Dahlan Iskan & BUMN Karya Bankruptcy Alarm that Sounds!

Jakarta, CNBC IndonesiaDahlan Iskan, the former Minister of BUMN, believes that the prediction of the economists regarding the resilience of BUMN Infrastructure is only a matter of time. The position of BUMN Karya is described as being difficult or very difficult.

The construction sector has indeed become one of the sectors most affected by the Covid-19 pandemic. Construction projects were forced to stall when Indonesia first received uninvited guests from Wuhan, China.

The stalling of this project has certainly caused the capital-intensive construction sector to suffer severe losses due to bad cash flow. Meanwhile, the huge financial burden due to large business debts must still be paid.

This is of course reflected in the financial statements of Karya State Owned Enterprises (BUMN) in 2020 whose performance is very unsatisfactory. Several BUMN Karya have had to cut their net profit by 90%.

This is the concern of the former BUMN Minister Dahlan Iskan, who published the article Haus Kerongkongan. Dahlan highlighted a number of BUMN Karya which produced unsatisfactory performance amidst the incessant infrastructure projects.

Photo: President Joko Widodo Inaugurates the Pandaan-Malang Toll Road (Doc. Jasa Marga)

Of all Karya BUMNs, there is 1 company whose losses are very severe when compared to its siblings. It is PT Waskita Karya Tbk (WSKT) which in 2020 was forced to book a net loss of Rp. 7.38 trillion.

This massive net loss wiped out all of Waskita’s retained earnings that have been collected since the company was first established in 1973 so that WSKT’s current equity is only Rp 7.53 trillion, more than half, to be exact, 57.88% from last year’s position of Rp. 17.88 trillion.

Even WSKT was forced to book a gross loss of Rp 1.97 trillion. Gross loss itself is a very negative thing because business income, aka turnover, cannot even cover the cost of revenue.

A company that experiences a gross loss, the net loss is likely to swell because even before paying sales expenses, general and administrative expenses, and tax expenses, the company has lost because it is unable to cover the cost of goods.

As a result, WSKT’s loss caused the company’s cash and cash equivalents to be wiped out. It was recorded that by the end of 2019 the company had cash and cash equivalents of IDR 9.2 trillion, while at the end of 2020 the company’s cash and cash equivalents was only IDR 1.2 trillion or a decrease of 87%.

This is of course very dangerous for a capital intensive company like WSKT. Because if cash is running low amidst the company’s swelling debt of Rp. 89 trillion, the risk of default will of course increase, especially in the midst of economic uncertainty due to the Covid-19 pandemic, which is unclear when it will end.

Of the Rp. 89 trillion WSKT debt recorded, most of it, namely Rp. 48 trillion, is short-term, so that the company’s cash ratio with its short-term debt or commonly known as the cash ratio is at 2.5%.

This figure, of course, shows that the company’s cash position is very small and the potential for default is quite high and of course there will be opportunities for the company to bankruptcy.

In fact, it was not only WSKT that suffered losses, but its subsidiaries were also observed to record a severe net loss which of course was burdensome to the parent entity. Just note that PT Waskita Beton Precast Tbk (WSBP) recorded a net loss of Rp. 4.75 trillion and PT Waskita Toll Road which lost Rp. 965 billion.

Next Page >> What about WIKA and others?



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