BUMN Profits Rise as Danantara Speeds Up Streamlining

Improved performance is the result of a comprehensive overhaul and evaluation of state-owned enterprises’ business models.

JAKARTA — Combined net profit at state-owned enterprises (SOEs) rose 18.4% to Rp214.9 trillion in January–August 2026. Amid the improved performance, the Danantara Investment Management Agency is accelerating efforts to overhaul the structure of state-owned companies and preparing more than 40 strategic projects to strengthen national industry and technology.

Danantara Indonesia Chief Operating Officer Dony Oskaria said combined SOE net profit in January–August 2026 increased by Rp33.4 trillion compared with the same period last year, rising from Rp181.5 trillion to Rp214.9 trillion. The annualised return on equity (ROE) for SOEs also rose by 0.6 percentage points, from 7.4% to 8%.

“That is because the transformation we have carried out is producing results,” said Dony, who also heads the SOE Regulatory Agency, at a C-Suite session during the Danantara Technology Innovation Investment Forum (DTIIF) 2026 in Jakarta on Monday (26 October 2026).

Dony said the improved performance reflected a comprehensive overhaul and evaluation of SOE business models. The transformation includes reorganising revenue sources and composition, tightening cost structures and optimising profits in line with global industry best practice.

Several SOEs reported significant growth in net profit. PT Semen Indonesia (Persero) Tbk, or SIG, led with a year-on-year increase of 427%. PT Pupuk Indonesia (Persero) recorded growth of 233%, PT Danareksa (Persero) 110%, and PT Perkebunan Nusantara III (PTPN III) 55%.

Profit also rose at PT Pertamina (Persero), by 48%; PT Pelabuhan Indonesia (Persero), or Pelindo, by 45%; PT Bank Tabungan Negara (Persero) Tbk, or BTN, by 35%; and PT Bank Mandiri (Persero) Tbk, by 16%.

Improving SOE profitability is important to Danantara because the investment management agency relies on dividends from state-owned companies to fund its investments. Unlike some sovereign wealth funds (SWFs) in other countries, which receive funding from state finances, Danantara is funded by SOE dividends.

In his presentation, Dony explained how Danantara differs from government investment funds, or SWFs, in other countries. While those funds receive investment capital from state finances, Danantara Indonesia obtains it from SOE dividends.

Dony said Indonesia has 1,074 SOEs, many of them operating in the same lines of business. In addition, most function as layers of companies, extracting profits from affiliated businesses.

As a result, he said, building fibre-optic infrastructure for Telkomsel requires cooperation agreements with four companies. The process takes a long time and prices are consequently uncompetitive.

The proliferation of intermediary companies has not ensured good governance. “Fifty-two per cent of the 1,074 companies are making losses. US$2 billion in efficiency has been lost because of layering transactions — that is a fact. And that is not to mention the accumulation of unmanaged debt,” he said.

Because Danantara is built around the management of SOEs, improving their governance is fundamental to the agency’s sustainability. Its roadmap calls for restructuring and consolidation in 2026, developing human resources and corporate culture in 2027, and driving innovation through technology in 2028. Value creation is expected to be established by 2029, with world-class corporations in place by 2030.

The assessment places companies in four categories. First, 200 companies are ready for consolidation. Dony cited five asset-management companies that will be merged into one, while 60 hospitals will be consolidated into a single company. Similarly, 120 hotels will be brought together under one company. These measures are to be carried out by the end of the year.

Second, around 15 companies will undergo financial restructuring. These include Krakatau Steel, Kimia Farma and Garuda Indonesia. Third, 213 companies will be liquidated or closed. Fourth, 208 companies will be divested.

“So we will have fewer than 200 companies under Danantara Indonesia,” Dony said.

As of October 2026, 364 companies had been simplified and their governance made more efficient through restructuring, mergers, divestments and liquidation, Dony said. “We have impaired Rp135 trillion because the accounts have not been properly recorded all this time,” he added.

At least 750 companies will be closed by the end of this year through consolidation, mergers, divestments and liquidation, Dony said, adding that the transformation was not yet complete.

Senior economist Piter Abdullah of the Prasasti Center, contacted separately, said streamlining SOEs was necessary to improve efficiency, professionalism and competitiveness. SOEs’ business scope had become too broad, he said, with parent companies forming subsidiaries and further subsidiaries in fields far removed from their core businesses.

This situation not only limits opportunities for the private sector, Piter said, but also leaves state-owned companies less accustomed to open competition.

He warned that consolidation must be accompanied by stronger professionalism, particularly in appointing directors and commissioners. Appointments should be based on ability and competence, he said, rather than serving as political rewards or creating opportunities for moral hazard.

“Streamlining must be accompanied by greater professionalism. It must be professional, not a matter of placing people in SOEs as a reward when they have no capacity at all to serve as commissioners or directors,” Piter said.

Alongside SOE restructuring, Danantara is preparing more than 40 strategic projects across six priority industry clusters. The projects cover energy; food, health and agriculture; defence, maritime and aerospace; advanced materials; telecommunications and mobility; and other sectors.

Danantara Chief Technology Officer Sigit Puji Santosa said one area of focus was increasing the domestic value added of Indonesia’s data-centre industry. At present, he said, the sector still relies heavily on leasing land and providing basic infrastructure.

“Danantara has more than 40 projects across six industries,” Sigit said.

“Going forward, through Danantara, we will not only have infrastructure and equipment, but will also bring the manufacturing of that equipment into the country,” he said.

Danantara is also targeting development of the semiconductor industry to support domestic data-centre and advanced-technology ecosystems. Sigit said six semiconductor segments were being developed, including controllers and chips for data centres.

The effort is being supported by a strategic partnership with global chip-design company Arm, announced in May 2026. The collaboration focuses on developing artificial-intelligence (AI) chips and training 15,000 Indonesian digital talents to design chips using the Arm ecosystem.

“We have six semiconductor sectors that we will develop in Indonesia with Danantara. One of them includes controllers and chips for data centres,” Sigit said.

In the telecommunications and mobility cluster, priority projects include a data centre with capacity of 1 gigawatt (GW), development of national AI sovereignty, a national e-commerce platform, sovereign cloud, national blockchain, the Garuda Command Centre, national cars and motorcycles, and a traceability and trust system.

The cluster is also expected to develop future technologies, including next-generation batteries, charging equipment, scanning systems, electric-motor traction systems and private industrial 5G networks.

Other projects include computing devices, electric heavy machinery, optical sensors and instruments, and industrial robots.

These projects complement Danantara’s agenda in energy, food, health, agriculture, defence, maritime, aerospace and advanced materials. Through corporate restructuring and technology-industry development, Danantara aims to improve SOEs’ ability to generate profits while strengthening national industrial capacity.