Adhi Karya secures Rp 9t of contracts

Nani Afrida , The Jakarta Post , Jakarta Thu, 01/07/2010 10:36 AM Business

State construction firm PT Adhi Karya has secured Rp 9.06 trillion (US$978.4 million=RM3.5b) of infrastructure contracts this year, excluding those gained in 2009 that will still be carried over to 2010.

“The contracts may amount to more than Rp 9.06 trillion since we are still calculating what is left from the 2009 budget to be carried over this year,” Adhi Karya (AK) corporate secretary Kurnadi Gularso told journalists at the office of the State SOE Ministry in Jakarta on Wednesday.

Last year the company secured Rp 14 trillion worth of contracts, including from the 2008 budget.

Just like previous years, the government has dominated AK’s contracts. However, Kurnadi revealed that this year the private sectors proportion had increased by 5 percent compared to the previous year.

“This year, Adhi Karya’s contracts are about 75 percent from the government, while 25 percent is private,” Kurnadi said, adding that last year the company got 80 percent of contracts from the government.

The company is targeting to net about Rp 8.6 trillion in revenue this year and Rp 694 billion (RM290m) in gross profits. Last year the company estimated to gain Rp 7.52 trillion in revenue and Rp 463 billion in gross profits.

“We aim to get Rp 140 billion in net profits this year, which is higher than the Rp 120 billion targeted in 2009,” Kurnadi said.

According to Kurnadi, government engineering, procurement and construction contracts (EPC) will contribute 63 percent of AK revenue, while private infrastructure will contribute about 37 percent.

Adhi Karya, a state construction firm has expanded its business overseas, including to the Middle East.

Last year the firm completed a 35-floor apartment building at Al-Burj in Dubai, the site of the world’s highest tower complex.

Kurnadi said that in 2010 the company would focus on infrastructure projects in Oman and Qatar.

“There is a project in Oman. We will build a mixed-use complex called Tilal Complex El Khuwair. The complex contains apartments, a hotel and mall,” he said, adding the project would spend about Rp 969 billion to be spent this year.

AK has an infrastructure project in Qatar worth Rp 684 billion.

Kurnadi acknowledged that Adhi Karya was still struggling to resolve the dispute with Al Habtoor Engineering, the Dubai-based contractor working in Qatar. Adhi Karya was the partner of Al Habtoor in a $75 million five-star, three-tower hotel construction project.

The dispute started in 2008 when Al Habtoor reportedly cut the amount of its regular payments to Adhi Karya for the Shangri-La Hotel project. Adhi Karya then refused to continue working on schedule arguing payments should be as previously agreed.