Fantastic Growth in Heavy Machinery Segment
The heavy machinery segment posted sales of IDR7.3 trillion (+106.6% y-y) in 4Q17. The surge in sales was bolstered by the respective growth of 76.1% y-y and 68.0% y-y in volume and selling price.
We oversee that this achievement aligns with the lustrous mining industry in 2017 to linger in 2018. The growth in sales was also coupled with the growth of 23.4% y-y into IDR1.9 trillion in spare parts & service revenue.
Positive Outlook of Mining Contract
The mining contract segment posted the surge of 34.2% into IDR8.4 trillion in revenue. We oversee that 2018’s positive outlook of the mining contract segment is attributable to the increment of 40% in the capex injected into PT Pamapersada Nusantara (PAMA).
The new government regulation permitting miners to increase its production capacity by 10% from its initial production capacity constitutes as a positive sentiment for the mining sector and opportune backdrop for mining contractors. We estimate that the coal production will reach 121 million tons (+11.7%).
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