PROPERTY developer Sinarmas Land : A26 -1.03%&rsquo s net profit for the half year ended Jun 30 fell 14.1 per cent to S$109.5 million, from S$127.5 million in the corresponding year-ago period, it announced on Friday (Aug 11).

 

This was despite revenue increasing 16.9 per cent year on year (yoy) to S$592.5 million, from S$506.8 million.

 

The revenue climb was attributed to higher sales of commercial and residential land parcels in BSD City and Kota Deltamas in Indonesia, as well as an increase in revenue from residential units, apartments and commercial shophouses. 

 

The decrease in net profit comes as cost of sales increased 83 per cent to S$220.1 million, from S$120.3 million.

 

In line with this, gross profit decreased 3.7 per cent to S$372.4 million, from S$386.5 million the year before. 

 

Gross profit margin therefore also dipped to 62.9 per cent from 76.3 per cent in H1 FY2022, due to the sale of land parcels with a lower profit margin.

 

Total operating expenses increased 11.6 per cent yoy to S$151 million, from S$135.3 million, due to higher promotion and marketing expenses incurred on higher revenue from the Indonesia segment, as well as higher salaries and related expenses.

 

Meanwhile, the group&rsquo s share of profit from joint ventures returned to the black at S$15.8 million, compared to a S$11 million loss in the year-ago period. This was due to higher sales of completed residential and commercial units, as well as higher recognition of realised profit on sales of land parcels in certain joint ventures in Indonesia.

 

Earnings per share for the period was S$0.0257, down from S$0.03.

 

The mainboard-listed group is cautiously optimistic about its business outlook, as its Indonesian-listed subsidiaries have posted steady performances. 

 

It noted that its newest investment property, the Thamrin Nine Autograph Tower, will augment recurring income. 

 

The group will continue to explore new investment opportunities outside Indonesia, ranging from real estate development to investment properties. 

 

SGX-listed, Indoesia-based Sinar Mas Land has launched a landed cluster housing project Welton in Greater Jakarta.

 

The development is a joint venture with Mitbana, a joint venture of Mitsubishi Corporation and Surbana Jurong.

 

The project, Welton, occupies a site of seven hectares. It will have 291 units of three kinds, each taking up land area of 98 to 285 sqm.

 

Prices start from IDR2.5 bil, or $225,000.

 

Welton is part of Hiera, a 108-hectare mixed-use development in Hiera, within the BSD City, formerly referred to Bumi Serpong Damai.

PROPERTY developer Sinarmas Land : A26 -1.11%on Monday (Feb 27) reported earnings of S$216.1 million for the second half of FY2022, more than triple its net profit of S$60.1 million in the corresponding period for FY2021.

 

This took the group&rsquo s full-year earnings to a record-high of S$343.6 million versus S$145.7 million in FY2021.

 

Revenue for the full year also rose 48.8 per cent to another high of S$1.3 billion. Revenue for H2 was also up 54 per cent to S$824.8 million from S$535.7 million. 

 

The group said the higher revenue for FY2022 was mainly driven by higher sales of commercial and industrial land parcels in BSD City and Kota Deltamas, Indonesia, as well as higher revenue recognised from residential units and commercial shophouses. 

 

The board of directors at Sinarmas Land has proposed a first and final cash dividend of S$0.00138 per ordinary share. Subject to shareholders&rsquo approval at the annual general meeting on Apr 24, the dividend will be paid out on Jun 27. The record date for the dividend is 5 pm on Jun 19. 

 

Cost of sales for H2 was up 8 per cent to S$246.9 million, while gross profit rose 88.2 per cent to S$577.9 million.

 

For FY2022, the group said its recurring income rose 32.5 per cent year on year to S$153.4 million, driven by higher hospitality and commercial office rental income.

 

Following the reopening of international borders and an influx of travellers, Sinarmas Land said its hospitality business has witnessed an improvement in revenue and occupancy. 

 

Likewise, rental income from the Indonesia division improved mainly due to improved occupancy and higher average rental rate, as well as the inclusion of rental income generated from the newly opened AEON Mall Southgate in Jakarta. 

 

Rental income from the UK property group also improved, deriving from its recently acquired 32-50 Strand building and the rental income increases arising from rent reviews for Alphabeta Building.

 

In the financial year, the group recorded a share of loss from joint ventures of S$28.6 million due to a S$58.6 million reversal of unrealised gain from the sale of land from the company&rsquo s subsidiaries to joint ventures in its Indonesia division. 

 

Sinarmas Land also booked an exceptional gain of S$87.7 million from the disposal of a UK subsidiary, Horseferry Property Limited, which owned an investment building located in Victoria, Central London. 

 

Margaretha Widjaja, executive director of Sinarmas Land, noted that Indonesia was able to &ldquo buck&rdquo headwinds-like supply chain disruptions and inflation with a record gross domestic product (GDP) growth of 5.31 per cent in 2022. 

 

&ldquo Being a key commodity exporter, Indonesia benefited from (the) global commodity boom brought by the aftermath of the Russia-Ukraine war and a more stabilised rupiah. The lifting of Covid-19 restrictions also helped increase domestic household consumption,&rdquo said Widjaja. 

 

&ldquo In 2023, the group will continue to seek collaboration opportunities with strong regional partners, focusing on acquisition opportunities, asset enhancements, driving rental reversions for better yields and riding on our track record of delivering sustainable profits.&rdquo

 

On Oct 28, Sinarmas Land : A26 +3.83% lead independent director Hong Pian Tee acquired 90,000 shares of the company for a consideration of S$17,100 at 19.0 cents per share.

 

He maintains a 0.06 per cent direct interest in Sinarmas Land.

 

Hong was a partner of PwC from 1985 to 1999, prior to his retirement from professional practice.

