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Lippo Karawaci Tbk (LPKR) reported its financial results for the second quarter of 2025, revealing a 35% increase in total revenue to 4.1 trillion rupiah. The company’s EBITDA declined by 13% year-on-year, reaching 627 billion rupiah. Following the earnings release, LPKR’s stock saw a decrease of 2.02%, reflecting investor concerns over the mixed financial performance. According to InvestingPro data, the company maintains a GOOD financial health score of 2.63, despite trading at notably low valuation multiples. InvestingPro analysis suggests the stock is currently undervalued, with 15+ additional insights available to subscribers.
Key Takeaways
- Lippo Karawaci’s revenue surged by 35% year-on-year in Q2 2025.
- EBITDA fell by 13%, indicating margin pressures.
- The company retired all US dollar-denominated debt, now relying solely on rupiah loans.
- Stock price dropped by 2.02% following the earnings announcement.
- Mall operations showed resilience with a 9% growth in revenue.
Company Performance
Lippo Karawaci displayed robust revenue growth in Q2 2025, driven by strong performance in its real estate and mall operations. Despite this, the company faced challenges with declining EBITDA, highlighting ongoing margin pressures. The strategic move to retire US dollar-denominated debt and focus on rupiah loans is expected to stabilize financial operations in the long term.
Financial Highlights
- Total Revenue: 4.1 trillion rupiah (35% increase YoY)
- EBITDA: 627 billion rupiah (13% decrease YoY)
- Net Profit: 138 billion rupiah
- Cash Balance: 6.5 trillion rupiah
- Significant reduction in net interest expenses from 645 billion to 80.74 billion rupiah
Earnings vs. Forecast
The company’s actual EPS was -0.45. The substantial revenue growth did not translate into earnings per share improvements, which may have contributed to the negative market reaction. The lack of positive EPS might have been a factor in the stock’s decline.
Market Reaction
Following the earnings announcement, Lippo Karawaci’s stock price fell by 2.02%, closing at 97 rupiah. This movement reflects investor concerns over the decline in EBITDA and the negative EPS. With a market capitalization of $422.58 million and a price-to-book ratio of 0.21, InvestingPro analysis indicates significant potential upside. The stock’s current valuation metrics, including an EV/EBITDA of 3.56, suggest it may be undervalued compared to peers. Discover comprehensive valuation analysis and more with InvestingPro’s detailed research reports, available for over 1,400 stocks.
Outlook & Guidance
Lippo Karawaci is targeting 6.25 trillion rupiah in marketing sales for the full year, with expectations of improved sales in the second half of 2025. The company anticipates a positive impact from a reduction in Bank Indonesia’s interest rates, which could stimulate consumer spending in the real estate sector. InvestingPro data shows the company maintains a strong current ratio of 4.43, indicating solid short-term liquidity, though analysts anticipate a revenue decline in the current year. Get access to detailed financial forecasts and expert analysis with InvestingPro’s comprehensive research tools.
Executive Commentary
Pav Hendi Santoso, Group CFO, stated, "We continue to see that our business to be quite resilient," emphasizing the company’s ability to navigate current economic challenges. He also expressed optimism about future sales, noting, "We are hopeful that marketing sales will improve in the second half of the year."
Risks and Challenges
- Economic conditions remain soft, potentially affecting consumer spending.
- Margin compression due to apartment deliveries could continue to impact profitability.
- Fluctuations in interest rates may influence financing costs and consumer mortgage rates.
- Competition in the real estate market could pressure pricing strategies.
- Currency fluctuations pose a risk, despite the shift to rupiah-denominated debt.
Q&A
During the earnings call, analysts inquired about the company’s plans for its Siloam stake, which management confirmed they have no plans to divest. Questions also focused on margin compression and potential cost savings from rate transactions, highlighting investor concerns about profitability and operational efficiency.
