CLSA KIJA Indication of 1H10 result

• 1H10 revenue is expected at Rp344bn, up77% YoY, with 2Q10 revenue up 17% QoQ. 1H10 profit is expected at Rp61bn, up 75% YoY, with 2Q profit up 48% QoQ. 1H10 profit was 69% of our FY expectation. While full result was not released yet, we expect some forex gain booked. In 1Q10, KIJA booked Rp18bn forex gain with net profit at Rp25bn. Power plant revenue for 1H10 was expected at Rp87bn (25% of total revenue)

• Residential revenue booked in 1H10 was Rp62bn, up 149% from Rp25bn in 1H09, albeit from a very low base. Industrial sales increased only 7% for 1H10 compared to 1H09.
Sales of industrial land plots boosted marketing sales. KIJA said there was an industrial land plot sales of 17ha in 2Q10 at of ~Rp650,000 psm. This resulted in a surge in marketing sales by 150% YoY in 1H10 to Rp289bn. We had expected only Rp300bn sales for FY10. The company said 9ha is sold to a foreign electronic company, 2ha to a biscuit company.

Power plant status – still not resolved:
• KIJA said it had obtained all required licenses for the power plant operational. However, whether the divestment will go through or not, it is pending on three things which are in progress (no guidance on how long this will take):
o Full drawdown of loan syndication so project can be completed by Apr2011
o Possible extension of US$35m bridging loan facility (originally due in Apr2010)
o Negotiations with PLN for KSO (long-term joint operations). This will take some time, so current emergency power purchase from PLN will end this month. Whether it can be converted into another interim contract is unknown.

• The closing date of the CSPA is Sep 13, 2010. Condition precedents are: lenders approval and corporate approval (there are 7 lenders in the loan syndication)
Dry Port: KIJA said pilot phase of 10ha to be operation in August. KIJA confirmed some shipping lines to set sites there.