PT Lippo Karawaci Tbk · IDX:LPKR
PT Lippo Karawaci Tbk — 2Q21 Earnings Presentation
70 slides from PT Lippo Karawaci Tbk's earnings presentation, Aug 3, 2021
Slide 1: PT Lippo Karawaci Tbk 2Q21 Results Presentation
PT Lippo Karawaci Tbk 2Q21 Results Presentation 3 August 2021
Slide 2: Shareholder Structure
Shareholder Structure As of 30 June 2021 As of 31 December 2020 No. of No. of Change Description No. of Shares % No. of Shares % Investors Investors YTD (%) Domestic Insurance 27 1,178,323,640 1.7% 24 1,049,803,440 1.5% 12.2% Individual 18,825 3,091,391,238 4.4% 20,166 2,885,379,262 4.1% 7.1% Corpor
Slide 3: Contents
Contents Business Model 04 - 06 Recent Developments 07 - 16 1H21 Financial Data 17 - 36 Corporate Governance Initiatives 37 - 42 Subsidiaries 43 - 50 Meikarta 51 - 53 Corporate Data 54 - 57 Appendix 58 - 69
Slide 4: One of Indonesia's largest integrated real estate developers
One of Indonesia’s largest integrated real estate developers One of the largest diversified Market leader in property, malls, and property companies in Indonesia healthcare in Indonesia by total assets and revenue ◼ Ongoing development of 7 projects (1) with GFA of approximately 371,878 sqm ◼ Total
Slide 5: Simplified organization and refocused strategy
Simplified organization and refocused strategy Pillar Land Banking & Development Real Estate Management & Services Investments and Fund Management ▪ Development of residential, commercial ▪ Management of real estate assets, as ▪ Management of third-party capital for and industrial properties well as
Slide 6: Simplified organization and refocused strategy HoldCo
Simplified organization and refocused strategy Revised strategy focused on disciplined capital allocation approach across segments and supported by efficient asset rotation HoldCo ▪ No increase in head office personal expenses over the next 3 years ▪ Focused business strategy base off operational ex
Slide 7: Recent events highlights
Recent events highlights As of Jun 2021, handover progress in Riverside cluster which is the first landed residential cluster in Waterfront Estates reach 82% (of total units), while construction progress in remaining clusters A remain on track for timely completion. The Silvercreek cluster in Waterf
Slide 8: Debt to Equity Datapoints
Debt to Equity Datapoints Total Debt(1) 2017 to Present Debt(1) to Equity Ratios 2017 to Present Rp bn (x) 25,000 23,148 1.10 1.02 1.00 4,876 20,000 0.90 0.80 0.77 14,621 15,000 13,638 13,725 0.70 1,883 12,080 2,186 0.59 0.58 2,808 0.60 0.56 918 18,272 10,000 0.50 0.52 0.46 0.35 0.46 0.40 12,738 11,
Slide 9: Net Debt & Cost of Debt Update
Net Debt & Cost of Debt Update Net Debt - 2017 to Present (1) Cost of Debt - 2017 to Present Rp bn 10.0% 20,000 9.4% 17,526 9.0% 18,000 8.8% 8.4% 16,000 8.0% 14,000 12,803 7.3% 12,000 11,100 10,732 7.0% 10,000 7,395 6.0% 6.5% 8,000 6,000 5.0% 4,000 4.0% 2,000 - 3.0% 2017 2018 2019 2020 1H21 2017 201
Slide 10: Construction for all 2019 legacy projects completed
As of Jun 21, construction for all of 2019’s legacy projects have been completed Cost to Completion Construction Progress(1) Percent Complete $230 100% 100.0% 97.9%99.0% $212m 90% 88.9% 81.9% $180m 80% $160m 70% 71.7% 60% 54.2% $110m 50% 42.4% $87m 40% 30% 31.7% $54m 20% $36 $21 10% $0 0% 1Q19 2Q19
Slide 11: Commitment to deliver new 2020 projects
