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KIJA 1H18 Financial Highlights.

PT Jababeka Tbk ('KIJA') recorded a total revenue of Rp 928 billion for the first half of 2018, a decrease of 43% compared to the same period of 2017. The Company's Land Development and Property pillar saw revenue decrease 61% to become Rp 226 billion as per 1H18, mainly because of a reduction of 82% in sales of land plots and land with industrial buildings due to general weakness in the industrial property market and overall tougher market conditions.

Furthermore, 2Q18 itself was also affected by the Islamic fasting month and Eid celebrations, which reduced the second quarter to effectively 2 months. At the same time, residential and commercial property sales increased 124% as Cikarang continues to prove itself as an ideal location for living and commercial facilities and activities.

The Infrastructure Pillar revenue decreased 33% to become Rp 648 billion, which was mainly caused by the Reserve Shutdown status of Bekasi Power's (BP) power plant that caused a decrease in sales to PLN, although already much better compared to 1Q18 proven by an 81% increase in revenue QOQ as PLN requested more electricity during the second quarter of 2018. KIJA's Leisure and Hospitality pillar posted a 5% decrease in revenue to become Rp 54 billion in the first half of 2018.

Recurring revenue from the Infrastructure pillar contributed 70% to total revenue in the first half of 2018, compared with 60% in 1H17 as the contribution from Land Development and Property fell more than the recurring portion from Infrastructure.

The Company's gross profit decreased 43% to become Rp 401billion in 1H18, in line with the reduction in revenue. At the same time, KIJA's consolidated gross profit margin for the first half of 2018 was recorded at 43%, compared to 39% in 2017. This increase occurred because of the higher gross margin from Infrastructure, which increased from 24% in 1H17 to 37% in 1H18, mainly because of a higher margin from the power segment, whereas Real Estate and Property saw its margin stay flat at 63% in both 1H17 and 1H18.

KIJA recorded a net loss of Rp 250 billion in the first half of 2018 compared to a net profit of Rp 219 billion for the same period in 2017. A key reason for this reduction is the overall weak Land Development and Property sales contribution, which have negatively affected the Company's gross profit and subsequently net income.

In addition, the impact of foreign exchange (forex) gains and losses is substantial as in 1H17 KIJA recorded a forex gain of Rp 29 billion compared to a forex loss of Rp 235 billion in 1H18. These amounts are the sum of financial forex gains/losses and gains on our hedging contracts, as well as operating forex gains and losses, which can be found in the financial income/expense section and other income/expense of our 1H18 financial report.

The Company's EBITDA reached Rp 280 billion, the majority of which was derived from the Infrastructure pillar with Rp 242 billion.

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Publication:The President Post (Jakarta, Indonesia)
Date:Aug 31, 2018
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