[Updated at 01:23 p.m. on Saturday, Nov 12, 2016 to include net income figure]
Jakarta. Net income at Lippo Karawaci, one of Indonesia's largest property conglomerates, rose tenfold in the first nine months of this year compared to the same period last year, thanks to robust revenue growth from property rentals and a stronger rupiah, which helped turn around the company's foreign-exchange losses.
Lippo Karawaci booked Rp 7.4 trillion ($551 million) in sales in the period, up 10 percent from a year earlier, the company said in a statement released on Friday (11/11). Net income was Rp 665 billion, up from Rp 66 billion a year ago when the company recorded massive foreign exchange losses.
"Overall, the company's revenue is still delivering double-digit growth rates. We will remain focused and consistent in our strategy of recycling capital to grow our business," Lippo Karawaci president director Ketut Budi Wijaya said in the statement.
Ketut added that Lippo Karawaci will continue to increase cost efficiency and expand businesses that generate recurring income, such as malls, hospitals and hotels, to be able to survive a downturn in the property market.
Increases in residential house prices have been slowing this year, due to lower demand. House prices rose 2.7 percent year-on-year in the third quarter from the same period a year ago, slowing from 3.9 percent growth in the second quarter, according to data from Bank Indonesia.
"We believe the property market in Indonesia will begin to recover in mid-2017," Ketut said.
So far this year, Lippo Karawaci saw sales at its residential and urban development division dropping 13 percent to Rp 2.4 trillion, despite new earnings from some flagship projects that are still under construction, such as Millennium Village and Orange County, which are developed by Lippo Cikarang in Bekasi, West Java.
On the other hand, Lippo Karawaci's health-care division continues to contribute to sustainable growth, Ketut said. Its revenue increased by 27 percent to Rp 3.8 trillion, driven by strong growth in the number of outpatients and inpatients at hospitals operated by its unit, Siloam International Hospitals.
Lippo Karawaci's commercial division, which operates malls and hotels, contributed Rp 538 billion to the company's revenue, up 22 percent from a year earlier.
Hans Kwee, an equity analyst at Investa Saran Mandiri, said Lippo Karawaci's well-diversified revenue stream helped shield it from a slowdown in the property market.
"Lippo Karawaci is likely to maintain its double-digit growth by the end of this year," Hans said.
Lippo Karawaci and the Jakarta Globe are both affiliated to the Lippo Group.