Full transcript - Lippo Karawaci Tbk (LPKR) Q2 2025:
Randy, Head of Investor Relations, Lippo Karawaci: Let’s start. Good afternoon, everyone. Please welcome equity investors, regulators, and credit rating agencies to Pepeli Pokarawatchi first half twenty twenty five earnings call. Today, as a moderator, I’m Randy as a Head of Investor Relations. With me today, we have Pav Hendi Santoso as a Group CFO.
Today, we will present our first half twenty twenty five results followed by question and answer. During the presentations, you may drop your questions on the chat box. Without further ado, please, Pafenvi, to continue with presentations. Thank you. Head over to you, Pafenvi.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Thank you, Randy. Good afternoon, everyone. Thank you for joining our earnings call that we’ll talk about first half of the results of the Pokarawatchi TBK. So let me just go straight to the highlights for the first half of the year. I think despite of the, you know, soft economy and the the buying the the, you know, the buying power of the digital consumer that’s been that that’s that that’s come down for quite a bit this year.
We continue to see that our business to be quite resilient, especially on our real estate and and health care, whereas some some of our lifestyle segments, especially hotel, has faced a bit of headwinds, which I’ll talk about a little bit later. On our market on the real estate segments, our marketing sales hit 2.5 trillions, achieving 40% of our full year target, which is 6.25 trillions. Our revenue grew by about 51% to 3.5 trillions, and this is driven by a lot of end movers that we’ve done across our Lipo Katawachi projects, in particular, as well as one in Lipo Chikarang, with EBITDA remained stable at about four five hundred twenty six billion. Lifestyles overall stables. Revenue hit at about 659,000,000,000 with EBITDA increased by 41% to 213 billions.
Most relatively doing well. We are seeing our visitor has come up, and and occupancy rate has improved year on year. Hotel, as I mentioned to you, quite facing quite headwinds, and this is the despite group hotels grew by about 10% and occupancy strengthened quarter on quarter. But but but we’ve, we’ve, faced headwinds. I think this is, a challenge is that, all the hotel industry are facing with a government budget cut that that being introduced by the governments starting earlier this year.
Health care continued to be quite resilient with revenue increased modestly by about one half percent and EBITDA by 1.3 trillions. Now in terms of the p and l, we’ve we’ve booked a revenue of 4.1 trillions, and this is compared to 8 trillions of metal last year. But, obviously, there were some effect there there that that we did enjoy the deconsolid the consolidation of Silom that we have enjoyed in the first half of the last year. So if we remove that Silom deconsolidations, we will be looking at about 3 trillions of revenue in the first half of the year. So that’s a 35% increase for the 2025.
On a EBITDA on a EBITDA, on a pro form a basis, 722. And on the the first half of the year, we’ve registered 627,000,000,000 of EBITDA down by 13%. And then this is driven because of the margin compressions that we’ve that that we experienced in our real estate development business. Overall, this is the p and l. We’ve talked about the revenue and EBITDA.
Our underlying impact for the 2025 is 208,000,000,000, increased by 36% compared to last year, 153,000,000,000. And this this is the driven by, improvements in net interest expenses on the financing cost where we’ve reduced by about three quarter of our cost compared to last year’s, and also an improvement in income from associates because of the improvements in Lamir in Lamir contributions as well as because Silom has now been deconsolidated and being counted as part of the associate income. MPEG, 138,000,000,000 bottom line for for the year. Obviously, this is much lower than last year because last year, we’ve enjoyed, a lot of one off gain from the sale of the Silom as well as the impact on the deconsolidations of Silom, which give us about 19.7 trillions of profits in the 2024. Our liquidity remained pretty strong.
We closed our first half with 6.5 trillions of cash balance. We’ve seen a lot of improvements from the net interest expenses where last year, we’ve spent about 645 billions. Now it’s only $8,074,000,000,000, so significant deductions on the financing costs. We’ve also managed to secure an an, you know, refinancing of our previous syndicated loans with the new BTN loan facility with improvement in in the cost of fundings. Now we were getting about BRE plus 1.4 to 1.75% margins, which is about six 60 basis points improvements from our previous syndicated loans.
So that will will continue to improve our financing cost moving forwards. Balance balance sheet strengthened. Now, say, since earlier this year, we’ve managed to retire all our US dollar denominated debt. Now we are fully 100%, rupee loans. So it’s it’s got a complete match between our, revenue and cost.
