Directors Report

Candra Ciputra

We would like to praise the God Almighty for His blessings and guidance that enabled the Company to go through the challenging year of 2014 with satisfactory results.

 In 2014, the Indonesian economic growth experienced a certain deceleration where the Gross Domestic Product stood at 5.1% and inflation level was 8.36%. Moreover, at the end of 2014, Rupiah currency was depreciated against USD to Rp12,440.

In line with the challenging macro economy condition, property sector also indicated the slowing down throughout 2014. There were several factors causing the bearish trend of property market, such as the overvalued property price and the Loan to Value (LTV) policy issued by the Bank of Indonesia as well as the political situation related to the General Election of Legislative and Presidential. These factors have put the society into a wait and see behavior in spending their money, especially in buying property.

Exceeding the Target Performances

Amidst the unfavorable condition of Indonesian property market, the Company showed a satisfying business performance. The Company proved its capacity to be one of the Indonesia leading Property Company by recording total revenues of Rp6,344.2 billion, an increase of 25% from the previous year which amounted to Rp5,077.1 billion. Such revenues were contributed by landed residential sales of Rp4,039.4 billion and the high-rise apartment/office sales of Rp1,180.6 billion. Meanwhile, other commercials and recurring income contributed Rp1,124.2 billion.

In line with the increasing revenues, the Company booked operating income of Rp2,247.4 billion, an increase of 36.1% compared to the previous year of Rp1,651.5 billion. Eventually, the Company recorded a very significant boost on net income of 35.7% to Rp1,324.9 billion from Rp976.7 billion in 2013 and resulting profit margin of 20.9% from 19.2%.

In terms of financial positions, the Company successfully recorded an increase in total assets of 15.8% from Rp20,114.9 billion to Rp23,283.5 billion which were mainly contributed by the rise in inventories related to ongoing project developments.

Risk Mitigation and Business Challenges

The unfavorable general economic condition and property market situation inevitably affected the Company’s performance. Nevertheless, we succeeded to anticipate such conditions by implementing business strategies, mainly in terms of cost efficiency.

Moreover, as a property company, the Company is also fully aware that land reserves are absolutely needed in Company’s project development in the future. In order to anticipate that issue, the Company has set up cooperation with the land owners written in the joint working agreement as a part of its business development plan.

Business Development, Innovation and Customer Satisfaction

In 2014, the Company still maintained our commitment to continuously develop our business through the launch of innovative property products. It was shown by our high quality projects that has been launched such as Citra Lake Suites which is an island condominium located in the middle of ± 7 hectares lake. In constructing such a lavish project, the Company through its subsidiaries, PT Ciputra Residence, collaborated with Mitsui Fudosan Residential. Covering an area of 1.2 hectares equipped with sky garden, Citra Lake Suites provided a new experience to its residents.

Furthermore, at the end of 2014 the Company, also collaborated with PT Pembina Sukses Utama, launched a new office building called Citra Towers which was built in Kemayoran area. The area has strategic location, prime infrastructure and high support value. The uniqueness of this building is designed with the concept of “green development” in accordance with the Company’s commitment to develop an eco-friendly property in terms of creating an environmental balance.

The customer satisfaction holds a certain appreciation for us regarding the entire target that we have achieved. Therefore, we always try to provide a high quality property products and also maintain a good relationship with the customers by service excellence.

Optimizing the Good Corporate Governance (GCG)

As a publicly-owned company, the Company are fully aware on the importance of GCG implementation in creating an effective management. Based on the applicable law, we always implement GCG principles to its optimum state in every business activity that we conducted on all level of organization. Periodically, we always evaluate every implemented GCG policy and socialize to all employees if any adjustments or new policies occur.

Corporate Social Responsibility (CSR)

As a manifestation of our commitment to the community empowerment through Entrepreneurship development, in 2014 the Company fully supported the inauguration of Citra Artpreneur which serves as medium for all Indonesian artists to exhibit their finest art works and aimed at promoting Indonesian arts, both in the country or overseas.

Through this place, the Company expect that the Indonesia’s creative industry can be developed through its art and cultural–based empowerment covering fine arts, craftsmanship and design, architecture, performing arts and musical arts.

The 2015 Business Projection

Property market in 2015 is predicted to experience a better growth compared to the previous year. A positive growth will occur in every subsector such as apartments, commercials and office buildings, retail shopping center, hotels, even the industrial areas.

In responding the business challenges in 2014, we have set forth a long term plan to keep focusing on residential and commercial development which includes developing property business throughout the cities in Indonesia, becoming a market leader in property business, and performing property product diversification as well as maximizing the incorporation of trending base and rental base.

Closure

On behalf of the Board of Directors, allow me to express my deepest gratitude to the Board of Commissioners upon their guidance, to all employees for the hard work and loyalty to the Company, to all customers and business partners for the established cooperation, and to shareholders upon their trust and support. We sincerely hope that the positive performance achieved in 2014 will strengthen the Company’s moves to keep on inventing the excellence values for all shareholders and stakeholders in the near future.

 

Sincerely yours,

Candra Ciputra
President Director

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