PT Lippo Karawaci Tbk (LPKR) Earnings Call Transcript & Summary

Hi. Good morning, everyone. Please -- welcome, equity investors, Board investors, regulators, credit rating agency, to PT Lippo Karawaci Tbk 9 Months 2024 Earnings Call. Today as moderator, I'm Randi as head of investor relations. With me today, we have Mr. John Riady as Group CEO and also Mr. Daniel Phua as Group CFO. Today, we will present our 9 months 2024 result, followed by question-and-answers. [Operator Instructions] Without further ado, please -- Pak Daniel to continue the presentations. Thank you.

He's on mute.

Daniel, sorry. Please unmute.

Okay, good morning, everyone. Welcome again, dear analysts and investors. I mean thank you for your continued support. Today, I will take you through our 9-month '24 results, for 2024. We are very excited to share with you, I think, the company has continued its trajectory. And we have continued to fulfill, I guess, what we've promised the market in regard to ongoing [ structurings ] and providing improved business offerings and looking at ways to improve both the margins and the ways that we are running our business. So starting by giving a business overview, it's important to highlight that, I think, all 3 key segments of our businesses are performing well. Starting with real estate. The 9-month '24 marketing sales are currently sitting at IDR 4.25 trillion. This is 79% of the full year target, so we therefore definitely hit and are on track to be able to achieve the full year marketing sales target that we have set for ourselves. Revenue and EBITDA for real estate have booked a 2% Y-on-Y increase. Again some of that is affected by timing of handovers, but so far, as I will present later on in the real estate segment, that -- handover has been the -- on time. The strategy continued to be the sale of affordable housing products. And we have seen -- we have continued to launch new product concept, right, including XYZ and the Q series that has been taken up very -- has been a high take-up by the public. And we are committed to continue to innovate, continue to be able to build on the successes that we have had in Park Serpong and being able to implement similar concepts in the other business areas. For example, we have implemented XYZ series in Makassar as part of our GMTD businesses over there. And the sale receptions of that has been exceptional as well. Moving on to health care. Now for the health care results, I'm focusing on the 9-month '24 results for health care assuming that health care is not deconsolidated. Now as most of you already know, as I presented in 2Q, from June, onwards, due to the transactions that's happened with the strategic divestment of Siloam, Siloam will no longer be a consolidated entity, but it will be treated as an associate. But we still close -- hold close to 30% of Siloam. It is therefore still a very important and strategic investment for us. And in this case, in order to provide like-for-like comparisons, I'm going to tell you the 9-month '24 results compared to the 9-month '23 results on a like-for-like basis assuming that they are not deconsolidated. Now on that basis, you will note that the revenue line, EBITDA and underlying NPAT all went up, yes. The revenue went up by (sic) [ to ] IDR 9.12 trillion or 11%, EBITDA by (sic) [ to ] IDR 2.38 trillion or 9% year-on-year. And the underlying NPAT went up by (sic) [ to ] IDR 1.1 trillion or 12% year-on-year. So this is a testament to Siloam's successful executions of its Siloam 5.0 strategy, which has basically allowed us to build up the acuity of our services, allow us to continue to improve on our clinical care and quality of our offerings. And we have currently just finished the planning of Siloam's 5-year plan for the next 5 years which we have called next-gen Siloam, which we will share with you in further detail in the following deck as well, which we believe would also provide further engine for growth for Siloam going forward. The inpatient admissions, outpatients visits have all improved year-on-year compared to 9-month '23; and those are key anchor point for the improved performance for Siloam. Lifestyle has similarly performed well. The 9-month '24 revenue is booked at IDR 1.02 trillion, and that is a 13% increase year-on-year. Malls revenue improved by 3% year-on-year to IDR 506 billion, while the revenue from hotel improved by 13% year-on-year to IDR 357 billion. The footfall and traffic continue to improve in our malls. We now average about 10.4 million visitors per month. And the mall occupancies are stable at about 80.1%. Hotel has been also performing well. The occupancy is at a stable average of 67% for 9-month '24, whilst the average room rate actually saw an 8% increase year-on-year. And this is actually higher than pre-COVID 2019 level. Now on a pro forma basis. Again coming back just to remind pro forma means that if I assume that Siloam was not deconsolidated. I think that's important to provide a like-for-like comparison of business performances. You will see that basically all segments has improved generally, I mean, from the year before. Looking at the EBITDA. Real estate improved by 2%, health care by 9%; lifestyle relatively flat. With holdco, some expenses obviously would have increased compared to the year before, but on the whole if you look at it on a pro forma basis, EBITDA improved by 6% and