Indonesia Market Summaries 16 April 2013 Part 1

Bumi Resources recorded sales volume increase of 20.6% in 1Q13

In Q1, BUMI claimed that they have sold 19.1mt of coal which shows a 20.6% growth yoy supported by a 23.7% yoy growth in coal production. The company claimed that this is their highest Q1 production since BUMI was started since heavy downpour usually disrupts production early in the year. BUMI also managed to lower their stripping ration from 10.8x to 9.5x this year. However, BUMI still suffers from ASP plunge as they recorded a 1Q13 ASP of USD73/ton decreasing from USD92.7/ton last year. BUMI claimed that they expect a USD75/ton ASP this year; thus, they are relying more on sales volume to improve their performance for the year. (Kontan)

Comments: Indonesia Market Summaries for BUMI in the first quarter of 2013, BUMI’s sales volume is 25% to our full year forecast vs the usual 20-22%, making the performance a strong one in our view due to inventory carry over from 4Q12 sales.

Coal production is expected to pass 400mt in 2013

The national coal production this year is expected to pass 400mt, 4.4% growth yoy, as production already reached 93mt in Q1. The national coal producer association (APBI) claimed that rising demand from Japan, South Korea, Thailand, and Taiwan will help boost production. Low rank coal production already grew by 20% due to demand from local power plants. APBI stated that coal ASP is still at USD88/ton as of April 2013, but he is confident that it will reach USD100/ton by the end of the year. (Bisnis Indonesia)

Summarecon will build a new township in Bandung

Aside from the township they are planning to build in the Greater Jakarta area, SMRA is also planning to build a new one in Bandung with an area of 200ha. The exact location is also yet to be disclosed but it is currently in the land clearing process and sales will start in 2-3 years. The target market will still be mid-to-upper income segments. As Indonesia Market Summaries posted, the SMRA has prepared more than Rp1tn for the land acquisition in both locations. (Kontan)

Ciputra Development expects 1Q13 revenue growth of 170%

For Q1 this year, CTRA is expecting revenue of Rp1.5tn which is 170% higher compared to the same period last year supported by landed housing sales. In 1Q13, CTRA launched two new residential projects in Medan and Semarang with an area of 100ha each. The company targets sales of Rp1.2tn from the two projects, where the company invested Rp200bn for the construction. (Bisnis Indonesia)

Indonesia Today's Market and Business April 11 2013

Realization of capital spending reached 5.6% in 1Q13

The realization of government’s capital spending only achieved 5.6% of Rp184.4tn targeted in APBN 2013. Furthermore, this realization figure is lower than the same period of 2012 which reached 6.71%. The head of government’s fiscal policy, Bambang P.S. Brodjonegoro, mentioned that if the government could optimize the disbursement of capital post, then there would be an additional contribution of 0.2ppt – 0.3ppt to economic growth (Bisnis Indonesia).

Kawasan Jababeka prepares Rp9tn to develop CBD

KIJA is preparing Rp9tn to develop a CBD on a land of at least 30ha wide where the first phase will be to develop a residential estate on a 16ha land within the next 12 years with a total investment of Rp4.5tn. Meanwhile, the development of the CBD itself will take approximately 20 years in 2-3 phases. KIJA is currently studying the feasibility of the project where the result is expected to be out by Q1 next year. Aside from offices, the CBD will also have shopping centers, apartments, recreational areas, and town house. (Bisnis Indonesia)

Cikarang Property prices boost as new toll access is opened

For Indonesia Market Summaries news, KIJA and LPCK, in their partnership, has opened a new toll access at KM34.7 of the Jakarta-Cikampek toll road to the residential and commercial areas in Cikarang. The two companies have allocated Rp300bn for land clearing and construction for the toll access where each company pays 50% of the total cost. With the new toll access, KIJA and LPCK expect land ASP to increase by at least 20%. (Kontan, Bisnis Indonesia)

Summarecon gained Rp600bn loan for working capital

SMRA received an Rp600bn working capital loan from Bank Mandiri with a single digit interest rate and a tenor of 7 years. The company was seeking loan earlier this year to finance the development of their hotels in Bali which is expected to cost Rp700bn. Aside from hotel, SMRA is also eyeing for a township project which they claimed to be their expertise. (Bisnis Indonesia)

Agung Podomoro to payback Rp400bn debt

APLN is planning to pay off their Rp400bn syndicated debt using the proceeds from the issuance of their Rp2.5tn bond. The company expects the bond to be issued by June 2013. (Bisnis Indonesia)

