

The CEO, familiarly known as Ari Askhara, revealed that the profit spike was prompted by, among others, the effectiveness of the efficiency measures taken by the corporation.

“Until October last month, the efficiency measures saved at least Rp324 billion. Efficiency was intensively made in 38 non-operational expenditure categories, so the service performance quality to service users was not affected,” he explained.

Early last month, PT Pelindo III Financial Director, Saefudin Noer, revealed that within the period of January—October 2017, his company amassed Rp1.67 trillion in profits, exceeding the target set by the port operator for that year at Rp1.65 trillion.

“The Rp1.67-trillion profits were the gain [from January] until October 2017. The target [for] year 2017 is Rp1.65 trillion,” said Saefudin when contacted by Investor Daily.

Further, Ari Askhara elaborated that throughout 2017, the company income was still predominated by the core business from the port operations side. Revenues from cargo loading and unloading services were Rp5.1 trillion, achieving 8% higher than the target set or recorded an increase from the previous year at 16%. Other sources of income from the operations side include non-cargo loading and unloading services, pilotage services, and ship holding services.

The company continues to increase its business diversification to raise more income from its non-port sectors. One of them is a property business, carried out by its subsidiary PT Pelindo Properti Indonesia which has been managing several assets in Surabaya, such as maritime tourism destination at Surabaya North Quay and luxurious building for meetings at Grand Varuna Convex, and which is currently constructing Pelindo Office Tower. Business diversification in this sector has started to show positive progress.

In its property business sector, the booked revenue skyrocketed to 91% from 2016’s revenue. In 2018, Pelindo III has been aggressively investing in various sectors, including sectors supporting the government’s national strategic projects. One of the projects is the construction of a flyover to accommodate access to and from Teluk Lamong Terminal (TTL) at Tanjung Perak Port, Surabaya.

“The total budget earmarked for the construction of a flyover connecting Surabaya Western Outer Ring Road (JLLB) to TTL amounts to Rp1.3 trillion,” said Ari Askhara.

Another investment project is the construction of Gili Mas Terminal as the expansion of Lembar Port, Lombok, West Nusa Tenggara. The construction of the multipurpose terminal designed not only for cargo loading and unloading activities, but also for international cruise ship docks is estimated to cost up to Rp1.3 trillion.

Another effort made by Pelindo III to promote the tourism sector includes expanding Benoa Port, Bali and installing more facilities there, which are scheduled to complete by September this year. “Pelindo III has allocated an amount of up to Rp1.7 trillion for Benoa Port development, preparing the port to be one of the national tourism gateways that will make us proud during the annual meeting of IMF-World Bank Group 2018 this October,” he closed.

Meanwhile, Pelindo III is a State-Owned Enterprise engaging in port services, owning 23 subsidiaries and affiliates and has a duty, authority, and responsibility to manage 43 ports spread across seven provinces. Those seven provinces are East Java, Central Java, South Kalimantan, Central Kalimantan, Bali, West Nusa Tenggara, and East Nusa Tenggara. Pelindo III carries out its core business as a port service and facilities provider, playing a key role in ensuring the continuity and smoothness of sea transport activities.
 

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