revenue improved by 7%, yes. Obviously, on a non pro forma basis if we were to exclude -- include the effect of the deconsolidation of Siloam, the results would have decreased, so therefore, we think it is more important to look at the underlying NPAT and NPAT to give investors a clearer picture of how the business is performing. Now if we look at it on underlying NPAT level. Now underlying NPAT, just a reminder, is basically we want to exclude a lot of the nonoperational and one-off events. And key amongst this obviously for 9-month '24 would be the sale and deconsolidations and resulting gain from the divestment of Siloam. So by excluding the effect of the divestments, I mean, we then come up with the underlying NPAT which reflects the base business performance. Now as you can see from an underlying NPAT perspective, real estate improved by 2%. Now health care obviously decreased by 38% due to the deconsolidation of Siloam, yes. We would not have the same 9-month result for Siloam. In fact, we only have about 6 months, which means that, like-for-like, the underlying NPAT contributions from the health care segment would decrease, but what is important to highlight is that -- you noticed that holdco, right? Holdco is basically where we park all our interest expenses, where we park our share of profit from associates. Now the drop in Siloam is more than made up for by the increase in holdco, yes. So the improvement in holdco is due to 2 main factors, obviously the decrease in interest expenses as a result of the paying down of debt and bonds that I have explained to the market previously and also obviously the share of profit from Siloam as an associates. So again, what we lost in here, we more than made up for at the holdco level, yes. And you will see also that lifestyle as a segment has also improved by over 100%, by IDR 83 billion. So all in all, basically we have close to 500% improvement in regard to our underlying NPAT for 9-month '24 versus 9-month '23. Now note for example, in 9-month '23, we were still doing negative IDR 105 billion, yes, so that has seen a turnaround. And this is based on underlying business performances. It's not related to one-off events, for example, like the disposal of Siloam, like the FX and so forth, which we excluded, yes. So by looking at the underlying business performances, you have seen a significant turnaround in the way the business operates such that we are now in a stable, positive underlying NPAT for the 9 month of '24. Now obviously, if you look at the NPAT level, the quantum is even larger. We are now sitting on NPAT of IDR 18.7 trillion, yes. This is, again, over 2,000% increase. Now A lot of that obviously is due to the divestment of Siloam, right? So it is a one-off event, but it does help to lift our retained earnings into the positive territory as well, so I do believe that, that is significant, yes. But I think more importantly we should focus on underlying NPAT performances. As you can see, this is a very strong underlying NPAT of IDR 411 billion for 9-month '24, after the deconsolidations and following some paydown of debt. Now on the statutory revenue and EBITDA level. As I alluded to earlier, if you were to look at the statutory report, you will see that revenue and EBITDA would have dropped 25% and 27%, respectively. I mean for 9-month '24 versus 9-month '23. Now coming back, as I mentioned earlier, this is largely due to the effect of losing Siloam, right? If we did not lose Siloam, as you can see on a pro forma basis, both revenue and EBITDA would have improved as a whole. Underlying NPAT, as I alluded to earlier, improved from negative IDR 105 billion to IDR 411 billion, with NPAT currently sitting at IDR 18.7 trillion. The EBITDA by segment is also stable. As we can see, health care is stable at 26%. Real estate improved slightly from 25% to 26%, whereas lifestyle's margins improved from 22% to 27%, so all in all, I will say that the business performances is solid and we are continuing to improve year-on-year. And the structural change with the divestment of Siloam, along with the paydown of debt, has improved the overall operational performances of the business, so both the business operations and the structural improvement have led to the higher earnings that we can report for this year. This is another different view of looking at the same pictures. Again for the revenue, if we were to look at it on a statutory perspective, as you can see, compared to, let's say, 2 years ago, there's a decrease of 12%, but if you would look at it on a pro forma basis, it's an improvement of 26%. EBITDA is an improvement of 60%, and GP 30%. NPAT and underlying NPAT, I've covered earlier. A key difference in underlying EBITDA is that we excluded the IDR 300 billion write-down that Siloam performed in Q1 of 2024. If you recall, I've again explained to the public that there was a one-off adjustment that Siloam performed during Q1 of 2024 whereby it looked at some of the hospitals that was in the pipeline pre 2019, whereby they were cost committed, but Siloam has now decided that they will not go ahead with those hospitals. We have decided to do a one-off write-down of those construction in progress, and there was a one-off adjustment in Q1 of this year. So the underlying EBITDA basically exclude those one-off adjustments in order to get to a more like-for-like comparison in