Ciputra lowers this year's profit target

JAKARTA (JP): PT Ciputra Development, one of the major publicly listed property developers, has lowered its net profit target for 1997 to Rp 156.36 billion (US$56.85 million) from Rp 163 billion due to the rupiah's sharp depreciation against the U.S. dollar.

"The current rupiah depreciation would cut down profit by about Rp 15 billion this year," Managing Director Harun said yesterday.

He said potential loss from the rupiah's depreciation would be relatively small for the company, with 50 percent of loans in the U.S. dollar.

"Our dollar debt is naturally hedged by the revenue in dollar too," he told an investor forum held in conjunction with a two- day capital market conference and exhibition which opened Thursday to commemorate the Capital Market Authority Agency (Bapepam)'s 20th anniversary.

The Indonesian rupiah has been under speculative pressure recently following the devaluation of the Thai baht and Philippine peso early last month.

Rupiah has lost about 20 percent this year from Rp 2,398 early January to Rp 2,880 yesterday. This month alone, the currency lost about 9 percent.

Ciputra Development, the developer of several housing and office building complexes in Jakarta and Surabaya, booked a net profit of Rp 45.24 billion in the first semester this year, a 26 percent increase from Rp 35.70 billion in the corresponding period last year.

Harun said the net revenue in the January-June period this year rose to Rp 215.01 billion from Rp 191.71 billion in the same period last year.

"Though the rupiah is depreciated, we are quite sure we can reach our target this year," he said yesterday.

In May this year, Ciputra Development through its subsidiary PT Ciputra Surya, started developing Citra Harmoni housing project in Sidoardjo, Surabaya with a total investment of Rp 2 trillion (US$833.33 million) over 10 years.

"The development of Citra Harmoni is done in stages with total investment for the first stage about Rp 200 billion," Harun said, adding the company would develop 1,200 medium houses at a cost of between Rp 12 million and Rp 90 million.

He said Citra Harmoni in Sidoardjo would cater for the growing number of employees working in Sidoardjo industrial estates.

Harun said Citragran would be developed in stages within eight years with the first stage costing about Rp 300 billion.

He said Citragran's first stage -- on 45 hectares -- would develop 238 houses with a selling price of between Rp 250 million and Rp 1 billion.

PT Ciputra Development plans to expand its housing business to Medan, in Sumatra, Banjarmasin and Balikpapan in Kalimantan, Ujungpandang in South Sulawesi and Semarang in Central Java to cater to the growing housing demand in the country's major cities.

Harun said expanding into those cities was part of the company's long-term program.

He said the cities were chosen as part of the expansion program because they did not yet have sufficient infrastructure facilities.

"We do not want to enter Denpasar, for example, because the city already has good infrastructure," he said. (aly)