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Major developers report significant increase in total revenues
Major publicly listed property developers continued to report positive results in their revenues last year despite a slowdown in the industry during the year
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Major publicly listed property developers continued to report positive results in their revenues last year despite a slowdown in the industry during the year.
The property developers include Agung Podomoro Land (APL), Modernland Realty, Pakuwon Jati and Lippo Karawaci.
Kiswoyo Adi Joe from Investa Saran Mandiri securities firm said the property industry generally suffered a slowdown last year because of the central bank's latest mortgage regulation and a high interest rate.
'However, developers like Modernland and Pakuwon still expanded despite a challenging year,' he said.
Modernland and Pakuwon Jati recorded 54 and 27.8 percent year-on-year (yoy) increases to Rp 2.84 trillion and Rp 3.87 trillion in total revenues, respectively, while APL and Lippo Karawaci booked total revenues of Rp 5.3 trillion and Rp 11.65 trillion, which rose by 8 and 74.84 percent, respectively.
Modernland's financial report showed the developer, which is working on the Jakarta Garden City (JGC) township in East Jakarta, particularly saw land and residential sales supporting its revenue growth.
The company recorded increased growth in its residential houses sales from Rp 218.06 billion in 2013 to Rp 965.79 billion last year, while its plot of land sales rose by around 17 percent to Rp 1.74 trillion.
Despite the growth, Modernland's net profits plunged by 71 percent on an annual basis to Rp 711.27 billion, due to the absence of gains from acquisitions, which reached a total of Rp 1.74 trillion from acquiring two new subsidiaries in 2013.
This was in stark contrast to Surabaya-based Pakuwon, which saw its net profit more than double from Rp 1.13 trillion in 2013 to Rp 2.51 trillion last year, because of Rp 988.33 billion gains on the purchase of subsidiaries it recorded in its latest financial report.
APL, which operates a number of shopping malls in Jakarta and other big cities in Indonesia, saw its revenue up by 8 percent yoy to Rp 5.3 trillion (US$402 million), with recurring income contributing about 35 percent, a significant increase compared to a 26 percent contribution last year.
According to the company's financial reports, its apartment sales ' the developer's main revenue generator ' slumped by around 28.5 percent to Rp 1.68 trillion.
Despite the drop, APL's net profits rose by 5.76 percent from Rp 930.24 billion to Rp 983.87 billion. Lippo Karawaci's net profit rose by 140.26 percent to Rp 1.06 trillion yoy.
'Developers need to keep expanding their land banks as acquiring a smaller developer with the same market is deemed more profitable than simply buying a plot of land, which is not easy to find amid continuously increasing prices,' Kiswoyo said.
He added that the property industry was projected to continue to slow this year, with a number of property tax revisions expected to be introduced.