regard to business performances. Now due to the strong performance from the business operations going from revenue down to EBITDA, as you can see, operating cash flow has also seen significant improvement. Operating cash flow went from IDR 662 billion in 9-month '23 to IDR 1.15 trillion in 9-month 2024. Now that is a 74% improvement compared to what we were doing previously, yes. Now a lot of that, obviously, benefited from improved business operations. We also had better sales collections, for example, the Park Serpong projects and so forth. On the investing front, I mean you will note again I've reported this, I mean, to you previously, is that we've obviously had the divestment of Siloam. I mean, with that, we raised about roughly IDR 10 trillion. And part of that has been used to pay down debt, yes. About IDR 6.2 trillion has been used to pay down some of the bonds. And some of it will be used to pay down some of the syndicated loan. And as part of natural amortizations, we'll pay down some of our debt as well. Now after that, you will see that we still have IDR 6.8 trillion of cash as at the end of 9-month 2023 (sic) [ 2024 ]. Now that is obviously more than double, close to triple with what we have at the beginning of the year. And this is after a IDR 6 trillion paydown of debt, so definitely, I think, from a structural perspective, we are in very strong positions balance sheet-wise. This is again another pro forma view just for you to get a sense in regard to the deleveraging effect that it has from the paydown of the bonds. As again I presented in the last quarters, we receive about IDR 10 trillion from the proceed from the sale, divestment of Siloam. Most of it would have been used, I mean, for the paydown of bonds and syndicated loans and so forth, with some retained for other corporate purposes. Now if we were to calculate on a pro forma basis, if we were to assume basically all the liability management or reduction event happened at the start of FY '24, on a pro forma basis, you will see that, compared to 2022, our debt would have reduced by 62%, yes. So again this is -- looking at -- even at start of 2023, we have IDR 13.1 trillion. This is basically less than half of what we have at the start of the year on a pro forma basis if we were to assume basically all debts were to be repaid at the start of FY '24, yes, based on the proceeds from the divestment of Siloam. Similarly on a pro forma basis, interest would have reduced by 61%, close to IDR 845 billion. So these give you a sense on a year-on-year basis, right, if we have executed basically all the bond retirements, including obviously '25s and '26s, but as at the start of this year, the interest cost would have reduced by [ close to ] 61%. Again this gives you a sense in terms of what it would mean for 2025 and going forward. Again on a pro forma basis. As you can see, D/E ratio dropped [ from 0.92x down to 0.37x ]. And our interest coverage ratio improved [ from 3.57x, up to 4.35x ]. All that have led to positive rating actions, I mean, from our rating agencies as well. Moody's and Fitch have both upgraded LK's case ratings. We can see Moody's. We are currently sitting Caa1. And for Fitch, we are sitting at B-. And now the majority of our debt are also now denominated in IDR. This is as of 9-month '23. When the liability management is completed, you will see that basically all our debt will be denominated in IDR going forward. The debt maturity profile is also very manageable. I mean based on operating cash flow. As you can see, there's no immediate debt wall that we need to worry about. And the net debt has also decreased significantly. So in addition to the business performances that has helped to anchor, I guess, our cash flow and our margins, you can see that the structural improvement with a substantial reduction in debt and the [ substantial ] in -- reduction in interest repayment obligations has substantially improved our balance sheet and corporate profile. So moving on, I'm just going to go through each of our segment to give you a bit of a highlight and overview in regard to the business performances. Real estate, for 9-month '24, again we've been busy. We completed 76 landed projects, along with a number of low-rise and high-rise projects. As mentioned, we are on track to achieve our full year marketing sales target given that, as of 9-month '24, we've already achieved 80% of our target, hitting IDR 4.25 trillion. There are still new projects that are being planned and -- including The Hive that we will launch soon. And the financial performance has been solid with a 2% year-on-year improvement. And again, the handover has been on time. In fact, I will share later some of the handover we do expect to be ahead of schedules, for example, for our Park Serpong project, by the end of the year as well. So we remained committed, I mean, to basically execute on the strategy that has basically anchored us very well, I mean, for the last few years in regard to innovative affordable housing projects. And I do believe that, that will continue the -- to be the right strategy for Lippo Karawaci going forward. The full year target, as mentioned before, is IDR 5.375 trillion. We've now hit 80% of that. Based on that, we are likely to hit, if not exceed, this IDR 5.375 trillion targets that we have shared with the market earlier. We continue to have a large land