Commitment to deliver new 2020 projects Cendana Homes – started construction in 3Q20 Target Launched 2020 2Q21 completion Estimated Total construction residential 324 $3 mn costs to units completion % Sold as Total GFA 20,860 sqm per 30 Jun 100% Cendana Place Sep 20 Cendana Place Jun 21 2021 Waterfr
Slide 12: Commitment to deliver new 2020 projects
Commitment to deliver new 2020 projects Cendana Peak – started construction in 4Q20 Target Launched 2020 3Q21 completion Estimated Total construction residential 328 $7 mn costs to units completion % Sold as Total GFA 22,863 sqm per 30 Jun 100% Cendana Peak Mar 21 Road works Jun 21 2021 SOHO at Fair
Slide 13: Commitment to deliver new 2020 projects
Commitment to deliver new 2020 projects Cendana Icon – started pre-construction progress in 2Q21 Target Launched 2021 2Q22 completion Estimated Total construction residential 809 $23 mn costs to units completion % Sold as 127,308 Total GFA per 30 Jun 82% Cendana Icon May 21 Cendana Icon Jun 21 sqm 2
Slide 14: Meikarta
Meikarta Construction Status District 1 Sales Pickup 80% Rp bn Units 250 550 70% 224.8 68% 500 209.9 63% 63% 450 60% 60% 200 57% 181.3 180.6 400 50% 49% 155.5 350 150 43% 133.3 133.1 300 40% 250 100 30% 200 28% 69.1 67.1 59.0 150 20% 50 100 14% 10% 11% 50 0 0 0% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q
Slide 15: Meikarta: Significant progress since 2019, Handovers Commence
Meikarta: Significant progress since 2019, Handovers Commence Dec 2020 Jun 2021 ~58ha of land owned. Currently have ongoing development for two apartment districts. District 1 ▪ Consists of ~13ha ▪ 28 towers, all of which have been topped off as of 30Dec20. ▪ Handover commenced. As of 31Jun21, ~1,25
Slide 16: 1H21 Financial Data
LIPPO 4H21 FINANCIAL DATA
Slide 17: LPKR Financials as of 1H21, Property Business Strengthening
LPKR Financials as of 1H21, Property Business Strengthening Revenue (Rp Bn) EBITDA (Rp Bn) Real Estate Healthcare Malls Others Fund Mgmt. Fund Mgmt. Revenue Real Estate Real Estate EBITDA & Development (Mgmt & Svcs) & Invnt & Investment & Development Mgmt & Services Recurring Income Recurring Income
Slide 18: LPKR cash balance remains strong excluding LMIRT consolidation
LPKR cash balance remains strong excluding LMIRT consolidation Cash from investing Cash from financing Cash from operating Cash at Business Placement of Acquisition of Receipt of Incoming fund Loan Payment of Other Forex Cash at beginning operations investments subsidiaries dividend proceeds repayme
Slide 19: Starting to see resolution in existing pipeline projects
Starting to see resolution in existing pipeline projects, while newly launched projects in 2020 are expected to finish on time Completed projects with units ready to be sold Total 1H21 Est. value Total GFA Target FY20 Account FY20 Est. value of 1H21 Account Percentage Project Stake Type residential
Slide 20: Land Bank Reconciliation
Land Bank Reconciliation Comprehensive review of landbank conducted at YE20 based on current market values, detailed breakdown of key landbanks 20
Slide 21: Key Financial Highlights
Key Financial Highlights 1H21 1H20 Change (%) Presales (Rp billion) 2,331 1,052 122% Revenue (Rp billion) 7,229 5,333 36% Recurring Revenue (Rp billion) 5,292 4,016 32% EBITDA (Rp billion) 1,962 969 102% EBITDA Margin 27.1% 18.2% N.A. Net Income (Rp billion) (263) (1,251) 79% Interest Coverage Ratio
Slide 22: 1H21 Marketing Sales grew by 122% YoY
