WIKA 11M14 new contracts booked at IDR13.9trn

Wijaya Karya (WIKA IJ, Neutral, TP: IDR2,930) achieved IDR13.9trn of new contracts in 11M14. This achievement was 53.81% from management’s guidance of IDR25.83trn. Management also stated that there were several projects delay that results in the reduction of FY14 capex allocation from IDR1.99trn to IDR1.3trn. Meanwhile, the company allocates IDR1.7trn capex for FY15, where IDR600bn will be allocated for its subsidiary, PT Wijaya Karya Beton (WTON IJ, Neutral, TP: IDR1,135).

11M14 new contracts achievement was only 67% from our projection and we are on the pessimist side regarding the company’s ability to reach its target considering there is another IDR11.93trn to be achieved with only one month left. Nonetheless, it is worth to note that FY14 has been a bumpy ride for most contractors due to the uncertainty caused by political issues.