bank which translate to over 25-plus years that would basically be able to sustain our growth perspective going forward. In regard to the highlight of the majority of marketing sales, again no surprise. The bulk of it is still landed housing projects, as I've shared with you earlier, but in terms of both volume and amount, it definitely is still dominated by that segment. And obviously Lippo Karawaci is still dominating a lot of the sales volume, I mean, followed by Lippo Cikarang and our other segments. Most of it will still be on mortgage. I think that profile has actually improved. Our bank disbursements has improved as well. As you can see, mortgage options has improved from 68% to 72%. And the bulk of our housing is still the affordable housing segment. As you can see, that is under IDR 1 billion mark, whereby the portion of that has improved from 64% in 9 month of '23 to 72% in the 9 month of '24. Here are some of the handover highlights. Again I won't go through in details. We are very excited to be able to hand over keys, I mean, to our new customers. But XYZ series, I mean, you know about, including the Q series of -- and The Hive. I think we've mentioned about some of these product offerings that we've had in the past, but we continue to have new launches. And as you can see from some of these statistics, the new launches have all been very popular. I want to highlight for example the XQ Livin at Lippo Cikarang, 590 units that we launched, a take-up of 94%; the XYZ living that we launched in Tanjung Bunga, 295 units, with take-up of 91%. So overall, I mean, we -- our products remain popular, which allow us to book the marketing sales that we have booked thus far. And these are, again, some of the recent launches. And the other thing that I'm very excited to share with you is that Park Serpong is progressing very, very well; and we do expect handover ahead of schedule. In fact, we do expect, by Phase 1, there to be handover, to start in December 2024. This is 4 months ahead of what we originally committed in terms of the 18 months delivery schedule, so very excited. And then we -- I think we would continue to look at ways to be able to improve our construction efficiencies to even speed up our handover further, I mean, for the launches; and to allow our customers to be able to get into their new homes earlier. Moving on to health care. Health care, again, Q3 is a relatively softer quarter compared to 3Q last year. Having said that, we still see that 3Q improved upon 2Q performances by 3.6% on a revenue basis and by 4.1% on EBITDA level. On a 9-month basis, as you can see, revenue improved by 10.8%, with underlying EBITDA, again that is excluding the one-off write-off from Siloam at the start of the year, improved by 8.2%, resulting in an underlying net profit of IDR 978 billion for Siloam, which is a 10.6% improvement. Now keep in mind this is -- these numbers is based on the -- Siloam's reported results. I mean not based on the consolidated results into LK because, otherwise, you're not getting a like-for-like assessment on the business performance for Siloam. So on the business performance for Siloam on that basis, as you can see, revenue has improved on a CAGR basis 13%, I mean, since FY '19 up to now; EBITDA by 32%. And well, for net profit is obviously much higher, going from a negative IDR 333 billion and to a positive IDR 1.247 trillion of -- as of FY '24 -- FY '23, sorry. And the quarterly performances, as you can see, is also showing, from 3Q '22 up to 3Q '24, revenue have been improving on a CAGR 11.7%, EBITDA 12% and net profit at 13.3%. A lot of our strategy, as I said before, is to focus on improving the revenue intensity, acuity of our service offering. So that allows us to have an industry-leading average revenue per occupied bed. As you can see, that continued to improve. From 2Q to 3Q, our average revenue per occupied bed improved by 10%. Average revenue per patient days similarly improved by 4% from 2Q to 3Q. Now compared to our other competitors, as you can see, our average revenue per occupied bed is substantially higher, compared to what other peers are doing. And that has been a deliberate strategy to anchor the growth in Siloam's revenues. EBITDA margin has remained stable. As we can see, drugs and clinical supplies as a percentage of revenue has continued to come down over time but, as of 9-month '24, is at 28.3% versus 28.7% in 9-month '23. EBITDA margins has been stable at about 30%, net profit margin also stable at about 14%, so -- and the contributions for [ payee ] group, we still find that the majority is still coming from the corporate and insurance. Corporate and insurance has remained stable in terms of its contributions, from about 49.8% in 9-month '23 to about 49.7% in 9-month 2024. Again some of you may know that is -- pressure from the insurance market in regard to -- again this affects all the hospital health care players to be able to manage claims and reduce the amount of claims that they are managing, but despite that pressure, you will see that the private and -- in terms of OPE, corporate and insurance, continued to grow by 3.7% year-on-year from 3Q '23 to 3Q '24. But obviously the BPJS growth has been higher, yes, by 9.8%, in comparison. These are some examples in terms of the successful execution of Siloam's strategy, whereby we continue to focus on having more