BSD eyes Rp 4.2t sales

JAKARTA. Publicly listed property giant PT Bumi Serpong Damai Tbk. (BSDE) aims for Rp 4.2 trillion in sales this year, up 21.7 percent from Rp 3.45 trillion in 2011, on buoyant demand thanks to low interest rates that have made a favorable environment for affordable home loans.

Net profits are expected to increase 10 to 15 percent this year to around Rp 862.5 billion, after a rise of between 77.7 and 90.4 percent, or Rp 700 to Rp 750 billion, in net profits in 2011, Bumi Serpong’s director and corporate secretary Hermawan Wijaya said on Thursday.

“The 2011 net profit was high because of Duta Pertiwi’s acquisition. Book revenue increased to Rp 2.75 trillion,” he told a press briefing.

Demand for houses for residence or as investment instruments has accelerated in recent years as reflected by the rising number of home loans, with banking regulator Bank Indonesia (BI) expressing concerns that the property sector could be overheating.

The low interest rate environment, with the benchmark interest rate at a record low of 6 percent, has encouraged local banks to provide lower rates for house purchasers with the lowest rate at 7.5 percent per annum.

Bumi Serpong, a member of Sinarmas Group conglomerate’s property line, acquired its affiliates — publicly listed PT Duta Pertiwi Tbk (DUTI), PT Sinar Mas Teladan, and PT Sinar Mas Wisesa — early in 2011, expecting to tap the growing opportunities in the property sector to boost revenues.

The company will add 100 to 200 hectares this year to its existing 6,000-hectare land bank — half the size of Paris — in Serpong, Tangerang to meet the growing demand, finance director Lie Jani Harjanto said. Over 4,700 hectares of the land bank were already occupied.

“In the future, our development will not only be in the Greater Jakarta, but we also seek opportunities outside the city, in big cities throughout Indonesia: Surabaya, Balikpapan, Samarinda, Makassar,” Hermawan said.

“The acquisitions are within our three-year time frame,” Hermawan added without disclosing the size of the land bank or property firms to be acquired to realize the company’s plan.

For 2012 alone, Bumi Serpong has set aside Rp 2 trillion for capital expenditure from its cash reserves to finance land acquisition and infrastructure development for houses, offices, malls and other projects.

Residential projects contribute 70 percent to the company’s revenue with the remaining 30 percent coming from its commercial projects.

The firm booked Rp 900 billion in recurring income from rental charges from commercial assets last year with a boost from Duta Pertiwi’s ITC shopping malls. Recurring income is expected to remain constant unless there are new commercial assets, according to Hermawan.

Shares of Bumi Serpong, which has a market value of Rp 20.3 trillion, rose 5.45 percent following the announcement, to close at Rp 1,160 on Thursday. The shares have jumped 18.4 percent since the start of the year.