Ciputra looks to get back in black

The Jakarta Post, Jakarta

Developer PT Ciputra Development will build a shopping center in Jakarta and develop two housing estates outside of the capital as it seeks to return to profitability this year.

Corporate secretary Tulus Santoso said on Tuesday the publicly listed company would soon begin constructing a mall in South Jakarta.

"We will begin construction on the mall this year, at a total cost of Rp 900 billion," said Tulus after a shareholders meeting.

The project comes as the company is developing a 60-hectare housing complex in Lampung, called Citra Garden Lampung, which is designed as a first-class housing estate.

It is the first project the company has undertaken outside of Java, according to Ciputra Development CEO Candra Ciputra. "We have begun expanding our business into areas outside of Java to tap the promising investment opportunities."

The complex will cost about Rp 100 billion to develop, Tulung said.

The company is also developing the Citra Garden Cengkareng housing complex on a 20-hectare site in Tangerang, Banten, at a cost of Rp 200 billion.

"We will begin marketing (the development) later this month."

The company is betting on these projects to help jack up its operational revenue. At present, housing estates account for about 60 percent to its total revenue, while shopping centers, hotels, restaurants and other recreational facilities make up the other 40 percent.

Looking ahead, the company, one of the country's leading developers, is targeting full-year revenue to rise by 26.8 percent to Rp 936.3 billion from last year's Rp 738.6 billion.

In 2003, revenue stood at Rp 591.3 billion.

Under its 2005 revenue projection, net profit would reach Rp 548.8 billion, a huge improvement from last year's net loss of Rp 219.3 billion.

In 2003, the company earned Rp 108.2 billion in net profit.

Aside from increased revenue, a deal reached earlier this month could help the company return to the black. Under the deal, Ciputra's creditors stipulated that the company's principal borrowing of US$181.3 million would be converted into shares, freeing Ciputra from paying debt interest, penalties and other arrears.

"This agreement will strengthen the company's financial structure and boost its ability to rake in profits," Tulus said. (001)