advanced procedures and more advice, like, clinical programs. These are some of the recognitions that Siloam has received, I mean, over the last 3 to 6 months. Again I won't go through them one by one. And the CONGO. And I -- and again as -- I explained this before, CONGO, whereby we look at cardiology, oncology, neuro, gastro and ortho. This is kind of the 5 key focus craft group for us. And we are seeing that these focus craft group has seen good growth, yes, from 9-month '24 to 9-month '23. For example, you see that the oncologists grew by 9%. And orthopedic, another key area of focus for us, has grown by 20% (sic) [ 62% ]. So overall as a craft group, I mean, CONGO has improved its contributions by about 10.6% compared to last year. We are excited to say that there's still quite a number of hospitals in development at the moment, but some of it is extension of existing hospitals, including, for example, we are building a brand-new oncology center outside of our Lippo Village flagship hospitals. It will be given a brand name of MRCCC as well, same as what we use for Semanggi hospitals, whereby we do see that there is a significant interest in the -- our ability to be able to develop more advanced oncology service offerings. And we want to be able to build upon that and be able to offer similar services in our other hospitals, but Gubeng -- we're also very happy to report, I mean, we should expect Gubeng to be opened by somewhere in 2025. Again, we have limited presence in Surabaya. Gubeng would basically represent one of our key expansion into that market. Some of the other key projects in development, another 2 projects in Surabaya, at CITO and MERR; and a project in Semarang; Samarinda. And we are also looking at a potential hospital site at Kemang Antasari, so all in all, I think there's a lot of exciting development going on in Siloam as well to be able to basically further build upon the growth that it has experienced over the fast -- past 5 years. On to lifestyle. Of -- in regard to Lippo Malls Indonesia's, mall revenue has remained relatively stable, growing at 3%, with EBITDA stable at about 1%. There has been the various events that we have launched in order to further attract of -- we do see that, as a whole, there is a recovery in especially some of our flagship malls. We are also committed to ongoing improvement on our malls in order to make it a more pleasant experience for our shoppers, so there are a few projects in the works that we would expect completions to happen soon. On to hotel. For Aryaduta: Aryaduta has been improving quite significantly, if you look at it. Revenue has improved by 13%, with EBITDA improving by 21%. Margin for hotel has improved from 38% to 40%. That is as a result of a 8% improvement in average room rates, yes. Hotel occupancy has remained largely stable, moving from 66% to 67%, but overall we do see that most of our markets are recovering very well, I mean especially in Bali, after COVID. Tourists are coming back. We are seeing an uptake in a lot of MICE packages from governments, from corporates; and that has continued to benefit the growth of the Aryaduta brand. And we have had several initiatives to, again, promote the business and leisure segments; for example, in celebration of Batik Day, with a program to promote staycations and so forth. And those have had a very good uptake and interest from our customers. Looking ahead, we continue to be very positive and upbeat on the potential for our real estate segment. Our strategy, as I mentioned, has served us well, I mean, for the last 4 to 5 years; and we will -- want to continue to build upon the success. The distinctive products that we've had, including XYZ and Q series, we were able to replicate that in the -- outside of Park Serpong. As mentioned, in the -- in Makassar, in Cikarang, we've been able to launch similar products, with a very big uptake and interest from our potential customers. And as a result, we are fully on track to be able to hit our full year marketing sales target for the year. Siloam's focus on [ advancing complexities ] and focusing on its CONGO of -- craft group has definitely paid dividend. And that has continued to build up the brand recognitions of Siloam, and as a result, Siloam wants to now focus more on differentiating its various service offerings. As part of its next-gen Siloam's initiative, Siloam wants to build up alternative adjacent revenue source, including, for example, by looking into diagnostics; and also looking at further differentiating its hospitals into basically the premium [ archetype ] versus the value seekers and BPJS [ archetype ] in order to have a -- more dedicated service offerings for our target market. Lifestyle continue to see, well, various initiative, including asset enhancements, which allow our mall occupancy to remain stable. And that is anchored by also improvement in the hotel businesses, which we have seen continue to improve year-on-year. And we do believe that, that trend will continue. So that is basically a summary of the FY -- of the 9-month '24 performances. We are very excited with the progress, especially with the recent restructuring, which a lot of it, I have shared with you previously. And we look forward to the next phase of our journey. I maybe hand over the time to John. If -- John, do you have any closing remarks to make before we close for Q&A?

