Can't find what you're looking for?
View all search resultsCan't find what you're looking for?
View all search resultsPublicly listed property developer Plaza Indonesia Realty expects its revenue this year to remain the same as last year as the economic slowdown keeps people’s purchasing power weak
ublicly listed property developer Plaza Indonesia Realty expects its revenue this year to remain the same as last year as the economic slowdown keeps people’s purchasing power weak.
The company, which runs hotels, shopping centers and office buildings, projects it will book around Rp 1.6 trillion (US$120 million) in revenue in 2017, the same as it recorded last year. This estimate is based on the presumption that the property market’s lackluster performance will continue.
“We expect our revenue to remain flat in anticipation of an unpromising property market,” finance director Lucy Suyanto said during a public briefing on Thursday.
The company’s revenue slightly dropped by 1.98 percent to Rp 396 billion in the first quarter of this year from the same period last year.
In line with dwindling revenue, its earnings before interest, tax, depreciation and amortization (EBITDA) over the period also decreased 6.16 percent to Rp 198 billion year-on-year.
The country’s slower economic expansion last year hurt the company’s revenue as it missed its target of 6.3 percent growth, rising instead by only 1.2 percent from 2015.
The slight increase was supported by a 10.17 percent gain in revenue from office buildings to Rp 229.35 billion.
Plaza Indonesia Realty’s chief operating officer, Maria Egron, attributed the hike in revenue to a 20 percent jump in rental rates for shopping mall space and a 5 percent rise for office buildings.
Despite the moderate revenue increase, the firm managed to push up its net profit by 162 percent to Rp 713.52 billion last year from 2015.
Plaza Indonesia Realty currently operates a number of properties in the capital, namely Plaza Indonesia shopping center located near Jakarta’s Hotel Indonesia traffic circle, fX Sudirman shopping mall, the Plaza office tower, Grand Hyatt Hotel and Keraton Luxury Collection Hotel.
As part of its expansion plan for this year, the company will add more facilities in Plaza Indonesia, which along with building maintenance, will take up Rp 82 billion of its capital expenditure. It will also renovate Grand Hyatt Hotel, with the project projected to last two years and require Rp 700 billion.
Furthermore, it will begin in the middle of this year construction of Mayfair Estate and Parklands on 12 hectares of land in Cikarang, West Java, through its subsidiary PT Plaza Indonesia Jababeka. The development will absorb Rp 2 trillion from its capital expenditure over the next two years.
The mixed-use complex will consist of a shopping center, hotels, apartments and an office tower.
Since last year until the first quarter of this year, Plaza Indonesia Realty has bought back 512.2 million shares, of which 213 million shares were obtained last year and the rest will be fully acquired this year.
“A Financial Services Authority [OJK] rule gives companies the opportunity to buy back shares in significantly fluctuating market conditions,” Lucy explained.
As of end of March, the majority shares of Plaza Indonesia Realty totaling 35.71 percent were owned by real estate giant Sinarmas Group. Another 26.03 percent is held by Credit Suisse AG SG, followed by Plaza Indonesia Realty (14.31 percent), MNC Land (8.28 percent), UBS AG Singapore (7.27 percent), while the remainder belongs to the investing public.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.
Quickly share this news with your network—keep everyone informed with just a single click!
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Get the best experience—faster access, exclusive features, and a seamless way to stay updated.