KAEF’s and Indofarma’s Strategy to Fix the Swollen Accounts Receivable

The massive number of Healthcare and Social Security Agency’s (BPJS) unpayable claims is taking a toll on the pharmacy enterprises’ accounts receivable. As Kontan reported on Tuesday (9/17), PT Kimia Farma Tbk (KAEF) and PT Indofarma Tbk planned to execute a risk contingency plan to reduce the damage caused by the BPJS’ deficit. The budget strain is apparent on Kimia Farma’s and Indofarma’s debt to equity ratio (DER) at 126.2 percent and 112.4 percent, respectively. Healthcare and Social Security Agency’s accounts receivable to Kimia Farma has reached 30 percent of Kimia Farma’s total accounts receivable, while Indofarma accounts receivable from Healthcare and Social Security Agency through its sub-holdings has hit Rp 60 billion.

In anticipation to secure the enterprises’ cash flow caused by Healthcare and Social Security Agency’s deficit, Kimia Farma and Indofarma are preparing a contingency plan. Kimia Farma will issue 1 trillion worth of medium-term notes (MTN) II to refinance the debts from banks and purchase PT Phapros Tbk. Meanwhile, Indofarma will restore its two non-pharmacy sub-holdings through a collaboration with Korean Medical Devices Support Center (KMD Indonesia) to strengthen the product assembly line and marketing.