We’ve also the refinancing that we did with BTPN, we also improved our maturity profile. Previously, it was up to 2028. Now we’ve pushed it back to 02/1932, so that will improve our cash requirement for that servicing. So it’s we’ll we’ll we’ll ease up our our cash requirements for for the immediate terms for that servicing ratio. So let’s move on to, the business highlight for this, each segment.
So all the real estates in the 2025, we’ve sold, 19 projects of landed residentials, about nine low to high rise projects, and then 16 projects of shop houses. We’ve talked about the marketing sales performance, and the majority of this marketing sales still being concentrated in the landed housing by 67.7%. We’ve made about nine launches in the for the for the first six months of the year, three launches in Lipokarawachi, three in Chikarang, and three in Tanjobum and Makassara. Now on just on just bit more detail to the marketing sales that we’ve done in the first half of the year, 2.472 compared to the full year target of 6.25, as I mentioned earlier, 40% achievements. Majority of the marketing sales came from Lipo Karawaji’s residentials, followed by Lipo Chikaras.
We’ve managed to get a a land plot of 41,000,000,000 for the first half of the year. This is close to what we’ve targeted for the full year. And in terms of land bank, we still have very ample, lending that we can develop with an estimated total gross development value of 155 trillions. Just a breakdown of the marketing sales. The Lipokarawaji still dominated by landed housing, 77% of total marketing sales that we did in Lipokarawachi.
Lipokarawachi is a bit more balanced, forty seven percent’s landed housings and forty percent’s commercial. In terms of the payment mode, it was still dominated by mortgage, which account about 63% of our marketing sales. And the majority of our marketing sales still dominated by the affordable housing product, which is a product that is below 1,000,000,000 per unit, which still account for about 67% of the marketing sales that we’ve made in the first half of the year. This is just to give you some highlights about the project of the Hanover units that we’ve done for the first half of the year. A lot of those are coming from Pakistan, the the Chindana Citizens Park and Chindana Citizens Park North, also some of the units that we’ve built in Lipo Village and Lipo Chikaran.
And this is just to give you some picture to the product innovations that we’ve done within Lipo Karawachi, the premium house homes that we’ve recently developed, the Belmont Homes and the Bentley Homes. These are the two products that we’ve introduced in Lipo Village, which actually done pretty well. The marketing sales for the year is actually a lot better than what we’ve projected for these two products. The Alaga products is the premium product that we’ve launched in Lipo Chicaram. This is actually one of the, we we haven’t really launched a premium products in Lipocikara for quite some times, and this is the first time we’ve, we’ve we’ve done so, for Lipocikara.
And we were very encouraged to see that the demands for these products in Lipoci Caram still remains robust. We are getting a lot of, a very good marketing sales, for these products, beyond what we’ve, initially expected. Now also, Black Slate is we’ve introduced this in Tanjongbonga, and the tractions are pretty positive in Makassar. We’ve also introduced some of the new innovations on the affordable homes, in particular, this three tops living, which is a three stories landed house that we’ve going to launch in. The launch will will be conducted in, I think, the next three, two weeks.
This is a three stories on a 40 square meter lands and about 75 square meters building area, a price at about 629,000,000. So that’s on on the property, home developments on Lipo malls. Just to recaps, you know, we’ve managed about 59 malls nationwide in 39 cities across Indonesia with a net visible area of about two and a half million square meters. Very well diverse diversified tenant mix. And then this is in terms of our mall portfolio compared to our competitions, and then just the some of the names of the tenants tenants that is occupying our malls.
Now in terms of the performance revenue, our mall revenue actually grew by about 9% with EBITDA up by 11%. Margins remains pretty stable at 25%. Now our mall officers also grew by about 10% year on year compared to last year’s, and occupancy continued to be strong and increased by about 5% compared to last year. And this is just us to give you some activities that we’ve done in our malls. We’ve signed up with Dust in in two of our malls, Malang Town Square and Plaza Madame Fair, and also Samsung in few of our malls.
