Jasa Marga toll road traffic recovers fast
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 - Trafik tol Jasa Marga cepat pulih
16 November 2021
By: Parluhutan Situmorang
The public activity restrictions (PPKM) relaxation is increasing public mobility, which can be seen from the increase in vehicle traffic on PT Jasa Marga Tbk (JSMR) toll segments. Moreover, traffic on the company’s toll segments has surpassed the normal volume since this October.
If the PPKM relaxation continues until the end of the year, traffic on Jasa Marga toll segments will continue to increase, so this year’s traffic decline can be more moderate compared to the initial forecast. The company is also supported by the operation of new toll segments and the company’s effort in lowering their interest expense.
BRI Danareksa Sekuritas Analyst, Maria Renata, revealed that, based on the data, Jasa Marga’s toll road revenue from several toll segments had surpassed the normal condition by 12% at the end of October 2021. From the start of the year until now, the company’s average toll road revenue is only 7% lower than the normal condition.
“We are targeting the company’s toll segment traffic volume to only be lower by 4.7% from the normal condition throughout this year or lower from the initial forecast. This target assumes that the PPKM relaxation continues until the end of this year,” Maria wrote in her research.
With that assumption, Jasa Marga’s toll segment vehicle traffic volume is predicted to grow 8% this year compared to 2020 when the traffic volume decreased by 18% from the normal condition. The vehicle volume is predicted to reach 1.22 million vehicles in 2021 and is predicted to increase to 1.32 million vehicles at the end of 2022. That assumption shows that the company’s toll segment revenue can increase by 16.4% to Rp12.6 trillion this year.
Jasa Marga’s financial performance growth is also sustained by the operation of several new toll roads in 2021 and 2022. The company is also focusing on maintaining their profitability rate by maintaining an ICR of more than 1.5. The company is also refinancing several of their subsidiaries.
The company logs that the interest rates of three of their toll segments, namely Semarang-Solo, Gempol-Pasuruan, and Surabaya-Mojokerto toll segments, have been set to around 6.5% to 6.75% per year. The company also received a commitment from a syndicate with a set interest rate of Rp20 trillion. This can lower the company’s interest expense. Until September 2021, the company logged a total debt of Rp65.4 trillion that was dominated by bank loans by 94%.
The company will also be supported by the divestment of several toll segments with good selling prices without releasing the company’s status as the majority shareholder.
Hence, BRI Danareksa Sekuritas is also targeting Jasa Marga’s net profit this year to increase to Rp1.11 trillion from Rp501 billion last year. The company’s revenue is also predicted to increase from Rp9.58 trillion to Rp10.83 trillion. The company’s net profit margin is also predicted to increase from 5.2% to 10.3%.
The toll segment traffic recovery is encouraging BRI Danareksa Sekuritas to increase JSMR stock target price from Rp5,100 to Rp5,400 with a buy recommendation. The target price also reflects the company’s net profit that is predicted to increase to Rp1.5 trillion in 2022.
Previously, Jasa Marga announced that their net profit until the third quarter of 2021 surged to Rp749.42 billion from Rp158 billion last year. The growth is sustained by the 20.75% revenue increase to Rp8.2 trillion from Rp6.8 trillion in the third quarter of 2020.
Jasa Marga Corporate Secretary, Reza Febriano, explained that the company’s performance improvement until the third quarter of 2021 was caused by the operation of several new toll segments and the public mobility increase, so traffic volume increased compared to last year.
Moreover, Jasa Marga logged that their EBITDA increased by 29.39% to Rp5.3 trillion from Rp4.1 trillion in the third quarter of 2020. This growth is thanks to the increase in toll road revenue in the third quarter of 2021 by Rp7.6 trillion from Rp6.2 trillion last year. This also increases the EBITDA margin to 65.07%.
Furthermore, the length of the toll roads operated by Jasa Marga in total reaches 1,246 km, which covers 51% of all operational toll roads in Indonesia. The company currently owns the toll road concessions of 1,603 km of toll roads all over Indonesia.