Ciputra Development reported a consolidated 1Q13 marketing sales of Rp2.9tn

CTRA reported a consolidated 1Q13 marketing sales of Rp2.9tn which is 28.2% of their full year target. Outstanding marketing sales performance is shown by CTRS who book Rp1.3tn or 41.4% of their full year target. On the other hand, CTRP is still lagging and only booked Rp142bn marketing sales which is 8.1% of their full year target. Product mix wise, contribution still come mostly from houses (56%) and shop houses (24%). Meanwhile, geographic wise the largest contribution comes from Sumatra (37%) and the Greater Jakarta area (32%). (Company release)

Consumers’ confidence remains stable along Mar13

BI’s consumer confidence index was stable last month than Feb13, as the index was unchanged at 116.8. The relative steady number was due to higher optimism among consumers about the economic condition for the next 6 months despite the index for current economic condition eased owing to lower confidence about job availability (Bank Indonesia).

Palm Oil Reserves in Malaysia Drop Most in Two Years but CPO price still drop 1%

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell the most in more than two years to a seven-month low in March as exports gained for the first time in five months, according to official data. Inventories shrank 11 percent to 2.17 million metric tons last month from 2.44 million tons in February, the steepest monthly drop since January 2011, the Malaysian Palm Oil Board said today. The decline exceeded the median estimate for a 7 percent drop to 2.27 million tons in a Bloomberg survey. (Bloomberg)

Comment: although after the announcement of palm oil Inventory decrease higher than consensus expectation (which should be bullish factor on CPO price), the CPO price decreased by 1%. Indonesia Market Summaries assume to this matter as a sign that CPO price would decrease further in 2H13 when CPO production ramp up and palm oil inventory back to increasing trend.

Property Sectors April 10 2013

Ciputra Property acquired 7.2ha land in Puri, West Jakarta

It was announced in the local news today for Indonesia Market Summaries that CTRP has completed the acquisition of 7.2ha land in Puri, West Jakarta with a transaction value reaching Rp1tn or Rp15mn/sqm. The company has yet to disclose the planned project in the area or its cost, but they will most likely build a high rise project. (Investor Daily)

Comments: Land ASP in Puri Indah is approximately Rp17-20mn/sqm, thus, the deal in our view is a good one for CTRP as the company is paying at a discount.

Kawasan Jababeka to diversify more into residential and commercial projects

Through its subsidiary, PT Graha Buana Cikarang, KIJA is planning to be more aggressive in developing residential and commercial projects. KIJA will allocate 600ha out of 5,600ha for their residential and commercial projects. The company just launched their Beverly Hills cluster, which is a homestay concept project, last month with an ASP of Rp2.3bn where one unit has 11 rooms. The cluster is currently sold out, but KIJA will launch its second phase this month with an ASP of Rp2.3-3.0bn. This year, KIJA expects revenue from residential and commercial to be more than half of the company’s total revenue last year of Rp1.4tn. (Kontan)

Super luxurious property ownership by foreigners is expected to be allowed

Property ownership by foreigners in Indonesia is starting to get attention from the government as regulation revisions regarding it is starting to be discussed. The Indonesia Market Summaries noted that The Public Housing Ministry (Kempera) suggested three revisions to the regulation:

1. Flats ownerships are limited to 750sqm in size and at least Rp5bn in value;
2. For landed housing, an area of at least 400sqm and value of at least Rp10bn;
3. Ownership timeframe to be changed from 25 years to at most 50-60 years. Therefore, only the premium apartments and landed housing are allowed to be owned by foreigners. (Kontan)

Earnings of PT Ciputra Development Tbk Up To 71.94%

Property developer PT Ciputra Development Tbk scored net profit growth of 71.94% to Rp 849,38 billion in 2012 from the previous year's performance Rp. 494,01 billion.

From the amount of Rp. 589,1 billion attributable to owners of the parent entity while Rp. 260,28 billion attributable to non-controlling interests.

The Earnings per Share is the company rose to Rp. 39,- per share from the previous year to Rp. 21,- per share.

Based on the company's consolidated financial statements as of 31 December 2012 which is published today, Thursday (28/03/2013), net profit growth was driven by the performance of revenues that reached Rp 3,32 trillion, growing 52.53% from the previous year Rp 2,18 trillion.

Net Profit Margin of PT Ciputra Development Tbk (CTRA) rose 12.72% to 25.56% in 2012 from the previous year 22,68%.

Cost of sales and direct expenses reported during the period rose 45.87% to Rp. 1,67 trillion from the previous year Rp. 1,14 trillion.

Meanwhile, the company's pre-tax profit rose 66.36% to Rp. 1,03 trillion from the same period in 2011 amounted to Rp. 618,78 billion. (Bisnis Indonesia)