PT Wijaya Karya Beton Tbk, known as Wika Beton, is allocating Capex worth IDR 250 billion in 2023 that will be invested for the maintenance of factories and equipment. The company also plans to invest to increase the production capacity in 2023.
Wika Beton is a subsidiary company of state-owned construction firm PT Wijaya Karya Tbk (Wika). Back in 1977, Wika developed precast concrete for residential terraces. A year later, Wika’s concrete molding business was split into a separate division called the Concrete Products Division and only had one concrete factory in Bogor. The division later expanded its business by establishing six new concrete factories in Pasuruan (East Java), Boyolali (Central Java), Majalengka (West Java), Lampung, Binjai (North Sumatra) and Makassar (South Sulawesi). In 1997, the division became Wika Beton.
Maintenance and investment
“Next year, in line with the increase in production targets, we are targeting Capex of between IDR 200 billion to IDR 250 billion,” Wika Beton Director of Finance and Risk Management Ahmad Fadli Kartajaya said during a conference on October 19, 2022.
He added that by the third quarter of 2022, Wika Beton has been able to realize a Capex budget of IDR 49 billion from the total budgeted funds of IDR 68 billion.
“For the 2022 Capex, we initially targeted IDR 218 billion in the Company Work Plan and Budget [RKAP] but by looking at the acquisitions of contracts and our production plans, we predicted that we would only achieve IDR 68 billion by the end of the year,” he said.
In terms of financial performance, Wika Beton recorded a positive performance until June 2022. The company posted an operating income of IDR 1.85 trillion in the first half of 2022. This value grew 47.16% compared to the same period in 2021. The company’s net profit in the first semester of 2022 was IDR 60.29 billion, a 68.59% increase compared to the same period last year of IDR 35.76 billion.
Rising fuel price obstacle
Despite the increasing production target, however, Wika Beton has also been affected by the rising fuel price. The ongoing Russia vs Ukraine war has created energy crisis in Europe while at home the government decided to increase the fuel prices.
Kartajaya said the government’s decision has eventually prompted the company to raise logistical costs. As Wika Beton mostly produces precast concrete, ready mix or natural material that needs to be sent to customers which location is far from the factories, they had no other option than to raise the price.
“The fuel price hike has an impact on the industry, especially for the logistics. Our products must be delivered immediately to construction locations that are far from the factory,” he said.
