Is 2018’s Revenue Target Accomplished?
We conduct a site visit to IPCM a few weeks ago. In the early of 2018, IPCM targeted the revenue of IDR1.1 trillion (+30.6% y-y) and the net profit of IDR150 billion (+26.5% y-y). It is also heavily reliant on pilotage and towage services as its revenue’s main driver in 2018. The growth in port traffic correlates to IPCM’s revenue; thus, the improvement in commodities prices, particularly coal and crude prices boosting export activities, is potential for increasing IPCM’s revenues.

Little-Bit-Sanguine IPCM
We estimate that IPCM is likely to post revenue of IDR878 billion (+17.6% y-y) and net profit of IDR147 billion (+16.8% y-y). Factors underlining our conservative estimate are 1)The trade war and the rupiah depreciation potential for any changes in policies curbing imports with a view to keep current account deficit in check, 2) Until 6M18, IPCM posting revenue of IDR361 billion or 32.8% of the target, 3) in accordance to the Ministry of Transportation data, traffic containers in ports posting per year average growth of 2.39%, 4) limited number of vessels as setback in increment of services volume.

Traffic in ports has its rush hours; thus, to keep vessels in well-maintained condition, one vessel should only operate 60% from the total operational hours. This fact urges IPCM to rent vessels with a view to completing its target, sends the cost of partnership to soar, and whittles away gross margin.

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