Intiland Registers Rp1.8 Trillion of Operating Income in the First Semester of 2018

Jakarta (14/8) – Property developer PT Intiland Development Tbk (Intiland; DILD) has managed to maintain the results of its financial performance amid the unfavorable conditions of property market throughout the first semester of 2018. Based on the results of the financial statements ended on June 30th, 2018, the Company posted operating income of Rp1.8 trillion, surged by Rp467 billion or 34.9 percent compared to the income of the same period in 2017 which reached Rp1.3 trillion.

Director of Intiland’s Capital and Investment Management, Archied Noto Pradono, revealed that the surge in the company’s operating income came mainly from increased revenue recognition from the residential area development segment and the sale of non-core land. The revenue’s surge in this segment mainly originated from the recognition of housing units sales in the Graha Natura Surabaya residential area.

“Challenges in the property industry are still quite heavy. Although the government has issued a number of sectoral growth stimuli, the market and consumers still tend to have a wait-and-see attitude to anticipate the development and impact of the democratic party that will be held until next year. We remain optimistic that there will be an improvement in the property market conditions in the second half of this year, even though the growth rate may not be too high,” said Archied further.

Judging based on the development segment, the residential area became the largest contributor to the operating income, which reached Rp1.1 trillion or 61.3 percent of the total amount. This number jumped above 400 percent compared to the achievement of the first semester of 2017 which reached Rp220 billion.

The mixed-use & high rise development segment was the next largest contributor reaching Rp422.2 billion or 23.4 percent of the total amount. This amount increased by Rp106.6 billion or 33.6 percent from the income in the same period last year of Rp316.1 billion.

Archied explained that throughout the six months of 2018, the industrial estate development segment had not contributed to the revenue from industrial land’s sales. This condition is different compared to the same period last year. The company managed to market the Ngoro Industrial Park industrial estate, worth Rp551.1 billion.

“There is a marketing sale of Ngoro Industrial Park industrial estate that is worth Rp45 billion, but we have not yet posted it to the operating income in the first semester of this year,” he said further.

The investment property segment, which is a source of sustainable income (recurring income), recorded a contribution of Rp276.1 billion or 15.3 percent of the total. This amount increased by Rp23.8 billion or 9.4 percent compared to the first half of last year.

The increase, according to Archied, was mainly driven by the increased operating income from rental offices as well as facilities and infrastructure management, including sports clubs. Operating income from facilities and infrastructure management reached Rp139.2 billion, followed by office building rental income of Rp105.8 billion, as well as from industrial estates valued at Rp31.1 billion.

Based on the sources of operating income, sales income or development income contributed Rp1.53 trillion or contributed 84.7 percent of the total amount. Sustainable income or recurring income contributed Rp276.1 billion or 15.3 percent of the total amount.

During the first semester of 2018, the company’s profitability performance underwent slight pressure. The company recorded a gross profit of Rp520 billion and operating profit of Rp173 billion. Compared to the first half of 2017, gross profit dropped by 10.7 percent and operating profit dropped by 38.5 percent.

The company recorded a net profit of Rp142 billion. The amount of this achievement decreased by Rp92 billion or 39.2 percent compared to the first semester 2017 net profit which reached Rp234 billion.

“The decline in profit performance is mainly due to an increase in operating costs and interest expenses,” elaborated Archied.

Considering the results of this achievement, the Company remains optimistic that it can maintain growth performance until the end of the year. In terms of business income, several mixed-use & high rise development projects will be completed this year so the sales results can be included in operating income.

Several new project developments that will be completed this year include Praxis Surabaya. In addition, the company also continues to complete the construction of housing units in a number of residential areas, such as Serenia Hills Jakarta, Talaga Bestari and Magnolia Residence in Tangerang, and Graha Natura in Surabaya.

Anticipating market conditions and the direction of office development, the company’s management maintains a conservative strategic step. The Company will continue to keep up and maintain business performance through an organic growth strategy and by establishing strategic partnerships with investors.

The Company is optimistic that the condition of the national property market will be better in the future. The Company will continue to observe the direction of changes in the property market and investment advertisements. The Company believes that the public demands for property products is still high, which is one of the indicators for the future prospects of the property industry. ***

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