PT Lippo Karawaci Tbk ($LPKR)

[Audio Gap] My name is Agus Arismunandar, Head of Investor Relations, and I'll be your host today. Presenting our full year 2025 results will be Pak Fendi Santoso, our Group CFO, and during his presentation, you can submit your questions using the chat box features, and then we will answer your questions in the Q&A session that follows the presentations. Pak Fendi, I think you can start the presentation.

Thank you, Pak Agus. Good morning, everyone. Thank you for joining our earnings call today. I'll be taking you through the financial results of 2025 for LPKR. Let me just go straight jump into the business performance highlights for 2025. Our real estate revenue on our real estate pillar, marketing sales, we're pleased to report that we've reached -- we've booked at about IDR 5.3 trillion of marketing sales. This is 85% of what we've targeted to achieve in 2025, slightly below, and this is on the back of quite a subdued consumer buying power in 2025 that everyone experienced across not only on the property sectors, but all consumer-facing businesses. But nevertheless, we are still able to find pockets of opportunity for growth and able to sustain our performance and with focus on, obviously, the segments of more affordable landed housings in our markets. Revenue for the real estate, we clocked in at about IDR 7.7 trillion, which is about 52% increase from last year 2024. And this is driven by a very strong handovers across all our landed residentials high-rise and commercials. In particular, in our developments in Park Serpong, which we launched late in 2023. We've managed to deliver most of the marketing sales that we had then in 2025 and also the handover for the Meikarta units in 2025. So that supported our revenue for basically the drivers of our growth in revenue in 2025, whereas EBITDA rose by about 4%. We've recorded a IDR 1.15 trillion of EBITDA. And this is slightly lower than, obviously, the top line growth because of the drags from some of the legacy products that we handed over this year that had a much lower margins compared to the others. We've -- in the 2025, we launched a few of our newly premium -- newly large premium series innovations, Belmont Homes, Bentley Homes and The Allegra is one of the few that we've introduced to our customers in 2025. Obviously, we've also continued to innovate on our affordable housing series, including the TreeTops Livin, Gold Livin, Bronze, Quartz Livin, which I'm going to show you some pictures later on in the next few slides. On our lifestyle business, which comprises of malls and hotels, revenue booked at about IDR 1.4 trillion with EBITDA increases by about 16%, hitting at about IDR 448 billion in 2025. And this is mostly driven by our mall business, which continued to see improvements in all our key operating metrics with the footfalls for -- reached at about 11 million visitors per months, marking about 5% year-on-year, whereas the occupancy also improved from about 81% in 2024 to 86.5% in 2025, which is about a 7% increase year-on-year. On hotels, it's a pretty challenging year for a lot of hospitality business across Indonesia given the budget cut spending that was introduced by the government in the first quarter of 2025. But nevertheless, we have continued to see improvement across the year from Q1, Q2, Q3 and Q4 with occupancy continue to strengthen and average hotel room rates able to increase by about 2% year-on-year. Now in terms of revenue for 2025, overall consolidated basis, we've book at about IDR 9 trillion of revenue, which is slightly lower compared to last year in 2024 at IDR 11.5 trillion. And this is because of, in 2024, first half of the year, we are still consolidated Siloam as part of our subsidiaries in Lippo Karawaci. So that's the reason why it was IDR 11.5 trillion. Now if we were to assume that Siloam was to be deconsolidated in '24, it will reduce the revenue to IDR 6.5 trillion sold. On a like-for-like basis, our top line has actually improved by about 38% year-on-year. This is driven by, again, the real estate developments that I alluded earlier in the previous slides. On the EBITDA, total 2025 closed at about IDR 1.7 trillion, lower compared to last year's, and this again because of the Siloam still being consolidated. If we were to do a pro forma on the deconsolidated Siloam, our revenue is actually increase on -- our EBITDA actually increased by about 4% on a like-to-like basis. Now moving on to the P&L. I've already touched on the revenue and EBITDA, but our underlying NPAT is about IDR 630 billion for the full year 2025, grew from last year IDR 402 billion, grew by about 57%. And this is driven by improvements in income from associates because of the deconsolidation of Siloam. Now so for the full year of 2025, we've recognized income contribution from Siloam in income from associates and plus also improvements in the income contribution from Siloam. Our net interest expenses also continued to improved lower by about 61% to IDR 326 billion. This is in line with the liability management that we've initiated, that we've introduced since a couple of years ago and as we continue to delever our balance sheet. On the bottom line, NPAT IDR 170 billion. And obviously, this is not comparable to the previous year given that we had a lot of one-off gains from the big -- from the sale of Siloam and also the deconsolidation of Siloam that we enjoyed in 2024. Our cash balance remains extremely strong. So we closed the year at about close to IDR 2 trillion of cash balance. Now our focus in 2025, as you can see, is mostly on delivering our projects to our customers. And as such, the outflow for payments to contractors has been pretty strong. Net interest expenses continued to improve. Last year, we had IDR 935 billion of interest -- net interest expenses, which dropped to IDR 142 billion. And also, we continue to pay down and delever our balance sheets and the reason why it's negative cash from financing activities. Now on the last years, we've managed to refinance our syndicated loans with BTN loans, which basically improve our cost of funding by about 70 basis points. So now we are paying about BI 7-day rate plus 1.4%, which is pretty strong for a real estate play like Lippo Karawaci. Balance sheet has improved quite considerably. We've paid all our U.S.