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Management Reports

Report of the Board of Directors

Damian Pudjiadi, MBA President Directors

Dear esteemed shareholders,

Peace and prosperous, may we all be in the goodness and guidance of The God Almighty.

The year 2019 has been a challenging period for most of the industries in Indonesia, especially the Property Industry. However, in the midst of the challenging global and national economy, the Company managed to take effective steps which led to the Company’s ability to record a fairly good performance.

The Company’s Performance

 The nation’s economic growth pace is generally slowing down in 2019. This downturn is mainly triggered by the global economy uncertainty as a result of the tense trade relations between the United States and China as well as the geopolitics of Indonesia.

In 2019 the property industry still experienced a slowdown, or even a decline, in several sub-segments. According to Bank Indonesia Report, the demand growth of commercial properties fell in the fourth quarter of 2019, from 1.41% (yoy) in 2018 to 0.52% (yoy). The downtrend also took place in the property supply, slowing down significantly from 3.71% (yoy) in 2018 to 0.04% (yoy) in 2019.

The Company managed to maintain its performance steadily amidst the sluggish economy and slackening property industry. The Company recorded 2019 operating revenue of Rp67.76 billion albeit a 21.64% decrease from Rp86.47 billion in 2018. The decline was due to a decrease in Property Sales, especially the sales of Azalea Suites Cikarang Apartment, most of which have been sold in previous years.

Amid the decline in operating income, the Company booked an acceptable record of Rental Income, going up 20.26% from Rp33.31 billion in 2018 to Rp40.06 billion in 2019.

Target Achievement and Realization

Overall, the sales targets set at the beginning of the year have not been met. This is due to the political and economy atmosphere related to the recent national election. Additionally, our target market, namely millennials, has not been well-formed is a reality in the property market. The latter is as a result of low purchasing power, available housing products not as expected by millennials, and different behavior or lifestyle that drive them to have different priorities .

The sales declined but the Company managed to book a Net Profit of Rp4.34 billion in 2019 albeit a decrease of 24.26% from Rp5.73 billion in 2018. Thanks to the increased rental income and controlled cost management.

Good Corporate Governance Implementation

To maintain the Company's performance in a sustainable manner, the practice of Good Corporate Governance (GCG) plays an important role as the main foundation of the Company in carrying out good business activities with integrity. The Company seeks to improve the application of governance principles and information disclosure referring to applicable regulations, and to avoid any conflicts of interest.

This principle has been implemented by the Company at stages adjusting to the development of regulations from the relevant authorities. As the executor of GCG principles implementation within the Company's organizational scope, the Board of Directors has endeavored to apply various existing regulations, ranging from commitment to relationships with shareholders through holding a General Meeting of Shareholders (GMS), working relations with the Board of Commissioners, organizing the Internal Audit function and the Corporate Secretary, to the formulation of various GCG policy tools.

Business Prospect

As the optimism of the global economy improvement grows, Indonesia is also projected to be able to encourage a gradual growth. In 2020, we assess that the government will be increasingly active in improving infrastructure and completing a number of development projects, including transportation projects, namely the MRT and LRT. The existence of the MRT and LRT is expected to have a significant impact. To support the MRT and LRT, the government will implement the TOD which will be developed as a residential and commercial area for urban communities.

Addressing these challenges, the Company will continue and strengthen the strategies set in the previous year. In this case, the Company will continue to improve and strengthen Sales and Rentals, the core business of the Company, while taking into account the growth needs of the property business and continuing to prioritize continuous service innovation, especially through digitization.

Damian Pudjiadi, MBA
President Directors