Tue, 12 Oct 2010
From: The Jakarta Globe
By Faisal Maliki Baskoro
Jakarta. Lippo Karawaci, the nation’s biggest property company, projected 35 percent growth in net profit this year to Rp 524 billion ($58.69 million), following a healthy financial performance in the third quarter, it said on Monday.

The country’s improving economy has supported the company’s residential and township sales, lifting Lippo Karawaci’s third-quarter profit to Rp 127.7 billion, a 29 percent gain over the same period last year.

Its revenue reportedly grew at an annual 27 percent rate from June to September, and totaled Rp 765.8 billion.

“This is a strong quarter for our residential division,” said Ketut Budi Wijaya, Lippo Karawaci’s president director.

“The increase in the residential sales is largely due to per capita income rising to more than $3,000 and a large demand for exclusive housing.”

Lippo Karawaci said its residential and township division’s year-to-date revenue was up 47.6 percent to Rp 352.7 billion.

Its hospitals division revenue through nine months was up 12.5 percent, while its mall business increased by 15 percent.

Meanwhile, its asset management income increased 63 percent.

The company’s recurring income constituted 52 percent of its total revenue for the quarter.

The company expects strong fourth-quarter results, and is projecting revenue to increase by 17 percent to Rp 3 trillion and profit to increase by 35 percent to Rp 524 billion from 2009 figures.

“Our strategy is to intensify every line of our business, but we’re still expecting our residential division to be the main driver for the fourth quarter,” Ketut said.

“We’ve just launched new towers in our townships in Kemang Village and St. Mortiz. We’re hoping that they can boost our fourth-quarter performance.”

In the long term, the company also plans to increase its assets to Rp 8 billion within the next five years from Rp 3 billion currently, and is planning to build 20 new hospitals and 15 new malls.

“We need around Rp 1 billion in capital expenditure for the next five years to increase our assets. We need around $450 million to build the hospitals and $500 million to build the malls,” Ketut said.

Ketut said Lippo Karawaci would use internal funding and bank loans to finance some of the expansion, but would rely heavily on selling and leasing back some its properties to generate capital.

Cece Ridwanulloh, an analyst from Ekokapital Sekuritas, said Lippo Karawaci’s strong third-quarter performance would likely continue through the end of the year.

“It’s very likely that Lippo Karawaci will achieve its target this year. Their property business is very diverse, but they should focus on the residential division, which is performing well,” he said.

“Lippo Group is expanding, and that will boost its companies’ performances, in particular Lippo Karawaci.”

Mohammad Alfatih, an analyst from Samuel Sekuritas Indonesia, said it was likely Lippo Karawaci would meet its projections for the year because the property sector was usually boosted by increasing consumption in the fourth quarter.

He said Lippo Group shares should consolidate at about Rp 600 after increasing around 40 percent in the first three quarters of the year, rising to about Rp 700 from Rp 500.

The Jakarta Globe is affiliated with Lippo Group.




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