Downtrend Performance of Property Development Segment
SMRA posted the decline in 1Q18 top line performance. Its net revenues tumbled by 2.5% y-y to IDR1.2 trillion, while its gross margin also plummeted to 44.9% on the annual basis. The decline in net revenues and gross margin were attributable to the downtrend performance of the property development segment, particularly in sales of houses and land plots. Besides, its 1Q18 net profit performance also edged down by 41.8% y-y to IDR41.8 billion; thus, the net profit margin depleted from 5.8% in 1Q17 to 3.5% in 1Q18.

However, its marketing sales grew by 1.8% to IDR459 billion. The growth was backed by the hike in sales of shoplots segment. Additionally, the investment properties segment also surged by 10.2% y-y backed the soaring average rent prices in its 3 malls.

Shift in Project Development to Bandung
SMRA shifts its focus of project development from Serpong to Bandung. The launch of two commercial projects in Serpong were called off from their initial plan and the launching date of 3 residential projects and one commercial project were postponed until 2H18. However, it plans to launch two residential projects and 3 commercial projects situated in Bandung in 2018.

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