Kawasan Industri Jababeka Tbk. PT

Overview Key strengths Key risks Established industrial estate developer in East Jakarta with a low-cost land bank. Unsustainable capital structure due to ongoing erosion of cash balance at the company level excluding joint ventures (JVs). Recurring income from infrastructure services covers interest costs. Highly leveraged at the company level excluding JVs where liquidity is thin. High reliance on lumpy and cyclical industrial land sales. Project concentration in two key townships. This is due to ongoing erosion of cash balance at the company level, excluding JVs. In our assessment, Jababeka will generate limited free operating cash flow (FOCF) over the next 12-24 months. At the same time, loan amortization and the need to meet cash reserve account requirements under a loan

...The sustainability of Kawasan Industri Jababeka Tbk. PT's (Jababeka) cash flow and capital structure will continue to depend on favorable market conditions. This is due to ongoing erosion of cash balance at the company level, excluding JVs. In our assessment, Jababeka will generate limited free operating cash flow (FOCF) over the next 12-24 months. At the same time, loan amortization and the need to meet cash reserve account requirements under a loan agreement with Bank Mandiri (Persero) PT will erode the company's cash balance, excluding JVs. We project Jababeka's cash balance (excluding JVs) will not change much at the end of 2024. However, a higher loan amortization of US$27.8 million and a US$5 million step-up in the cash reserve account in 2025, as required under the loan agreement with Bank Mandiri, will substantially erode the company's liquidity and financial flexibility. That said, we recognize that Jababeka's Kendal township project up-streamed inaugural dividends of Indonesian...

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