Rimo International Swings to Profit After Wholesale Move Into Property

Rimo's South Hills apartment project in Kuningan, South Jakarta. (Photo courtesy of Rimo International Lestari)

By : Sarah Yuniarni | on 10:23 AM July 19, 2017
Category : Business, Corporate News

Jakarta. Rimo International Lestari, formerly the owner-operator of the Rimo chain of department stores, posted its first quarterly profit just four months after transitioning into a property developer, the company said in a statement on Tuesday (18/07).

Rimo, owned by Benny Tjokrosaputro, undertook a rights issue in March and raised Rp 4.1 trillion ($308 million) from selling 40.59 billion new shares to investors, equivalent to around 86 percent of its enlarged equity.

The proceeds from the rights issue were spent on acquiring almost all the shares — 99.98 percent — of property developer Hokindo Property Investama.

The acquisition worked immediately to turn around Rimo's business, swinging it to profit in the first quarter of this year.

The company's consolidated financial report now shows it booked Rp 52.75 billion in net income in the first three months of this year, a swing from Rp 10.24 billion in losses in the corresponding period last year, it said in a filing to the Indonesia Stock Exchange (IDX) on Tuesday.

The company also increased its revenue 24 times to Rp 77.07 billion from Rp 3.13 billion.

Hokindo builds apartments, malls, residential complexes and integrated townships, mainly in Jakarta. It also has some property assets in Banten and Kalimantan.

Since acquiring Hokindo, Rimo now has 10 property subsidiaries.

In the future, Rimo may still seek to revive its retail business, transforming its department stores into retail hardware specialists.

Rimo was established in 1987 and ailing before receiving the fresh capital injection from the rights issue.

With its war chest refilled, the company can now afford to set aside Rp 1.5 trillion for expansion, by acquiring new land, developing infrastructure and ramping up its working capital.

Rimo is currently working on three property projects at the same time, all of them being handled by its subsidiaries: an apartment tower in Kuningan, South Jakarta, called South Hills that will be jointly operated with property developer Metropolitan Kuningan Properti; a complex of 44 shophouses — known as "ruko" in Indonesia — in Banjarmasin, South Kalimantan; and a 500-hectare low-cost apartment complex in Pontianak, West Kalimantan — part of its effort to support the government's one million houses project.

Rimo's shares, traded under the RIMO code, soared 15.76 percent to Rp 294 per share on Tuesday.

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