Property Developer Summarecon Sets Capital Expenditure at Rp 1.6t

Summarecon Agung, a domestic property developer, has set capital expenditure at Rp 1.6 trillion ($171 million) this year as the company wants to finance some of its projects in Greater Jakarta.

The company will finance its investment with bank loans and its own cash.

“Bank loans will account for 80 percent,” Johannes Mardjuki, Summarecon’s president director, said on Thursday.

Johannes said the investment would be used to fund various projects and expand its land assets.

“We have allocated Rp 550 billion for our Bekasi project, and Rp 250 billion will be used for building a highway there.”

Summarecon has several projects in Greater Jakarta, including in Jakarta, Bogor, Bekasi, Depok and Tangerang.

At its Serpong project, located in Banten province, the company will build a modern residential complex called Scientia Square at a total cost of Rp 180 billion, while the remaining capital expenditure will be used to finance the development of two hotels in Bali.

Summarecon recorded a net income of Rp 150 billion and revenue of Rp 840 billion in the first quarter this year.

“The Serpong project contributed 40 percent, while Bekasi and Kelapa Gading contributed 30 percent each,” he added.

Shareholders of the company also agreed on Thursday to pay out dividends of Rp 155.6 billion, or 40 percent of the company’s Rp 389 billion of net income last year, to shareholders.

Shareholders also gave the green light to the company’s plan to issue 687.31 million new shares, or 10 percent of the total shares, under a non-preemptive rights issue scheme. The shares will be priced at Rp 1,550 each. The limited share offering is expected to garner Rp 1.06 trillion in the next two years.

Shares of Summarecon rose 1.4 percent to Rp 1,440 on the Indonesia Stock Exchange on Friday. The shares have risen 18 percent so far this year.

Summarecon, founded in 1975, started its business with a 10-hectare plot of marsh land in the then-backwaters of Jakarta, in Kelapa Gading in North Jakarta. It has transformed itself into a leading property company, with various projects in greater Jakarta.

Investor Daily