1H21 Marketing Sales grew by 122% YoY Project Location FY21 Marketing 1H21 Marketing 1H21 1H21 Land ASP Sales Target Sales (RpBn) Units sold (Rpm per sqm) Holdco 2,350 1,704 2,507 11.9 Marketing Sales by Location Lippo Village West Greater Jakarta 1,400 1,106 1,142 11.2 Holland Village Manado Manado
Slide 23: Property marketing sales by structure
Property marketing sales by structure FY21 (in Rp bn) FY17 FY18 FY19 FY20 1H21 Guidance Residential 423 1,336 860 2,027 1,794 2,875 Low Rise 227 1,190 668 1,678 1,578 2,438 High Rise 196 146 192 349 215 437 Commercial 63 19 130 137 121 65 Industrial 78 81 714 291 255 310 Unique Product SDH 138 162 1
Slide 24: LMIRT business consolidation in 1H21 impact
LMIRT business consolidation in 1H21 impact (Rp Billion Consolidated) ASSETS 1H21 FY20 LIABILITIES & STOCKHOLDERS' EQUITY 1H21 FY20 CURRENT ASSETS CURRENT LIABILITIES Cash & Cash Equivalent 5,622 2,993 Bank Loans 1,787 1,723 Trade Accounts Receivable 2,682 1,882 Lease Liabilities 767 771 Inventories
Slide 25: Debt maturity profile
Debt maturity profile Debt breakdown Debt maturity Profile (as of 1H21) Coupon rate Coupon rate Coupon rate $ million 7.25% pa 8.125% pa 6.75% pa 10% 700 617.0 600 500 420.0 400 90% 300 250.0 $ debt Rp debt 200 142.9 100 50.9 44.5 30.6 18.6 21.7 10% 0 2021 2022 2023 2024 2025 2026 Rp Loans (Local) B
Slide 26: 1H21 P&L overall saw positive impact from LMIRT consolidation
1H21 P&L overall saw positive impact from LMIRT consolidation P&L Statement (in Rp billion) 2Q21 2Q20 Change % 1H21 1H20 Change % Total Revenues 3,822 2,232 1,590 71% 7,229 5,333 1,897 36% COGS (2,361) (1,444) (917) 64% (4,131) (3,216) (915) 28% Gross Profit 1,461 788 673 85% 3,098 2,117 982 46% Ope
Slide 27: High quality revenue profile with recurring income visibility
Business is underpinned by a high quality revenue profile with significant recurring income visibility High proportion of revenue attributable to recurring income streams Recurring vs Development revenue 27% 27% 76% 24% 73% 27% 76% 24% 73% 73% (Rp bn) 125 81 213 1,696 1,183 1,779 506 339 246 1,726 4
Slide 28: Balance sheet highlights
Balance sheet highlights Total assets (Rp Bn) Total capitalization (Rp Bn) 70,000 50,000 45,000 60,000 13,585 40,000 12,080 50,000 8,746 904 35,000 1,047 8,448 23,148 10,496 941 14,621 5,601 13,725 5,369 17,682 30,000 40,000 1,122 8,787 4,685 25,000 5,398 30,000 1,818 7,731 2,993 7,009 4,096 4,846 4
Slide 29: Key credit metrics
Key credit metrics Net debt / EBITDA (x) EBITDA / Interest (x) (1) 4.4 8.9 5.6 5.7 5.6 2.4 1.8 1.5 2018 2019 2020 1H21 2018 2019 2020 1H21 Net debt / Total assets (%) Net debt / Total equity (%) 27% 77% 26% 21% 52% 46% 13% 22% 2018 2019 2020 1H21 2018 2019 2020 1H21 (1) Include interest arising from
Slide 30: Key Operational Metrics of Recurring Income Assets
Key Operational Metrics of Recurring Income Assets Occupancy Trend Occupancy Trend Occupancy Trend Malls Under Management Network of Hospitals Hotels Under Management 70% 64% 80% 75% 100% 71% 73% 88% 88% 87% 90% 60% 56% 70% 80% 78% 53% 52% 54% 80% 60% 50% 53% 70% 50% 60% 40% 42% 50% 40% 30% 40% 30%
Slide 31: Income statement details
Income statement details Property marketing sales (Rp Bn) Revenue (Rp Bn) 7,000 14,000 12,000 213 125 6,000 1,696 10,000 1,779 506 5,000 403 3,500 8,000 23 4,000 7,018 609 6,000 5,965 848 3,000 8 214 291 4,000 3,812 2,000 162 142 255 520 121 2,000 1,899 19 714 3,093 2,975 1,000 2,027 1,794 1,938 1,1
Slide 32: Historical capex spending & land bank purchases
