The year 2015 was a bleak one, overall, for Indonesian businesses as economic growth touched the six-year low of 4.79 percent (y/y), dragged down by persistently dropping commodity prices and weak global growth. Meanwhile, internally, Bank Indonesia remained committed to its high interest rate environment in an effort to combat inflation, support the rupiah exchange rate, and curtail the current account deficit. This external and internal context led to weakening purchasing power in Indonesia, hence household consumption growth slowed.

It also led to mixed corporate earnings of listed Indonesian companies. Some still managed to post growing net profit (as the 4.79 percentage point GDP growth is still strong compared to growth posted in advanced economies, and various companies successfully managed to cut operational expenses and/or come up with innovative products or services), while others were plagued by falling net profit.

Below we present the list of top 20 Indonesian companies (listed on the Indonesia Stock Exchange) that posted the highest net profit over full-year 2015.

Top 20 Most Profitable Listed Indonesian Companies in 2015:

Company Sector Net Profit 2014
 (in IDR trillion)
Net Profit 2015
 (in IDR trillion)
Y/Y Growth
Bank Rakyat Indonesia Banking         24.23         25.41       4.89
Telekomunikasi Indonesia Telecom         21.27         23.32       9.60
Bank Mandiri Banking         20.65         21.15       2.41
Bank Central Asia Banking         16.51         18.04       9.23
Astra International Automotive         22.13         15.61     -29.45
HM Sampoerna Tobacco         10.18         10.36       1.79
Bank Negara Indonesia Banking         10.83          9.14     -15.60
Gudang Garam Tobacco          5.43          6.45      18.78
Unilever Indonesia Consumer          5.93          5.85      -1.26
Perusahaan Gas Negara Gas          8.85          5.56     -37.19
Semen Indonesia Cement          5.57          4.53     -18.72
Indocement Tunggal Prakarsa Cement          5.29          4.36     -17.70
Indofood Sukses Makmur Food          5.23          3.71     -29.07
Indah Kiat Pulp & Paper Pulp & Paper          1.57          3.07      95.52
Sarana Menara Nusantara Telecom          1.10          2.96     169.85
Indofood CBP Sukses Makmur Food          2.57          2.92      13.56
United Tractors Trucks          4.83          2.79     -42.21
Bank Danamon Indonesia Banking          2.68          2.47      -7.96
Bumi Serpong Damai Property          3.99          2.35     -41.13
Adaro Energy Coal          2.28          2.08      -8.62

Various sources

Some conclusions can be drawn when studying this table:

(1) Indonesia's banking sector remains lucrative. There are five banks within the top 20 of most profitable listed Indonesian companies in 2015 (and four banks within the top seven). Three of these banks still managed to post rising net profit. Meanwhile, Indonesia's banking sector is far from being saturated as Indonesia (especially the eastern region) is highly "under-banked". According to the World Bank, only 36.1 percent of Indonesia’s adult population owned a bank account in 2014 (this also reflects low financial literacy among the Indonesian population). Moreover, with lending rates expected to be cut soon (to single-digit figures) and accelerated economic growth, both personal and corporate credit demand should rise.

The tobacco sector has also managed to maintain profit growth despite the higher tobacco tax as well as the birth of other anti-smoking measures implemented by the Indonesian government, showing that Indonesian smokers remain faithful to their "death stick". According to the World Health Organization (WHO), there were 95 million smokers, or 37 percent of the total population, in Indonesia in 2015 (and - alarmingly - 20 percent of the Indonesian youth are smokers).

Meanwhile, those companies engaged in the mining, cement and property sectors experienced a tough year with red numbers. Mining is clearly plagued by low global commodity prices (and that explains why Indonesia's big coal miners are expanding into the power generation sector), while cement and property companies have shown weak earnings due to slowing growth in Indonesia's property sector amid falling purchasing power. The cement sector, however, may rebound soon if government-led infrastructure development gains momentum.

(2) Indonesia's state-controlled companies continue to play a key role in the economy. Not only the fully state-owned companies dominate the economy (for example Pertamina and Perusahaan Listrik Negara, abbreviated PLN) but  also state-controlled companies that are listed on the Indonesia Stock Exchange play a decisive role. In six companies within the top 11 (table above) the central government owns a majority (+50 percent) stake. This has both positive and negative consequences. Those companies closely related to the government will be the first to benefit from the government's push for economic development. For example, state-controlled construction companies such as Waskita Karya, Wijaya Karya, and Adhi Karya are more easily awarded contracts within the government's infrastructure development program and for these construction companies it is easier to obtain loans from the state-controlled banks. As such, investors should take a look at these state-controlled listed companies because earnings should rise. On the other hand, this context limits growth opportunities for the fully privately-held sector.