Angkasa Pura II doubtful about profit target
JAKARTA (JP): PT Angkasa Pura II, the country's main airport operator, might not be able to meet this year's pretax profit target of Rp 500 billion (about US$70 million) due to the strengthening of the rupiah against the U.S. dollar, the company's top executive said here on Thursday.
The state-owned airport operator's president, Miskul Firdaus, said the company booked about Rp 250 billion in pretax profits for the first half of this year but said it would be difficult to maintain the profit level in the second semester.
He said that earnings in the July to December period would be lower than in the first semester, as the recent strengthening of the rupiah to between Rp 6,500 and Rp 7,000 against the U.S. dollar would cut earnings from the U.S. dollar-based fees.
"We are depending a lot on the value of the greenback since over 65 percent of our total revenue is in dollars," he said.
He said that the collapse of the rupiah throughout 1998 was a blessing in disguise for the company.
The rupiah, which plunged to its lowest level of Rp 17,000 per dollar in February last year from its pre-crisis level of Rp 2,500, has gradually recovered since late last year due to signs of recovery in the country's economy. The rupiah, which managed to break the 8,000 level early this year, continued to strengthen in recent months. The currency has traded at between 6,500 and 7,000 to the dollar over the past several months.
Miskul said Angkasa Pura II, which manages nine commercial airports in the western part of the country, including the Soekarno-Hatta International Airport in Jakarta, recorded Rp 916 billion in pretax profits last year, well above the target of Rp 768 billion. The company booked only Rp 384 billion in pretax profits for 1997.
He said the earning prospects for the coming years would be much gloomier due to the planned privatization of the management of the Soekarno-Hatta airport some time this year.
"Around 80 percent of our total revenue is derived from managing the Soekarno-Hatta airport and air traffic control," he said.
The management of the Soekarno-Hatta Airport has been offered to strategic foreign investors as part of the country's privatization program.
Miskul said that under the future joint venture scheme with a soon-to-be-appointed strategic partner, Angkasa Pura will relinquish most of its aeronautical and non-aeronautical services in the Soekarno-Hatta airport, excluding the air traffic control system, briefing offices and navigation-related services.
Several foreign investors, including French airport authority Aeroport de Paris, Dutch Schiphol Airport management and the American John F. Kennedy Group, participated in the first round of the bid. The final bidding involved only the French Aeroport de Paris and a consortium of Dutch Schiphol Airport management and the British Port Authority.
State Minister for the Empowerment of State Enterprises Tanri Abeng said last week that Aeroport de Paris won the contract to manage and operate the Soekarno-Hatta airport.
He said Aeroport de Paris offered the highest bid of $150 million, outbidding an offer made by a consortium of Airport Schiphol in Holland and the British Port Authority.
Aeroport de Paris made the bid in conjunction with GTM, a subsidiary of another French firm Suez Lyonnaise des Eaux SA.
Tanri said the French port authority will jointly operate the Soekarno-Hatta airport with Angkasa Pura II, in which the latter holds a 51 percent stake.
Miskul, however, contradicted Tanri's statement, claiming that the bidding had yet to be concluded since both parties were still negotiating the terms of reference for the future joint cooperation.
"That's not true. It is not yet finalized. I would have been the first person to know if it was concluded," he said, adding that he had no idea when the bid would be concluded.
Miskul said that in order to offset the possible drastic cut in revenue from managing the Soekarno-Hatta airport, Angkasa Pura II would take over the existing Kijang airport in Tanjung Pinang in Riau and open a new airport in the Kuala Namu district near Medan, North Sumatra.
"We will be looking for a strategic partner for the construction of the new Kuala Namu airport," he said.
Angkasa Pura II currently manages nine airports, including Iskandarmuda in Banda Aceh, Aceh; Simpang Tiga in Pekanbaru, Riau; Husein Sastranegara in Bandung, West Java; Supadio in Pontianak, West Kalimantan; SM Badaruddin in Bandar Lampung and Tabing in Padang, West Sumatra. The other three airports managed by the company are Soekarno-Hatta and Halim Perdanakusuma in Jakarta and Polonia in Medan, North Sumatra.(cst)