Historical capex spending & land bank purchases Capex Spending (Rp Bn) 12,000 SILO GMTD LPCK LPKR 10,000 1,925 8,000 6,000 1,480 7,011 4,000 2,197 3,699 1,475 2,000 1,598 1,641 1,051 873 844 1,440 518 477 958 798 468 504 - 279 259 217 2015 2016 2017 2018 2019 2020 1H21 Acquisition of Land for Develo
Slide 33: Holdco Hedging Strategy
Holdco Hedging Strategy Hedging BOND 2025 15,000 16,000 17,500 BOND 2026 15,000 16,000 17,500 COUPON 2026* 13,300 15,500 17,000 Hedged Unhedged Amount Lower Strike Upper Strike Description Maturity ($m) (Rp) (Rp) The Company enters into non- Bond 2025 420 15,000 17,500 Jan-25 deliverable USD call sp
Slide 34: Rental Payment to REITS
Rental Payment to REITS Rp Bn ❖ Successful renegotiation of rental lease with FREIT and LPKR is expected to bring 600 in Rp325bn in savings from adjustments to rents. ❖ Fixed base rate increase of 4.5% per annum, and variable rate mechanism of the higher of base rate or 8% of hospital’s GOR. 511 ❖ K
Slide 35: Corporate Governance Initiatives
CORPORATE GOVERNANCE INITIATIVES
Slide 36: Corporate Governance Framework
Corporate Governance Framework MISSION Corporate Risks 1. Land Banking & 2. Real Estate Management & 3. Fund Management Real Estate Development Services Business & Investments ◼ Low Assets Turnover ◼ Profitability ◼ Development Plan ◼ Failed investment ◼ Business Efficiency to ◼ Fund Management ◼ Pr
Slide 37: Bring Value Added to Lippo
Bring Value Added to Lippo @OLIPPO Good Reputation ¢ Maintain ethical standards which provide long term value administration _ * Build investor confidence corporate committees policy & Organization Efficiency “S) ¢ Build qualified Board members ‘ accountable for efficient organization ¢ Stronger cul
Slide 38: Redefining Lippo Karawaci Governance Principles
Redefining Lippo Karawaci Governance Principles 38
Slide 39: Proposed New Governance Principles
Proposed New Governance Principles 39
Slide 40: Lippo Governance Roadmap
Lippo Governance Roadmap @2DLIPPO Creating a Climate for Change Sustain & Institute NOW . a 07 Urgency to Strong Vision & Work Plans Improve - Quick Wins Instill& Embed in Change Team Strategy & Groups Enhance - for Long Manage Culture 40
Slide 41: Subsidiaries (All)
LIPPO SUBSIDIARIES (ALL)
Slide 42: Lippo Cikarang Balance Sheet and Marketing Sales
Lippo Cikarang Balance Sheet and Marketing Sales Balance Sheet (Rp Billion) FY17 FY18 FY19 FY20 Jun-21 Assets 11,267 9,226 12,219 9,720 9,852 Debt 249 - 200 977 945 Liability 4,734 1,696 1,337 3,140 3,045 Equity 6,533 7,530 10,882 6,579 6,648 Return on Assets (%) -7.3% 21.3% 2.5% -37.6% 5.0% Return
Slide 43: Lippo Cikarang summary income statement
Lippo Cikarang summary income statement Revenue (Rp Bn) EBITDA (Rp Bn) 2,500 1,200 2,210 985 1,000 2,000 1,844 800 606 1,695 600 496 1,545 445 1,501 1,500 400 167 200 1,000 - 655 (200) 2016 2017 2018 2019 2020 1H21 500 (400) (600) - (800) (768) 2016 2017 2018 2019 2020 1H21 (1,000) Marketing Sales (
Slide 44: Lippo Malls
Lippo Malls Dominant position in retail development & property management, through management of 55 malls throughout Indonesia ▪ 3.5 million sqm GFA ▪ As of June 30, 2021 : Overall average occupancy 78.4% and 83.9% in LMIRT properties Stricter social restriction in Jun 2021 resulted in lower footfal
Slide 45: Lippo Malls - Existing Network across Indonesia
Lippo Malls- Existing Network across Indonesia Existing Network Sumatra Kalimantan Sulawesi Area : 655,535 sqm Area : 24,852 sqm Area : 153,815 sqm NLA* : 306,835 sqm NLA* : 17,684 sqm NLA* : 82,675 sqm Occupancy : 77% Occupancy : 79% Occupancy : 71% ARR* (‘000) : Rp 88/sqm/mo ARR* (‘000) : Rp 90/sq