-denominated loans in 2025. So today, I'm pleased to report that all our interest-bearing liabilities are all in rupiah, which has basically eliminated the FX risk from then onwards. Our historical net debt is -- has been very low compared to the previous years at about IDR 4 trillion with debt maturity profile is pretty linear, and this is on the back of the refinancing that we had last year. Moving on just to real estate overview. In 2025, it's pretty a busy year where we've launched close to about 12 launches in 2025. With Lippo Karawaci, we had about 6 launches throughout the years. Lippo Cikarang, 3 launches and Tanjung Bunga 3 launches. We sold about 98 projects of land residentials and about 6 high -- mid-, low- to high-rise projects and 21 shophouses projects. So it's pretty a busy year last year. And we continue to see that this year will remain busy. And our focus is still going to be continue to diversify our portfolio, not only in our existing market, but also expanding to new markets with a focus on affordable housings for young families with extensions to premium residents for mass affluent segments. Now this is the evolution of marketing sales. If we compare to 2029, we've almost tripled of our marketing sales with the latest 2025 at about 5.3. And we'll continue to have about -- continue to have a pretty ample land bank that we can leverage which roughly has an estimated of gross development value of about IDR 155 trillion, and this is comprised of about 1,300 hectares of land banks that we have. Marketing sales in Lippo Karawaci continue to be dominated by landed housing at 79%, followed by shophouses in Lippo Cikarang. Similarly, landed housings 57% of the total marketing sales in 2025, followed by commercial landed and also land plots comprising of about 33% to the marketing sales. On the payment method, mortgage still dominating at about 64%, followed by installment at 21% and cash at 15%. And this is -- basically indicates that the majority of customers that -- the majority of buyers of our properties are all mostly end users. With the ticket size still dominated by affordable homes at about 2/3 of our marketing sales below IDR 1 billion ticket size and followed by between IDR 1 billion to IDR 2 billion, 24%. So the majority is actually below IDR 2 billion as we continue to focus on more affordable products. This is just the highlights of the handovers in 2025 across all our developments. In Lippo -- in Park Serpong, 3 clusters that we introduced in Phase 1, Cityzen Park East, Park North and Park West, mostly completed handover by about 97% to 98%. In Lippo Village, also the same, between 88% to 99% fully handed over to our customers with slightly newer product that we've recently launched in Cikarang XYZ Livin Phase 1 and The Hive Neo Patio. We started to do a handover, completed 25% for XYZ Livin and 3% for The Hive at Neo Patio. Just to give you a sense on the product innovations, and this is some something that I'm personally very proud of the team. We've continued to be on the frontier on product innovations. We've introduced these 3 stories landed housings last year, which attracted a lot of interest from our customers, the Gold Tops and the Treetops. Price ranges between IDR 650 million to IDR 900 million, which is still below IDR 1 billion, and also continue to evolve our 2 stories landed housings, ranging from the Urban to Gold series with starting price of about IDR 300 million per unit. So now moving on to Lifestyle. Lippo Mall, just to recap, Lippo Mall Indonesia is the largest mall developer and operator with 59 malls managed nationwide in over 39 cities across Indonesia with net leasable area of about 2.5 million square meters. We have a very well diversified tenant mix across supermarket, department stores and F&B, leisure, fashion, supported by some of the strong international and local brands. In terms of performance, it continued to be very strong with top line increased by about 7% at IDR 729 million for the full year 2025; EBITDA at IDR 173 billion, increased by about 7% compared to last year; the margins at 24%. We have continued to see all operating metrics in -- across our malls continue to improve with mall visitors improved by about 5% to 11 million per month and occupancy rate improved from 81% to 86.5% in 2025. This is just some of the activities that our malls conducted in 2025 -- in the fourth quarter 2025, particular in Sun Plaza, Medan, the Baby Shark Camp was hosted, getting a lot of attractions from the families in Medan, the Palembang Square where we've also launched the new atriums, which strengthened our offerings for our customers in Palembang. And also Senayan Park also introduced this event drone show that attracted a lot of attention from people in Jakarta, it went viral in some of the social media. So it's pretty much strengthened the position of Senayan Park as a leading lifestyle entertainment destinations in Jakarta. On hotels, again, to recap, we exist in about 9 top cities across Indonesia with 10 hotel properties and also couple of leisure facilities. Now in terms of market last year, as I mentioned earlier, it was not an easy year for hospitality business last year given the government budget cut spending that was introduced in the first quarter of 2025. Our revenue slightly declined by about 5% in 2025, registered at about IDR 474 billion with EBITDA at IDR 164 billion, dropped by about 70%. Occupancies obviously contracted 69% to 64% in 2025. However, we managed to improve our room rate by 2%. Now in 2025 alone, we are seeing that things are recovering on a quarter-to-quarter basis. So we are continuing to see that in 2026, things will continue to progress, and also we are starting to see that the market recover, and we are able to improve our occupancy back to where it was in the previous years. So that's all from me. Now I'll give it back to Pak Agus for the Q&A sessions.

