Jakarta (April 27) – Property developer PT Intiland Development Tbk (Intiland; DILD) reported its sales performance results for the first quarter of 2022. The company recorded marketing sales of Rp500 billion, a 61 percent increase compared to the first quarter of 2021, which amounted to Rp310 billion.
Intiland’s Director of Capital and Investment Management, Archied Noto Pradono, explained that the improved sales performance was due to several factors. First, the property market began to recover, and second, sales from the residential and industrial estate segments increased.
“Overall, the property market is gradually improving. Public confidence has started to recover, and purchasing activities have resumed. Market sentiment is growing positively,” Archied explained.
Archied assessed that the property market conditions in the first three months of this year were more conducive than last year’s. Sales of property products have been on an upward trend, in line with increasing consumer demand driven by various government policy incentives.
The residential development segment contributed the largest share to marketing sales, amounting to Rp254 billion, or 51 percent of the total. The next contributor came from sales in the industrial estate segment, amounting to Rp190 billion, or 38 percent. Meanwhile, the mixed-use and high-rise development segment contributed 11 percent, recording marketing sales of Rp57 billion.
Based on its development locations, projects in Surabaya contributed marketing sales of Rp319 billion or 64 percent. The remainder comes from sales of projects in Jakarta and surrounding areas, amounting to Rp182 billion or 36 percent.
Archied revealed that the sales performance of industrial land in the first quarter of this year was quite good. Two developments of the Company’s industrial areas, namely Ngoro Industrial Park in Mojokerto, East Java, and Batang Industrial Park in Central Java, recorded a 139 percent surge in marketing sales compared to the same period last year. Positive sales performance is also demonstrated by several housing projects such as Serenia Hills in Lebak Bulus, South Jakarta, and Graha Natura and Amesta Living located in Surabaya.
“Overall sales performance is still on track, and we continue to strive to achieve this year’s marketing sales target of Rp2.4 trillion. The largest contribution is expected from sales of the housing segment,” Archied further commented.
The Company has prepared several strategic steps to increase marketing sales this year. In addition to boosting sales of inventory units, especially ready-to-move-in products, the Company also plans several clusters and new product developments in ongoing projects, particularly in the housing development segment.
Moreover, the Company continues to strive to boost sales of industrial land and warehouse products. The Company observes that the demand for these properties has been increasing quite rapidly lately.
Specifically for warehouse products, the Company is currently focusing on selling warehouse products from Aeropolis Technopark in Tangerang. In this area, the Company has a portfolio of warehouse products of various types according to market needs.
“This year, the property sector should perform better than last year. This year could be a turning point and momentum for the property market to return to stable growth,” he added.
Financial Performance: Industrial Area Shows Significant Improvement
The company also reported its financial performance throughout the year 2021. Based on the annual financial report ending on December 31, 2021, the business revenue from industrial area development experienced a significant surge of 1,285%, from Rp36.7 billion in 2020 to Rp508.6 billion in 2021. Another segment that saw an increase was housing development by 59%, from Rp432.8 billion in 2020 to Rp688.3 billion in 2021. The mixed-use and high-rise development segment experienced a 58% decrease from Rp1.8 trillion to Rp772.4 billion.
“Business revenue from the industrial area segment increased significantly, mainly due to land sales in the Batang Industrial Park and products from the Aeropolis Techno Park warehouse,” stated Archied. Meanwhile, the decrease in the mixed-use and high-rise development segment was due to significant sales recognition in 2020 from condominiums such as Graha Golf, The Rosebay, and Spazio Tower, which had already been handed over to buyers.
Archied assessed that the overall property sector conditions were not very conducive throughout 2021. Several policy incentives launched by the government in the property sector succeeded in boosting sales, especially in the housing sector, but did not fully impact all property development segments, especially apartment sales.
“The housing segment proved to benefit the most from various incentives launched. However, for high-rise property products such as apartments, the influence has not been significant and has not directly driven purchases or investments,” he further stated.
In total, the company recorded a business revenue of Rp2.63 trillion. The mixed-use and high-rise development segment accounted for the largest contribution, at Rp772.4 billion, or 29.4 percent of the total. The next revenue contributor came from the housing development segment, at Rp688.3 billion, or 26.2 percent. This was followed by the industrial area development segment, contributing 19.3 percent, or Rp508.6 billion.
The company recorded a gross profit of Rp1.03 trillion and an operating profit of Rp665.9 billion, each experiencing a 13 percent and 14 percent decrease, respectively. Meanwhile, the current year’s net profit attributable to the parent entity was recorded at Rp12.2 billion, lower than the 2020 earnings of Rp76.8 billion.
Increase in Recurring Income
Reviewed by its types, business income from development or development income contributed Rp1.97 trillion or 75 percent of the total. The remainder came from recurring income amounting to Rp659.3 billion, or 25 percent of the total.
According to Archied, the Company has successfully strengthened its contribution from recurring income. In 2021, the Company recorded a 12 percent increase compared to the previous year, sourced from office leasing, sports facility management, and facility rentals in industrial areas.
Archied explained that this year is a pivotal year for the Company’s business performance recovery. Several strategic efforts are prepared to anticipate the improvement in property market conditions and the resurgence of public buying and investment interest.
This year, the Company’s main focus is increasing sales, particularly from inventory products or unit stocks in several housing and apartment projects. The Company also continues to strengthen sales penetration in industrial land. The Company has also allocated capital expenditure of around Rp1 trillion, which will be used to complete construction for several ongoing projects.
The Company is also exploring opportunities for project development cooperation directly and by engaging strategic partners. Development and launching new projects remain one of the business growth strategies, but they are executed very carefully and by observing market niches, potentials, and absorption capacities.***