Yes. Thank you, Daniel. And good morning to all of you. Thank you for joining our call today. Look. I think Daniel has gone into the details of our 3 segments and some of the initiatives on the corporate headquarters side of things. Overall, I'm pleased with the [indiscernible]. I think this continues to be a story of just execution and discipline. It's been a difficult macro environment and continues to be. So Daniel mentioned or alluded to some of the challenges, some of the headwinds in the health care sector. In the past, I've mentioned some of the health -- headwinds in the real estate sector as well. That continues, if you take a look at the overall property sales market as a whole in 3Q versus the quarters before. We are seeing an overall slowing down or lowering in the levels of volumes of sales, so the environment continues to be challenging, but having said that, I think we as a management continue to just focus on making sure that we execute and continuing to find pockets of growth within what is overall -- what is generally a more challenging environment. So we'll continue to do that. I think, going forward, the theme for us is discipline and just to stay focused on executing across our 3 business segments. Let's move on to the Q&A, Daniel.

Yes. Maybe I'll just pick up some questions here. I mean, John, you might just pick up a few...

Yes. And I'll do the same. You go ahead.

So what's the long-term plan for Siloam? Now keep in mind LK continue to believe that Siloam -- LK continue to hold a strategic stake in Siloam. We still hold a -- 29%, so that is quite significant. Keep in mind that management structure has also not changed of -- and we don't envisage that, that will change going forward as well, so basically everything is business as usual, which means that definitely LK would still be very invested in working with our new shareholders in looking at Siloam's strategies. And we will definitely not be taking a back seat, yes. It will continue to be a key component and key part of our investments. In regard to -- look. We can't really comment on anything related to LMIRT, yes. There's a few questions on the -- LMIRT, whether we plan to invest more and so forth. There's no intentions at this stage for -- of LK to increase its stake in LMIRT. I guess that's what I can say. In regard to other items like LK -- [ LC ] rights issue and so forth. Again those are comments that we leave for [ LC ] to comment, I think. As a separate public listed company, we would not want to, basically, comment on another public listed company's perspective, so perhaps -- if you can park that questions and raise that with [ LC ] on a separate level. Yes, John, if you'll...

