The Jakarta Post
Major developer Ciputra Group may revise down its 2015 business targets as sales have been poor so far this year and projects may be postponed amid the weak domestic economy, its executives say.
Ciputra Development (CTRA) and its consolidated subsidiaries Ciputra Property (CTRP) and Ciputra Surya (CTRS), saw their marketing sales fall short of their mid-year target.
CTRA achieved around 29 percent of its sales target of Rp 10.96 trillion (US$821.65 million) as of May, while its high-rise and middle-to-upper income unit CTRP reaped 37 percent of its pre-sales target of Rp 2.6 trillion, the companies revealed in a joint press conference held on Tuesday. CTRS, which mostly works on landed residential in second-tier cities across the country, booked 46 percent of its Rp 2.8 trillion annual target as
CTRA director and corporate secretary Tulus Santoso said the group had initially aimed to launch 12 projects this year ' five of which would be under CTRA, four with CTRS while the remaining three projects would be under CTRP.
'We have acquired the land needed, and most are at the market study or permit process stage. The problem lies in the volatile market. If the market remains weak we might have to postpone launching the projects,' Tulus said.
Nanik J. Santoso, CTRS finance director and corporate secretary, said her company might have to take a second look at her company targets this year as it decided to put on hold one of its projects, Citraland Jayapura in Papua, following permit difficulties.
Another project that was initially planned to be launched this year, Citraland City Losari in Makassar, is also still at the permit stage.
'We will probably have to revise our targets in one or two months, given our very poor marketing sales performance so far as a result of poor office sales, as they have been hit so hard by the economic slowdown,' CTRP president director Artadinata Djangkar told reporters, echoing CTRS' Nanik.
'We previously estimated that office sales would contribute two-thirds to our marketing sales target, but to date most of the sales have come from selling Ascott [serviced apartments], he said, adding that the company had sold the apartment complex ' located within its mega-project Ciputra World 1 in Kuningan, South Jakarta ' to Singapore-headquartered Ascott Group for Rp 835 billion.
CTRP previously aimed for a 48 percent annual increase in net profits to Rp 583 billion, of which only Rp 31 billion, or around 5 percent of the target, had been registered in the first three months of this year.
Parent company CTRA, however, would like to view the glass as half full.
'The country's economy is currently down so there might be a little constraint on demand, but we do believe it will eventually rebound. However we will look at our subsidiaries in one or two months for any potential adjustments,' CTRA president director Candra Ciputra told reporters.
Indonesia's economy slowed to the lowest level since 2009 in the first quarter of this year at 4.7 percent on weak domestic consumer spending ' which makes up over half of the country's economy ' exports and government spending.