JAKARTA (TheInsiderStories) – Indonesia-based listed property company PT Lippo Karawaci Tbk (IDX:LPKR) reported its 9M 2017 results revenues remained flat at Rp 7.5 trillion (year on year/yoy), according to company statement. Likewise Gross Profit and Net Profit remained flat YoY at Rp3.2 trillion and Rp625 billion respectively.
Revenues from the Residential & Urban Development business Division decreased by 20 per cent YoY to Rp1.9 trillion, mainly driven by the decreased of Revenues from Townships by 32 per cent YoY to Rp957 billion, reflecting the prevailing soft property market in Indonesia during 9M 2017.
Revenue from Large Scale Integrated Developments were remained flat YoY at Rp983 billion as it has recognized revenue from projects under construction, particularly from CBD Meikarta and Millenium Village.
Meanwhile the healthcare business division continues to deliver sustained growth as revenues grew by 12 per cent YoY to Rp4.3 trillion. In patient admissions grew by 6 per cent, while out patient visits up by 16 per cent. Year to date, 8 new hospitals have been consolidated, bringing the total operational hospitals to 31 hospitals with 3,336 operational beds.
In addition, by end of October 2017, Siloam completed its second Rights Issue, raising Rp 3.1 trillion,whereas all 325,153,125 shares offered were fully subscribed. LPKR maintains its majority shareholder with 51.05 per cent ownership, while CVC has increased its ownership to 15.66 per cent.
Revenues from the Commercial division, which consists of Retail Malls & Hotels, were relatively flat YoY to Rp 550 billion. Malls Revenue increased by 9 per cent YoY to Rp 284 billion mainly supported by the increased contribution of Lippo Mall Puri, Buton and Jambi. Hotels & Hospitality Revenue where relatively flat YoY at Rp266 billion.
Asset Management grew by 9 per cent YoY to Rp707 billion, mainly driven by the enlarged asset base and growing fee and dividend income from our two Singapore-based REITS
LPKR’s recurring Revenues continued to grow and recorded a healthy 11 per cent YoY growth to Rp5.5 trillion, contributing 74 per cent of the total consolidated Revenues for 9M 2017.
Meanwhile LPKR also announced the successful completion of sale of two assets to its sponsored REITs in Singapore. Lippo Plaza Jogya (“LPJ”) sale to LMIRT and the sale and leaseback of Siloam Hospital Yogyakarta (“SHYG”) to First REIT which were both completed on December 22, 2017.
With the sale of LPJ, LPKR FY 2017 financials will be boosted up by approximately Rp 579 billion in Revenue and Rp 237 billion in net profit. Further, with the completion of LPJ acquisition, LMIR Trust’s portfolio has been enlarged and comprises 23 high quality retail malls and seven major retail spaces in various locations across Indonesia.
Also, with the completion of SHYG acquisition, First REIT’s portfolio has been enlarged and now comprises 20 properties located in Indonesia, Singapore and South Korea.
LPKR President Director, Ketut Budi Wijaya, stated, Indonesia, for the first time in the last 20 years, has been rated by the three major rating agencies an investment grade rating and this is expected to attract more foreign direct investment flows into Indonesia.
He believes the stronger economic growth prospects driven by the on-going infrastructure projects across the country will continue to drive the demand up for better quality housing among the rising middle-income class in Indonesia. LPKR with its strong portfolio of many properties targeting all income segments in Indonesia, is well-positioned to cater to this growing demand.
More importantly, I am delighted to know that Yogya assets transaction has been completed, as expected by end of 2017, which will enhance LPKR’s revenue and net profit for FY 2017.
These two asset transactions have once again proved the sustainability of LPKR’s asset light and recycling capital strategies which eventually continue to increase the company’s cash flow stream and strengthen the company’s financial position.
“We will keep prudently managing our cash flow, monitoring our costs and implementing our proven capital recycling strategy to increase shareholders’s value,” said Wijaya.