 

As a veteran in corporate finance and advisory, with over 26 years of experience in prominent global accounting firm, he is also currently serves as a director of XMH Holdings : BQF 0%, Yanlord Land Group : Z25 +0.57%, and YHI International : BPF 0%.

K2 DATA Centres, a subsidiary of the Kuok Group, has entered into a joint venture with Sinarmas Land : A26 -1.05% to develop and operate hyperscale data centres in Indonesia.

 

Hyperscale data centres that both companies are developing should exceed 5,000 servers and 10,000 square feet.

 

The first development, K2 Data Centre Jakarta 1 Campus (K2 JKT 1), will comprise four data centres in Bekasi Regency, Greater Jakarta. The development is situated close to international cloud service providers&rsquo infrastructure and will have 58.8 megawatt of IT capacity at completion.

 

The first phase of the campus will be ready by early 2024, and will have an Uptime Institute Tier III certification for redundancy which does not necessitate a shutdown for maintenance or replacement. The K2 JKT 1 will also have a LEED Gold certification which is a green building rating system.

 

&ldquo After several years of developing and operating DCs for our hyperscale customers in Europe, K2 JKT 1 Campus marks our debut in APAC, where we continue to bring our leading technical and operational service experience to our customers in this exciting region,&rdquo said Kuok Meng Wei, managing director and chief executive officer, K2.

 

The joint venture has another similar scale campus development in the pipeline located at Karawang Regency, Greater Jakarta.

 

&ldquo We are witnessing first-hand the rapid growth of Indonesia&rsquo s digital economy and are deeply committed to supporting Indonesia&rsquo s transformation into a digital and economic powerhouse. We believe this joint venture will contribute meaningfully to the digital infrastructure required to enable Indonesia to realise the full potential of its digital opportunities,&rdquo said Michael Widjaja, chief executive officer, Sinarmas Land.

 

SINARMAS Land : A26 0% is selling a wholly-owned subsidiary that owns a freehold commercial property in London for an estimated price of £ 247.5 million (S$414.2 million).

 

The property company stated in its statement filed to the Singapore Exchange on Wednesday (Jul 13) that its wholly-owned subsidiary SML Victoria has entered into a sale and purchase agreement with LTH Property Holdings 3 for the divestment of Horseferry Property.

 

Horseferry Property owns the freehold commercial property at 33 Horseferry Road in London.

 

The £ 247.5 million price was determined on a willing buyer willing seller basis, taking into account factors including recent transaction prices of similar properties in the same location, Sinarmas Land stated.

 

A cash deposit of 20 per cent of the sale price was received upon signing the agreement, with the balance payable on completion, which is expected to take place in early August.

 

The proposed disposal provides an opportunity for Sinarmas Land to realise an &ldquo attractive&rdquo rate of return on its investment, the property company noted, without elaborating on the return rate. However, the company acquired the building in 2017 for £ 188.6 million, according to an earlier Business Times report.

 

SGX-listed SinarMas Land has launched an investment arm to support technological innovation.

 

The investment arm, called Living Lab Ventures, will accelerate and fund potential startups in Indonesia. The launch of Living Lab Ventures underscores Sinar Mas&rsquo focus to develop a digital ecosystem, particularly adding the digital aspect within the overall township development.

 

Living Lab Ventures adopts a sector-agnostic approach hereby opening itself to a wider investment reach. It will focus on three main technological aspects, which are: smart technologies, digital life and mobility.

 

One of its aspects, smart technologies, focuses on innovative technologies to support smart city living. It is closely related to the digital life aspect, which focuses on technology related to e-commerce and social networking that have an impact on social life. The final aspect, mobility, focuses on smart technology in the movement of people and goods within the city.

 

Living Lab Ventures will also come with Living Lab X, a laboratory that incubates and develops local startup companies. Living Lab X offers partnerships with other related companies, as well as providing pilot testing for initial implementation trials. In addition, Living Lab will support collaborations and provide mentoring for startup leaders in every process of their company&rsquo s development.

 

Living Lab Ventures will be led by Mulyawan Gani as managing partner and Bayu Seto as partner.

 

According to Sinar Mas, both of them come with extensive experience in the executive ranks of several unicorn startups and business transformation into the digital realm.

 

&ldquo To create a holistic smart city, providing smart facilities to the community has become an absolute necessity. Hence, Sinar Mas Land is committed to develop Living Lab Ventures to finance digital startups relating to people&rsquo s digital lifestyle, hereby developing an agile and smart life in Sinar Mas Land&rsquo s ecosystem,&rdquo says Michael Widjaja, group CEO of Sinar Mas Land.

 

&ldquo Indonesia&rsquo s smart city exponential growth potentials are increasingly being noticed. To create a conducive digital lifestyle, we need to enable people with innovative and adaptive technologies that goes along with the dynamic needs of the community itself,&rdquo says managing partner Gani.

 

&ldquo Living Lab Ventures wants to support local startups to unlock their potential and become the game-changers by integrating their tech innovation and solutions into the people&rsquo s daily lives,&rdquo he adds.

 

&ldquo Our idea of establishing Living Lab Venture is not only to facilitate startups in terms of funding, but also through Living Lab X incubation process to guide these startups hand-in-hand with their technological innovation and solutions. In the long run, these successful implemented technologies will help the development of smart society, not restricting to BSD City but also Indonesia,&rdquo says Seto.

Sinarmas Land

 

On Jan 17, Sinarmas Land Sinarmas Land: A26 0% lead independent director Hong Pian Tee acquired 58,900 shares of the company for a consideration of S$14,725 at 25.0 cents per share.

 

He maintains a 0.05 per cent direct interest in Sinarmas Land.

 

Hong was a partner of PricewaterhouseCoopers from 1985 to 1999, prior to his retirement from professional practice.