Jakarta (1/6) – Property developer PT Intiland Development Tbk (Intiland; DILD) significantly boosted its sales in the fourth quarter of 2019. In Q4 2019, the Company managed to sell its land inventory in the non-core category covering a total area of ca. 40 hectares, worth Rp460 billion. The amount was derived from the sale of two plots of land in East Surabaya as well as a plot of land and buildings in West Surabaya. The Company recorded total marketing sales worth Rp700 billion for the period.
Intiland’s Director of Capital and Investment Management, Archied Noto Pradono explained that in Q4 2019, the Company also undertook a series of strategic steps in an effort to maintain and enhance its business performance. On 3 December 2019, the Company sold shares and receivables to a subsidiary engaged in hospitals valued at Rp636 billion.
“We will use the proceeds from the sale of these shares to repay debt. The rest will be used for our operational and capital needs,” he explained.
In addition, the Company was able to maintain recurring income achievement at a stable level. The Company expects to record recurring income of around Rp600 billion in 2019.
With such a sales performance and the strategic steps it took, the Company’s net profit is projected to soar by more than 20% for FY 2019, while its debt will go down by around Rp300 billion from the figure recorded in Q3 2019.
The property market has not improved
“In general, the property market in 2019 was not encouraging. It is still weak and consumer attitude remains a wait-and-see one, especially involving purchases of high rise property targeting middle- and upper-class consumers,” Archied said.
The Company projects that the property market’s condition in 2020 will not change significantly. However, the Company continues to strive to maintain and improve its sales performance in 2020 by relying on sales from current projects and by launching several new projects.
“The contributor to marketing sales this year will be from the launching of new projects, such as Pinang Apartment in October 2020”, Archied said.
Archied explained that in addition to focusing on developing residential projects, the Company is also expanding, this year, its business in the industrial estate development segment. In 2020, it plans to embark on the development of first phase a new industrial estate project located in Central Java, with a total area of 287 ha, and new area development in Ngoro Industrial Park, Mojokerto, East Java.
“The prospect of developing industrial estates in Indonesia remains very bright. This new industrial estate development project has a highly positive potential, due to its strategic location, being close to toll road and power plant, and supported by more competitive labor costs,” Archied explained.
This expansion, he believed, is in line with the government’s aim to increase foreign direct investment (FDI) to Indonesia. The development of industrial estate projects shall have a positive long-term impact on the Company’s future performance and supports the government’s initiative to attract foreign investment into Indonesia.
In addition to developing apartment projects and new industrial estates, the Company is also preparing a new development plan for the Talaga Bestari project in Tangerang. The new development on 70 ha of land will begin in mid– 2020.
In 2020, the Company has allocated capital expenditures (capex) of Rp1.5 trillion. This will be used to finance ongoing constructions and development of new projects.
Facing the challenges this year, the Company hopes that the government will support the national property sector’s development. One factor expected to be a catalyst for growth is the issuance of regulations that will streamline and simplify licensing processes.
“We hope that the Omnibus Law will have a positive impact on the growth of the property industry in general and the Company’s business,” Archied explained.***