Some of the picture that team has taken from the event. We’ve also done, you know, an event with the the government of Jakarta on our on Jakarta forty nine four hundred ninety eight anniversaries with the opening of the ceremony done in our mall, the mall in Santa Clara, and was which was attended by the government himself the governor himself. This is also the signature event that we’ve always always done annually, our back to schools. This is done in June with with few of our activities across our malls. Now on the hotel, as I mentioned to you, we’ve we’ve managed about 10 hotels across nine cities with two leisure premises, the golf club and also country clubs.
Now in terms of revenues, down by 5% and EBITDA down by 22%, and this is predominantly driven by a lot of our hotel that’s been enjoying a lot of events from the ministry and also says state on the process has been facing decline because of the government spending cuts that was introduced earlier this year. Now that being said, on the positive note, we are starting to see the performance coming back in July as the minister of finance actually, opened up, partially, the budget spendings of the governments, starting things starting June, July. So that made, positive contributions to the hotel industry, and we are seeing that also in our hotel business. On the health care, segments, the revenue modestly grew by one half percent to 4.7 trillions, where EBITDA was recorded at 1.3, 21% increase. However, there are, you know, one off one off nonoperational that we’ve enjoyed last year.
If we remove that, our underlying EBITDA will be minus 5.8% year on year with net profit of 476 up by 10%, again, because we’ve been we’ve enjoyed one off benefit out of the the the noncash write offs that we’ve had last year in in in our health care business. Overall, through the outpatient has increased from 2,069,000.000 to 2.86, but, however, we are seeing conversions actually coming down from three to 2.9, slightly coming down, and this is impacted into our inpatient admissions down by seven point seven percent. And, also, our hours actually come down by about two point six point nine percent, resulting in occupancy rates coming down by six point two percent. Now on the positive note side, even though the impatient’s coming down, we are seeing our ARPOP average revenue per occupied bed actually increased by 8% year on year at 1,780,000.00, and our revenue per patient days also increased by about 3% to 6.8. And this is still relatively higher than, you know, our our competitions as we benchmark with with them.
That’s all from Lipoculture. And looking ahead, I mean, we’ll continue to we are we we continue to deliver and then innovate on our home developments business with the both premiums as well as affordable housings. We are still aiming for delivering our full year target of 6.25 trillions on our lifestyle business. We are hopeful that the hotel the recovery on hotel business continue to happen in the first half of the year, and we’ve we continue to see that the mall performance improving, in the second half of the year. And also with our health care business, with the advancing of the, the next gen Silom strategies, we’re able to believe that, Silom is well positioned to capitalize the potentials growth of the health care business in Indonesia.
I’ll pause there just to see if there’s any questions from everyone, and I’ll pass it back to Randy for the q and a sessions. Thank you.
Randy, Head of Investor Relations, Lippo Karawaci: Thank you, Pafendi, for the presentations. Yes. Actually, we have couple of questions in the q and a box, Pafendi. You may maybe answer. I’m starting it.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: I cannot see the q and a session, though. Hold on. Let me just. Oh, yeah. Yeah.
Yeah. I see that. Yeah. Okay.
Randy, Head of Investor Relations, Lippo Karawaci: Maybe from Brian first, maybe. Yeah.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Happy to see Chris Hassan over and somewhere. Please. Yeah. I think, you know, obviously, BI has just reduced the BI rate to 5%. And, obviously, this will impact positively to the, you know, the home, the, you know, the sale the the the marketing sales for our for how how our housing business.
So we we we are anticipating that marketing sales. We are hopeful that marketing sales will improve in the second half of the year. And thus, you know, we are optimist that we’re able to deliver our full year target of 6.25 trillions by December.
Randy, Head of Investor Relations, Lippo Karawaci: Thank you. Thank you. So maybe, let’s maybe move on in into the last question because it’s also related with the presales. We, achieve 40%. Will the guideline will be revised?