Thank you, Pak Fendi, for the presentation. We will now start the Q&A session based on the questions that we received. However, I don't see any questions yet in the chat box -- in my chat box at least. Pak Fendi, do you see any questions in your chat box?

Yes, I haven't seen anything. Probably we'll wait for a minute or so. Happy to take on questions from participants, if there's any.

Yes. [Operator Instructions] Okay. I think there's one. How much is the Park Serpong project has been launched? And how many hectares are left? Pak Fendi, would you like to take these questions?

Sure. I think, so far, it's probably about 20%, 30% of the area that we've earmarked for the real estate development in Park Serpong has been launched. So we still have about -- still have ample land banks that we could develop in Park Serpong. I cannot -- I don't remember the exact numbers, but I'll get back to you on that.

Yes. So if you remember, the 7Wonders projects, that's the seventh phase of the Park Serpong project. So we have completed 6, and right now, we are on Phase 7. Thank you for the question. And then the next one, what is the government's budget for hotels in 2026? And how does the company view the hotel sector in 2026? Will that improve back to the 2024 level? Pak Fendi, do you have any visibility to the government's budget?

I don't have the exact government budgets for travels and events and whatnot. But as we are seeing improvements in quarter-on-quarter on government spending in events and hotels, I think we should -- if the trend continues, we should be seeing 2026 continue to improve. And from what we see that we are hopeful that the performance will improve back to 2024 level as you suggested. Is there a possibility of increasing the price at Park Serpong? Yes, of course. So this is something that we are seeing as we evolve from Phase 1 to Phase, I believe, 9, the latest launch. We continue to see the price point continue to increase. With, I think, the improvement in access to the other cluster and developments within Park Serpong, we are going to introduce a more premium products in Park Serpong. So that will improve the pricing for the secondary home as well as for the new launches. So yes, the short answer is yes, we continue to see -- we are continuing to push for an increase in price point in Park Serpong. Is there any presales guidance in 2026? Yes. So our guidance for 2026 is IDR 6 trillion of marketing sales. Now this is on the back of -- we think that 2026 continue to be slightly more subdued given what's happening geopolitically across the globe as well as while we are seeing things are improving in terms of buying power, we remain optimistically -- cautiously optimistic of the situations in Indonesia for 2026. Any latest update on Meikarta and how much land handover is left? So I think the majority of the handover has been complete in 2025. We still have about slightly more than 2,000 units that we need to hand over until 2027. But we are optimistic given that the volume that we've completed and handed over in 2025, this should not be ambitious. I think we covered all the questions, Pak Agus.

Yes. Okay. Thank you. Because we don't have any more questions, with that, I think we have reached the end of today's earnings call. The presentation material will be sent to you shortly after this. I would like to thank you, everyone, again for attending Lippo Karawaci's Full Year 2025 Earnings Call today. And we wish you all a very good day ahead. Thank you again.

Thank you, everyone. Have a good day.