I'll add a short remark on the first question that Daniel responded to with regard to what Lippo Karawaci's long-term plans for Siloam are. Look. Lippo Karawaci built its first hospital in 1992. We opened our first hospital in 1992, and over the last 30-odd years, we've grown Siloam into what it is today. And so similarly today, we continue to take a very long-term view of Siloam. And the decision to divest that we did earlier this year in no way changes that. And this is if you see how we view -- our other investments happen the same way. So if you take a look at LMIRT: At some point, I think our ownership was down to like 28%, 29%. And then it went back up to like 55%, and today, we're at about 48%. If you take a look at Lippo Group's investments more broadly beyond Karawaci, the same thing; a company like Matahari Department Store. We've been invested in that company for over 30 years. At some point, we were at 80% ownership then we fell down to about 17%. Today, we're back up to 70% ownership as a group. And so we look at investments in Indonesia in a very long-term horizon. And so there are moments in time when we feel it's the right thing to do to take some profit, to consolidate; and that's what we've done in Siloam. Having said that, we continue to really like the business both from a financial but also from a social point of view and the impact that we can have on Indonesia. And for health care in particular, as all of you would agree, a lot of upside. And really I think, over the next 10 years, this is really the opportunity for us to continue to grow and perhaps build a business that's very substantial maybe to a scale of like [ $1 billion ] in EBITDA. That's certainly sort of where we're looking at. So we love the business. We love the sector. And we like the fact that the business is the market leader in this segment. And so we intend to continue to be investors and part of the Siloam story for the foreseeable future. There's a question on government policy having a positive impact on residential property VAT. There's been a lot of discussion around what the new administration will do in the housing space. And some of you may have seen the articles. Generally the high-level thinking around real estate that the new government seems to have is how it can use the real estate sector as one additional growth engine for the Indonesian economy, so you'll see them referring to the -- to what the Chinese government has done over the last 30, 40 years. Obviously, in the last 10 years, a little bit overboard and a lot of leverage in the system, but in the earlier years, the real estate sector played a very productive and meaningful role in growing the economy; and so it seems like the government does have some thinking around doing the same. Having said that, very little detail has been shared up until this point. And so certainly we welcome the government's interest in the real estate sector. And they're recognizing that the real estate sector does play an important role in the economy. With regard to rumors around VAT breaks, things like that. I think those are all speculative in nature at this point. We continue to follow the developments around policy and we'll keep you posted should there be any meaningful developments. A question on Park Serpong having done very well and marketing sales having achieved 79% of [indiscernible] the slowdown in the industry. Look. If you take a look at the top 3, 4 developers, including ours, you're right that on the surface you don't see a headline -- you don't see a slowdown. We've achieved 79% of full year targets. Other developers of our peers have done the same, but I'd say that I still describe the overall macro environment as challenging because, I think, 2 things. If you take a look at how we're able [ to achieve sales ], I would say that we are taking a very disciplined approach on price points. And so these numbers are being achieved on the back of relatively conservative year-on-year price increases. And ultimately if you take a look at what is the yield on the land that we generate, and that's what ultimately we care about as developers, it's a soft market. And to the extent that we try to increase prices too much, volumes drop very fast. And also, whenever you see -- the moment price points also go beyond IDR 1 billion and IDR 1.5 billion, again you see volumes drop quite significantly. And so as I alluded to earlier, we are able to achieve the numbers that we're achieving, and I think, similarly, our peers, because we're taking a much more conservative view on margins. We're taking a more -- a less-aggressive view on price increases and making sure that we really deliver the right product at the right price points and somehow try to engineer the right margins for us as well. So it's a tricky market to navigate, and I'm grateful that we've been able to achieve the numbers that we have. Having said that, it does -- well, if you take a look at things in totality, it does reflect a slowness in the industry. That's the first way that I'd answer your question. The second way that I'd reconcile our numbers with my view on the market is, if you take a look at the 3 or 4, 5 top developers, you don't really see a slowdown on the surface, but if you take a look at overall numbers as a whole or as an industry, there is that slowdown. Maybe, in our next earnings calls, we will spend a little bit of time talking a little bit about macro numbers and referring to some of the reports that's out there, but you'll see, for example, that 70% of the demand pool in Indonesia are for houses at a price point of under IDR 500 million. And so it's a price point oriented market. And you'll see that, at the lower end of the price point market and certainly anything below IDR 1.5 billion, volumes have dropped. So we'll spend a little bit of time on that perhaps in our next earnings call.

Yes. Other than that, I think we've answered all the questions. I mean, '25 bonds, yes, certainly we intend to pay that off at maturity. That was covered in the deck earlier. Yes, Randi, did we miss anything? I think we've covered all the questions.

I think we have covered everything. Any more questions from the audience, please? Okay, if not, maybe -- do you have maybe some closing remarks by John or Pak Daniel before I close the session?

Not for me. Appreciate everyone's time and look forward to keeping in touch.

Yes. Anything, Pak Daniel, maybe...

[indiscernible], yes. Thank you, Randi. No further comment from me.

Okay, okay. Thank you, Pak Daniel and Pak John. And thank you for the participants attending Lippo Karawaci 9 Months 2024 Earnings Call. We will share the material after the call. See you again in our Full Year 2024 Earnings Call. Have a good day, everyone. Bye-bye.

Thank you, everybody.