Slide 46: Aryaduta Hotels – gradual business resumption
Aryaduta Hotels – gradual business resumption since July 20 have helped support occupancy rates in our hotels Aryaduta Hotel Aryaduta Hotel Imperial Aryaduta Aryaduta Hotel Aryaduta Hotel Aryaduta Hotel Jakarta Pekanbaru* Hotel & Country Club, LK* Medan Manado Kuta Bali Occupancy rate 49.4% 41.2% 84
Slide 47: Hotels – Severely impacted by Covid-19 Pandemic
Hotels – Severely impacted by Covid-19 Pandemic Tourism industry is a key priority of the Government and benefits from favourable initiative Average room rate(1) Number of Rooms 2017 – 1Q21 2017 – 1Q21 IDR ‘000 per room per day 2,200 800 2,144 2,144 2,144 686 2,150 700 656 600 566 2,100 2,056 500 45
Slide 48: Lippo Malls REIT – Manages retail malls and retail spaces
Lippo Malls REIT – Manages 23 retail malls and 7 retail spaces S$ Millions 2Q21 2Q20 Y-O-Y FY19 FY18 Y-O-Y Gross Rental Income (GRI) 29.6 12.6 134.3% 155.3 155.2 0.1% Total Gross Revenue 49.7 27.4 81.3% 273.0 230.3 18.5% Net Property Income (NPI) 31.8 12.8 148.0% 176.2 165.0 6.8% Distributable Incom
Slide 49: Meikarta
LIPPO MEIKARTA
Slide 50: Strategic region for growth
Strategic region for growth – In between 2 of Indonesia’s largest cities (Jakarta & Bandung); West Java is Indonesia’s most populous province SURROUNDED BY FORTUNE 500 COMPANIES ▪ 4.000 MULTINATIONAL COMPANIES ▪ 1 MILLION CAR PRODUCTION / YEAR ▪ 10 MILLION MOTORCYCLES PRODUCTION / YEAR ▪ 12.000 EXPA
Slide 51: New infrastructure underway increasing accessibility to Industrial Estates
New infrastructure underway increasing accessibility to Industrial Estates, Future driver of FDI KERTAJATI INTERNATIONAL AIRPORT PATIMBAN DEEP SEAPORT Estimated cost: Rp 25.4 Tn. Estimated cost: Rp 40.0 Tn. Estimated completion: Already Operational Estimated completion: End of 2021 (Partial) ELEVATE
Slide 52: Corporate Data
LIPPO CORPORATE DATA
Slide 53: 1H21 Shareholder Structure
1H21 Shareholder Structure Lippo Related Companies Public < 5% 58.1% 41.9% No of Floating Shares : 70,713,245,469 (excl. Treasury Shares) 55.4% 84.0% 62.7% 100.0% 100.0% Title Two PT Gowa Makassar Title Four Title Three PT Asiatic Sejahtera PT Siloam International PT Bowsprit Asset PT Lippo Cikarang
Slide 54: Notes Outstanding
Notes Outstanding Theta Capital Pte. Ltd Theta Capital Pte. Ltd Theta Capital Pte. Ltd $95m $417m $325m 8.125% Senior Notes 6.75% Senior Notes 8.125% Senior Notes Reg S Reg S Reg S Due 2025 Due 2026 Due 2025 February 2020 October 2016 January 2020 D C CC CCC- CCC CCC+ B- B B+ BB- BB BB+ BBB- BBB BBB
Slide 55: New leadership team focused on corp. governance and transparency
New leadership team focused on corp. governance and transparency Board of Commissioners provides adequate representation to minority shareholders John A Prasetio Anand Kumar George Raymond Zage III Kin Chan Anangga W. Roosdiono Independent President Commissioner Commissioner Commissioner Independent
Slide 56: Appendix
LIPPO APPENDIX
Slide 57: The Lippo Group operates across multiple industries
The Lippo Group operates across multiple industries Regional Presence in China, Hong Kong, Japan, Singapore, Korea, and Macau Indonesia CORE INVESTMENT FOUNDATION Property Healthcare Retail & Financial TMT Education 57
Slide 58: Nationwide presence across Indonesia creates network effect
