Jakarta. Industrial township developer Lippo Karawaci remains bullish about its business prospects this year despite a flat performance in the first nine months of 2017 due to weak purchasing power, the company said on Wednesday (31/01).
The property developer booked Rp 625 billion ($46.75 million) in net income in the first nine months last year, down 6 percent from 2016. But revenues slightly increased to Rp 7.5 trillion, up 1.35 percent from 2016 level.
"We will keep our cash flow management prudent, monitoring costs and implementing a proven capital recycling strategy to increase values for shareholders," Lippo Karawaci president director Ketut Budi Wijaya said in a statement on Wednesday.
"Stronger economic growth driven by ongoing infrastructure projects will continue to drive demand for better quality housing among the rising middle class. With a strong property portfolio that can target all income segments in Indonesia, we're more than well-positioned to profit," Ketut said.
The company's largest revenue contributor last year was its healthcare arm, which earned 57.33 percent of the company's total revenue, followed by its property businesses, which contributed 25.3 percent.
Sales from its large-scale integrated development — the business unit that develops the Meikarta megacity — contributed 13 percent of the revenue.
Meanwhile, revenue from its commercial division that operates retail stores and malls contributed around 7.3 percent of that total revenue.
The rest of the company's revenues came from its business management portfolio.
The company also announced the sale of two Indonesian assets on Wednesday.
Lippo Karawaci sold Lippo Plaza Jogja in Yogyakarta to Lippo Malls Indonesia Retail Trust (LMIRT), a Singapore-listed real estate investment trust.
LMIRT is investing in income-producing real estates in Indonesia that are used primarily for retail and retail-related purposes.
After buying Lippo Plaza Jogja, LMIRT now has 23 malls and seven major retail spaces across Indonesia.
Lippo Karawaci has also sold Siloam Hospital Yogyakarta to its Singapore-based Real Estate Investment Trust, known as First REIT.
First REIT now has 20 properties in Indonesia, Singapore and South Korea.
Both corporate actions were wrapped up on Dec. 22 last year.
With the sale of Lippo Mall Jogja, the company's full 2017 revenue will increase to Rp 579 billion, and its net profit to Rp 237 billion.
The Jakarta Globe is affiliated with Lippo Karawaci via Lippo Group.