BSDE - 9M22 earnings drops caused by forex loss

Bumi Serpong Damai (BSDE) 9M22 net profit inched down by 1.3%yoy and arrives below market and above KBVS’s expectations (67%/87%). On quarterly basis, the growth was soared by 292.8%qoq and 81.3%yoy. The cumulative net profit drop was mainly driven by loss on foreign exchange at IDR349.5bn or higher compared to only IDR11.56bn in 9M21. Without this forex loss, BSDE core profit growth was solid at 34.5%yoy. Sales from land and buildings (strata title) remain as the main driver which saw 34.6%oy growth, while recurring revenue which contributes around 13.3% reported 29.1%yoy growth in the same period. (Source: Company) Comment: Policy rate hike which will follow by higher mortgage rate by nature is become our major concern. BSDE housing price tag that mostly came within the range for middle income segment could potentially see a softer demand both from end users and property investors. We expect another VAT relaxation and solid backlog sales and stable recurring income could become as a soft cushion for BSDE earnings next year.