Publicly-listed construction company PT Wijaya Karya Bangunan Gedung (WEGE) booked earnings growth in the first quarter of 2020, mainly due to higher cost efficiencies.
WEGE posted a net profit of Rp 81.64 billion in 1Q-2020, up 5.3% (YoY) as opposed to Rp 77.53 billion from last year's first quarter. The company successfully made its costs more efficient, indicated by a 9.4% (YoY) reduction in costs of good sold from Rp 943.49 billion in 1Q-2019 to Rp 855.13 billion in this year's first quarter.
However, the company's revenue also decreased by 4.6% (YoY) from Rp 1.03 trillion in 1Q-2019 to Rp 957.49 billion in this year's first quarter. Despite the sales decline, the company still booked better gross profit than last year after showcasing a gross profit of Rp 102.3 billion in 1Q-2020 as opposed to Rp 88.2 billion from last year's first quarter.
According to WEGE president director Nariman Prasetyo, the company has committed a total of Rp 874.69 billion worth of new contracts on construction projects as of May 2020. However, some of WEGE's clients have postponed the construction of their buildings due to the adverse economic repercussions from the ongoing COVID-19 outbreak.
"Despite the negative impacts of COVID-19, our company is still operating and even growing mainly thanks to the carry-over projects that began last year," states Nariman in a recent press release.
Some of WEGE'S notable new projects for 2020 include the constructions of Bank Indonesia Palangkaraya building, Bank Mandiri Denpasar branch, The Park Mall Kendari (PSA), and the interiors of the Ministry of State-owned Enterprises (BUMN) building. Besides, WEGE has also received orders from the government to construct extension hospitals to accommodate COVID-19 treatments, such as RS Pertamina Simprug Corona, RS Airlangga Surabaya Corona, RSPJ Darurat Corona PT Pertamedika Jakarta, RSCM Darurat Corona, and RS Corona Lamongan.