Sep 13, 2016 08:08:03

Jasa Marga: 1H16 net profit relatively in-line ($JSMR)

- Higher 2Q16 net profit on lower taxes. JSMR’s 2Q16 net profit reached Rp517bn (+65% y-y, +27% q-q) which translate to 6M16 net profit of Rp926bn (+44% y-y). JSMR’s 2Q16 net profit was helped by lower taxation to Rp103bn (1Q16: Rp232bn) while interest expenses was manageable at Rp383bn (1Q16: Rp362bn). In 2Q16, JSMR’s net margin rose to 23.8% (1Q16: 19.9%) despite lower operating margin of 42.1% (1Q16: 45.6%). On the other hand, JSMR’s debts was increasing to Rp18.2tn (1Q16: 16.1tn) with 2Q16 net gearing level stood at 129% (1Q16: 121%, 2Q15: 116%).

- Growth in revenues rose in par with growth in opex. In 2Q16, revenues reached Rp2.2tn (+17% y-y, +6% q-q) as traffic volumes rose to 356mn vehicles (+4.4% y-y, +3% q-q) and JSMR enjoyed full benefit from last year’s bi-annual tariff increase. Meanwhile, JSMR’s 2Q16 opex rose to Rp1.3tn (+15% y-y, +13% q-q) with recent operation of Krian-Mojokerto toll road in March 2016.

- Lagging progress in new toll road construction. JSMR’s intangible assets (toll road concession and pre-construction land) rose to Rp31.4tn in 2Q16 (1Q16: Rp29.7tn) which translates that JSMR has spent Rp2.6tn for new toll road construction in 2016. We believe that delay in land clearing progress in several toll roads (especially in Greater Jakarta area) has caused delay in new toll road construction. As a result, we maintain our JSMR’s capex forecast of Rp6.9tn in 2016 as well as our NEUTRAL call with TP of Rp5,300.