Nationwide presence across Indonesia creates network effect Business segment Growth metrics Cummulative Marketing Sales (Rp Bn)1) Sumatra Kalimantan Sulawesi(4) 22,923 5 12 2 1 1 4 Property 5.6x Development 3 4 2 4,115 2013 1H21 # of malls under management 55 Kalimantan 34 1.6X Sumatra Lifestyle Mal
Slide 59: Real Estate Development
Real Estate Development Lippo Village – in Karawaci, West of Jakarta Dev. Rights 3,226 ha Acq. Land Jobs 48,734 1,418 ha Landbank 344 ha (Net) Houses 10,593 Roads Built 113.5 km Condos 5,686 Shophouses 1,193 Trees 58,199 planted Population 59,519 Lippo Cikarang– East of Jakarta Dev. Rights Existing
Slide 60: Real Estate Development
Real Estate Development Tanjung Bunga– Makassar, South Sulawesi Dev. Rights 1,500 ha Acq. Land Jobs 14,724 659 ha Landbank 254 ha (Net) Roads Built 26.7 km Houses 7,075 Shophouses 199 Trees 13,199 planted Population 21,030 San Diego Hills Memorial Park & Funeral Homes Master Plan 500 ha Acq. Land 12
Slide 61: Key Principles - PSAK 72 & 73
Key Principles - PSAK 72 & 73 PSAK 72 PSAK 73 No impact on actual cash flow. Significant impact on The new standard requires recognition of reporting of financial statements: Revenues based on when control is transfer to the All leases (operating and finance lease) will be customer. recognized: Th
Slide 62: Regulations becoming more conducive to growth
Regulations becoming more conducive to growth LTV relaxation in Feb21*: * Assuming all banks are NPL compliant with NPL ratio below 5% New Old Property Type Second and Second and First First subsequent subsequent Residential (landed > 70sqm 100% 100% - 85% and high rise) 21-70sqm - 90% < 21sqm - - S
Slide 63: Foreign ownership remains a challenge but expected to relax in 2021
Foreign ownership remains to be a challenge in 2020 but is expected to show relaxation in 2021 63
Slide 64: Overview of Jakarta's Condominium market
Overview of Jakarta’s Condominium market Condominium Market Overview Units Sold on the Market Total Units on the Market 1H21 SALES RATE BY GRADE 80,000 Sales Rate 80% Proposed Unit Sold Sales Rate 75% 30,000 100% 70,000 72% 71% 60,000 67% 70% 25,000 80% Units 67% Units 64% 63% 63% 62% 64% 50,000 61%
Slide 65: Overview of Jakarta's shopping mall & CBD office market
Overview of Jakarta’s shopping mall & CBD office market Retail Market Overview NET ABSORPTION, NEW SUPPLY AND OCCUPANCY RENTAL RATES 300,000 100% 250,000 95% 200,000 90% 85% 150,000 Sqm 80% 100,000 75% 50,000 70% 0 65% FY21 FY23 -50,000 60% FY22 FY24 FY25 Net demand New Supply Occupancy rate CBD Off
Slide 66: Indonesia – An Underpenetrated Healthcare Market
Indonesia – An Underpenetrated Healthcare Market 53,000 238,000 Doctors in Indonesia(1) Total number of Hospital Beds in Indonesia(1) 2.0 264,000,000 9.0 Doctors to 10,000 population in Indonesia(1) Beds to 10,000 population in Indonesia(1) The Population of Indonesia 12.5 21.0 Doctors to 10,000 pop
Slide 67: LPKR's trading performance
LPKR’s trading performance LPKR historical Price / NAV per share post global financial crisis Rp 1,600 1,400 1,200 1,000 800 600 400 200 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Rolling BVPS Closing price 1.23 (x) 0.96 Average : 0.73 0.57 0.56 0.34 PWON CTRA LPKR BSDE ASRI Sourc
Slide 68: Notes
Notes:
Slide 69: Notes
Notes:
Slide 70: Investor Relations
Investor Relations Bret Ginesky Head of Investor Relations : [email protected] : +62 21 25669078 : www.lippokarawaci.co.id