SINGAPORE (Nov 12): Sinarmas Land reported $20 million in 2Q18 earnings, down 69.4% lower from a year ago om lower revenue from its Indonesia division, higher finance cost and weakening of the Indonesian Rupiah.

Total revenue for 2Q18 decreased 37.4% to $197.2 million mainly due to lower number of residential units handed over to homebuyers in Indonesia and an absence of sales of land parcels to its joint venture which was seen in 2Q17.

Despite the dip in revenue, the group’s recurring income increased 8.8% to $82.5 million with additional leasing income following the acquisition of 33 Horseferry Road Building in Central London in June 2017 and newly acquired investment properties in Central Jakarta in Indonesia.

In tandem with the lower revenue, 2Q18 gross profit decreased 46.2% to $140.1 million. Due to the absence of land sales and higher cost incurred for the sales of commercial shophouses, 2Q gross profit margin fell 11.7 percentage points to 71%.

In its outlook, Sinarmas says although the Indonesian economy improved better than expected at 5.3% year-on-year in 2Q18, driven by stronger expansion in household consumption, uncertainties still loom amid the on-going trade tensions between the US and China, as well as the normalisation of interest rates.

In addition, the Indonesian Rupiah had depreciated against the dollar over the past year and foreign investors withdrew capital from emerging markets. Bank Indonesia had also hiked rates by 1% since May and with elections looming ahead, the group expects the Indonesian property market to be challenging.

Year to date, shares in Sinarmas are down nearly 37% to 26 cents.