PT Intiland Development Tbk (IDX: DILD) raised funds Rp636 billion (US$45.42 million) after selling its unit shares, PT Surabaya Jasa Media (SJM) which operates National Hospital in Surabaya, East Java - Photo by the Company

JAKARTA (TheInsiderStories) – The property company, PT Intiland Development Tbk (IDX: DILD) raised funds Rp636 billion (US$45.42 million) after selling its unit shares, PT Surabaya Jasa Media (SJM) which operates National Hospital in Surabaya in East Java, said the company on Friday (12/06). The hospital was built in 2010 and has been operating since late 2012.

The director, Archied Noto Pradono said, the company divested its business in the health services sector to focus on its core business as a developer. He adds, the company will use the funds to support its business expansion.

It said, the divestment of the unit was carried out on Dec 3. The seller in this transaction is Intiland‘ subsidiary, PT Grande Family View, which owned 50 percent of SJM’ share. The buyer is PT Istana Mobil Surabaya Indah, which is also an existing of the shareholder of the hospital provider.

In the first half of 2019, the developer’ revenues dropped by 25 percent to Rp1.35 trillion from same period of 2018 worth of Rp1.81 trillion. The bottom line pressured by high interest expenses of Rp145.28 billion and bring net profit lowered by 93 percent to Rp9.36 billion from the same period last year of Rp142.46 billion.

Other director, Permadi Indra Yoga explained, going forward Intiland will continue to improve the company’s performance going forward. This was shown in the last few years, Intiland launched several new project developments in the residential and commercial segments.

Some of the new developments include the South Quarter integrated office area, the mixed-use and high rise development of Fifty Seven Promenade, Praxis and Spazio Tower, Regatta, Graha Golf and The Rosebay apartments.

Previously, Indonesian government through the agrarian spatial planning ministry aimed to reduce investment barriers in the property sector, one of which is the building permit. Minister of agrarian, Sofyan Djalil revealed, the policy aims to support the growth of property industry.

By reducing the barriers, its expecting to attract more investment come to the country. The government will also begin to apply the omnibus law to slice length of investment licensing in the country.

If the rules are considered to be burdensome, then Indonesian president have ability to issue an executive order to override it to remove an obstacles in the investment process.

In the meeting with President Joko Widodo, chairman of the Indonesian Real Estate association, Eric Samola said, he asked the government to immediately issue a tax policy to property sector. Because, so far, the provisions regarding taxation in the property industry such as progressive taxes and retained earnings are unclear.

He wanted the government is able to eliminate progressive taxes and retained earnings and only apply the final income tax. This is important so the developers can do business calmly without any changes in strategy in the company.

On the other hand, deputy at the coordinating minister for economic affairs, Bambang Adi Winarso asserted, the business licensing reform is one of the national priority agenda. The government is committed to ensure the easiness of business registration and licensing obligations in the national and regional levels to encourage economic growth in Indonesia.

For that, he said, the structural reform is needed, not only in simplifying the number and mechanism of licensing in Indonesia, but also accompanied by the harmonization of overlapping regulations.

According to Winarso, in many countries licensing is a function of risk, if the risk is greater then the rules must be stricter. During 2000 to 2015, he revealed, the government had issued 12,471 regulations.

US$1: Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com