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Or Yeah. So we were still aiming for our guy our guidance of 6,250,000,000,000.00 marketing sales. You know, we we will have about we have few new launches for the remaining years in, I think, in new cities too. So we are looking forward to see that that that coming to play in second half of the year. So, yeah, we’re still we’re still guiding for 6.25 of marketing sales for the year.
Randy, Head of Investor Relations, Lippo Karawaci: Thank you. Maybe next question we cover from Rafi Manwani about the Siloam buyback. Maybe any further investment from us or Andy?
Pav Hendi Santoso, Group CFO, Lippo Karawaci: For Rafi, so I may just I wanted to ask about Silom. Actually, there’s reports and buyback of leap over plan for the divest stake. I mean, this is divest stake from Silomia. So we don’t have any plan to divest or buyback Silom series today. I think from the that’s from the Lipo Karachi standpoints.
But the the buyback plan for Siloam share buyback from Siloam, I’m I’m not I’m not to to I don’t I don’t see any plan. I don’t at least I don’t act I don’t know of of such plans, but this is probably the question that you can that’s the that’s made to this long team.
Randy, Head of Investor Relations, Lippo Karawaci: Thank you. Maybe about the margins of the apartments.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Okay. I cannot see that question.
Randy, Head of Investor Relations, Lippo Karawaci: The next one. Which one? This is from Ravi.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: I also wanna see the margins apartments lesson. You give clarity. Yeah. So so there are apartments that we’ve delivered, especially in Lipo Chikarang and and and and MSU that we’ve delivered so far. I think I think that’s about six four thousands, if I if I recall correctly, three to 4,000 units that we’ve delivered this year that has a very low margins because of the delayed in the developments.
So that’s actually negatively impacted our margins for the year because of that those handovers.
Randy, Head of Investor Relations, Lippo Karawaci: Maybe the last question will be from Paromin. Pavendi is quite long. Maybe you can answer.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Savings. Yes. So the rand subsidy savings, once the first rates happens, will be about 400,000,000,000, plus 400,000,000,000, rupee. So this is something that we’ve been working on. We expect that the the first rate transactions will be completed by end of end of this year.
So we are looking forward for that that cost savings that we’ll enjoy starting next year. What a strategy in place to reach for yeah. So for the the to to catch up with our presales target for the second half of the year, Obviously, there are a few launches that we’ve already have, in in our pipelines, including, one in in in new cities. So that’s, we will, we will share that in in more details once we’ve confirmed the date and the launches. Also, with a few innovation that we’ve made, in particular, the new products that we’ve launched in in for the phase five of that we launched in end of end of August.
I think that will continue to drive our presales marketing sales. The rental reversions, I I don’t think that would you know, the majority of our rentals are fixed rate. We do have some revenue sharing rental that we’ve done with our tenants. But I think overall, we are continuing to see that the traffics are increasing year on year. So we’ve we’ve we’ve we’ve we are optimistic that our mall business continued to perform this year compared to last year.
In terms of how is the portfolio on Europe versus pre COVID, a lot of them are actually already back to pre COVID level. A lot of the the stronger ones like Lipo Mall, Poovie, and and whatnot, they are actually doing way, higher than what they’ve done in in the pre COVID level. I sense is looking to buy some of their related assets with. Well, I think is not buying, but I think buying first suite. So yeah.
So the the the this transaction is, I think, is about, 10 to 11 trillions that was announced by the team. The phase five, I think we are targeting slightly more than 500,000,000,000 rupiah. So that will be pretty exciting, and we are we we we we think that the the take up will will based on the the booking that we’ve received to date, I think we should be able to hit that numbers.
Randy, Head of Investor Relations, Lippo Karawaci: I think that’s all from today. We already covered all the questions of Andy. So maybe it marks the end of the presentations today. And then thank you, Pawfendi, for your presentations, and also thank you for the participants attending Lipo Karawachi for for the self twenty twenty five earnings call. We will share the material right after the call.
See you again on our third quarter twenty twenty five earnings call. Have a good day, everyone. Bye bye.
Pav Hendi Santoso, Group CFO, Lippo Karawaci: Alright. Thank you. Thank you.
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