Ciputra expects to open 10 hospitals in 5 years

JAKARTA. Major property developer Ciputra Group intends to open up to 10 hospitals within the next five years and once in full swing, the new business is expected to contribute 10 percent to the Group’s overall earnings.

PT Ciputra Development (CTRA) director Tulus Santoso said the company would start the construction of the second Ciputra Hospital at the company’s residential estate, CitraGarden City, Jakarta, in the second half of the year.

The first hospital has been operating since last year at the company’s Citra Raya residential area in Tangerang.

Ciputra Development is a unit within the Group. It is the key shareholder in the Group’s other units, PT Ciputra Property (56.25 percent) and PT Ciputra Surya (62.66 percent).

“The hospital will take approximately 1.5 years to complete,” Tulus said, adding that the developer would operate the hospital independently.

He added the developer aimed to construct between five and 10 hospitals in the next five years, or in other words, one to two new hospitals per year. “Each hospital will require an investment of roughly Rp 150 billion,” he said.

“After five years, we expect our hospital business to contribute approximately 10 percent to our earnings,” he added.

In the first half of the year, Ciputra Development earned 87.8 percent more year-on-year, or equal to Rp 2.4 trillion in total revenues. Net profits rose 152.7 percent annually to Rp 669.5 billion.

Tulus added that the developer had entered the hospital business to extend the variety of facilities present at its residential estates, noting that each hospital would have at least 100 beds.

“This is also our way of capitalizing on our available land,” he explained.

Besides hospitals, Ciputra Development also plans to launch six major residential projects in Gowa, Cilegon, Banjarbaru, Balikpapan, Cirebon and Batam.

Ciputra Development’s subsidiary, PT Ciputra Property (CTRP) will remain focused on selling off The Suites, its upper end apartment adjoining Ciputra World 2, a superblock replete with a hotel, mall and office units.

Tulus added the Group had spent roughly half of the Rp 800 billion of capital expenditure disbursed during the first half of the year to further the completion of it superblock project.

The Group has allotted Rp 2 trillion as its 2013 capital expense budget.

“The remaining Rp 1.2 trillion will continue to go toward completing Ciputra World 2, in addition to Ciputra World 1, hospital and budget hotels, as we move forward into the second half of the year,” he went on.

He added Ciputra Property would also be in charge of the construction of four budget hotels by either the end of this year or the start of the next.

“Each budget hotel will require an investment of approximately Rp 50 billion,” he said.

Ciputra Property has experienced a 173.5 percent annual rise in revenues to Rp 844.5 billion, while net profits went up by 140.2 percent year-on-year to Rp 261.4 billion. (The Jakarta Post)