MANAGEMENT
REPORTS
Report of the Board of Directors
Dear Esteemed Shareholders,
We would like to express our praise to God Almighty for His grace and benevolence that has guided the Company’s business throughout 2017. As we all know, the general economic condition in 2017 was quite dwindling, especially in the property sector, but the Company has managed to go through the year with satisfactory achievements.
Below is the Company’s Management Report in 2017.
The Company Performance Analysis
In general, the property market had been under great pressure throughout 2017. In fact, the property market has experienced this lagging cycle since late 2013 and this can still be felt until the end of 2017.
During 2017, the condition of the property business could be considered lukewarm and tended to be rather sluggish. Similar to other developers, the Company also adopted a careful stance in making more expansions and instead opted to continue its ongoing property projects.
Generally, the Company's Revenues had a 5.48% decline from Rp. 144.02 billion in 2016 to Rp. 136.12 billion in 2017. This was a result of the decrease in the sales of Azalea Suites property in Cikarang, which dropped 5.01% from Rp. 81.04 billion in 2016 to Rp. 76.98 billion in 2017. It is believed that this drop in sales of the Cikarang property occurred because of the weakening economic condition in Indonesia, which eventually resulted in the lower purchasing power of the people. The Company has tried to deal with this drop in purchasing power by offering several attractive incentives for future buyer of the Azalea Suits Cikarang, such as a convenient payment plan and other incentives, namely by providing extra discount and other marketing strategies. The falling Revenues of the Company was also caused by the 10.91% drop in Hotel Revenues from Rp. 45.37 billion in 2016 to Rp. 40.42 billion in 2017. This drop in Revenues was caused by the Government regulations about budget tightening for meetings held by BUMN (State-owned Enterprises), Local Government, and other governmental bodies. These budget tightening policies affected the Company's Revenues because the target market of the Company's Hotels was the BUMN and Local Government, among others.
Along with the fall in Revenues, Gross Profit also suffered a drop of 17.11%, from Rp. 61.93 billion in 2016 to Rp. 51.33 billion in 2017. Similarly, the Net Profit were also down from Rp. 6.02 billion respectively 2017 to Rp 22.92 billion in 2016.
On 12 July 2017, the Company also distributed Cash Dividends for all Shareholders of the Company in the amount of Rp. 3,- per share with a total of 329,560,000 pieces of share or Rp. 988.68 million.
Another notable occasion in 2017 was the signing of the joint cooperation with Taisei Co, Ltd Japan to manage the Azalea Suites Cikarang apartment on 18 April 2017 in Pullman Central Park Hotel Jakarta. The signing of the joint cooperation has signified Azalea Suites Cikarang's status as one of the apartments in the Cikarang vicinity that is operated with an international standard.
The Application of Good Corporate Governance
The Company is committed to operate all of its activities following the principles of Good Corporate Governance (GCG), namely transparency, accountability, responsibility, independency and fairness, which have been regulated in the Law of the Republic of Indonesia Number 40 of 2007 regarding Limited Liability Companies. Throughout 2017, the Company has tried to optimise these GCG principles in each of its business activities and has done several socialisation campaigns in all levels of the organisation, in the hope of encouraging all employees to apply GCG as their work culture in completing their tasks and responsibilities.
The Company's Corporate Social Responsibilities
As an inseparable part of the society, the Company is committed to support and implement socially-focused activities and programs. The Company is not merely fixated in generating profit for Shareholders, but it is also required to provide actual contributions to improve the welfare and living condition of the people, as well as to continuously maintain the preservation of the environment. The Company is greatly concerned with the importance of waste reduction, especially from households, apartments, hotels and office blocks. The Company’s anticipation for this matter is materialised through the construction of waste drainages and landfills as well as through the replantation of the areas surrounding the properties belonging to the Company.
Analysis of Business Prospect in 2018
2018 will be a political year for Indonesia, which will commence with the Simultaneous Regional Election (Pilkada Serentak) in June 2018 and culminating with the Presidential Election in 2019.
However, players in the property business are certain that in 2018, the property sector will fare better than in the previous years. The massive development of infrastructures and government policies that support local investments are expected to become the driving mechanism for the economic growth. An increasing economic growth will in turn improve the purchasing power of the people. In light of the optimism felt by the players of the property business, the Company will continue to adopt a cautious attitude in developing its next property projects.
In 2018, the Company, through its subsidiary PT. Graha Puji Propertindo, will start to create a plan for the Second Stage development of the Green Palace Residence Cikarang. In addition, through its subsidiary PT. Pudjipapan Kreasindo, the Company will start exploring the possibility of a joint cooperation with a third party to develop Highland Park Serang.
As a part of its long-term strategy, the Company will be consistent and will focus on the development of the apartment business, in accordance with its core business, by making the most of every available condition and opportunity.
Closing
Last but not least, on behalf of the Board of Directors, allow me to extend my sincerest gratitude to the Board of Commissioners, Shareholders and Business Associates for their excellent commitment, trust and partnership along the way. We would also like to extend our appreciation to all our employees for their integrity, dedication and loyalty in supporting the Company. We hope that the Company’s achievements in 2017 can be improved in 2018 and that the Company will be able to accomplish more in the coming years.
