ELTY : Weak 1Q11 results - net profit fell by half yoy - Deutsche Bank

Net profit fell by half yoy
1Q11 Net profit fell by 78% qoq (-45% yoy) to Rp15bn. Bakrieland reported 1Q11 revenue of Rp425bn, down 9% qoq (but doubled yoy), achieving 31% of our FY11F. Gross margin also declined slightly by 2% qoq to 46%. EBIT declined by 13% qoq (+148% yoy) to Rp83bn, achieved 32% of our estimate. Please refer to table for summary.

Toll road: still losing money
In 1Q11, toll road contributed 7% to revenue but booked an operating loss of Rp8bn (vs. Rp5bn of operating profit in 1Q10). However, Kanci-Pejagan toll has seen pick in its average daily traffic to about 15,000, but still below company's target of 18,000. We expect this to gradually pick-up as the toll road is only in its second year of operation.

We maintain our Hold rating on the stock given the lack of contingency plan on its developments. Condo pre-sales for Epicentrum has remained weak, both The Wave and Grove, only sold less than 50% since launching in 2007. Pre sales overall continued to underperform versus its peers. In 2H11, ELTY expects to launch 5ha in Jonggol with average land selling price of Rp2mn per sqm. We believe demand would be lukewarm given the lack of infrastructure and proximity to Jakarta.