FINANCIAL PERFORMANCE ANALYSIS OF CONSTRUCTION COMPANIES (SOE) LISTED ON THE INDONESIA STOCK EXCHANGE BASED ON SOE MINISTERIAL DECREE (KEP-100/MBU/2002) AND ECONOMIC VALUE ADDED

• Main Author: Wisdayati, Annisa
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/68483
• Institution: Institut Teknologi Bandung

The rapid development of construction industry has an impact on the rising need for construction enterprises, especially state-owned enterprises (SOEs), which operate on many construction projects in Indonesia. Operating large projects necessitate large quantities of capital. This condition affects the financial condition of state-owned construction enterprises. Therefore, financial performance is a major concern for companies’ sustainability and the construction sector in Indonesia in executing their projects. This study was conducted to determine the financial health of SOEs based on the Ministerial Decree on SOEs, KEP MEN 100/MBU/2002, which was used to measure the financial performance of these enterprises. There are three categories of financial health: healthy (AAA, AA, A), less healthy (BBB, BB, B), and unhealthy (CCC, CC, C). However, financial ratio analysis alone is insufficient. Companies and investors must examine the risks associated with their investments. Based on this, Economic Value Added (EVA) analysis is used to quantify the added value generated by a company by reducing the cost of capital resulting from the investment made. The scope of this study is limited to company’s performance in 2015–2019, using PT Adhi Karya, PT PP, and PT Wijaya Karya as research samples, by evaluating the financial records of the holding companies. The results of the study indicate that PT PP was in a healthy financial condition (A) from 2015–2018 but less healthy (BBB) in 2019; whereas PT Adhi Karya’s financial condition was unhealthy (BBB or BB) during the entire years. During those years, PT Wijaya Karya’s financial health condition fluctuated from healthy to unhealthy (A or BB). PT PP did not generate Economic Value Added over 2015-2019 due to the high cost of capital generated. However, PT Adhi Karya and PT Wijaya Karya generated fluctuating EVA during this period. Construction companies must consider the proportion of capital and capital expense when operating their businesses.