Conglomerate Conglomerate Grandson Riady's Openings About Lippo Group's Business Performance Growth: Matahari Dept Store Rises, To Increase Share Ownership In Siloam

John Riady. (Photo: Doc. Antara)

JAKARTA - Lippo Group has succeeded in achieving positive performance, starting from making profits to disbursing dividends for the 2021 period as a result of the business transformation initiated since 2019 in an effort to increase company value.

Executive Director of Lippo Group and CEO of LPKR John Riady, who is also President Commissioner of PT Siloam Hospitals, as well as commissioner of PT Matahari Department Store, said that Lippo Group's business transformation is by implementing portfolio management, capital structure or capital recycling.

"The goal is not only to strengthen the performance of business entities, but also to increase value and have a positive effect on the group as a whole," said the grandson of conglomerate Mochtar Riady in a written statement, Monday, April 25.

Based on the principle of operational excellence, management is determined to continue the transformation program in the coming years in order to further increase the company's value and achieve sustainable growth.

"This portfolio management strategy contributes to generating profits and maintaining the long-term performance of the corporation. This move will continue in the first quarter of this year," he said.

Throughout 2021, the Lippo Group entity, PT Matahari Department Store, bought back almost 9 percent of the shares through the buyback program, the value of which was almost Rp600 billion. Lippo Group also restructured its ownership in PT Matahari Putra Prima Tbk (MPPA), the owner of the Hypermart chain of outlets following the arrival of Consilium Frontier Equity Fund LP from the United States who bought MPPA shares, so Consilum's ownership is around 7.35 percent.

Entering April, the Lippo Group also released its shares in PT Lippo General Insurance Tbk (LPGI). Instead, Hanwha Life from South Korea became the new strategic partner. Both have signed a conditional share purchase agreement.

Previously, Lippo Group also released PT Link Net Tbk (LINK) shares to PT XL Axiata Tbk and Axiata Group worth IDR 8.72 trillion. This corporate action is part of the company's consolidation and transformation strategy, fresh funds for other future investments.

On the other hand, Lippo Group has increased its ownership in PT Siloam International Hospitals Tbk (SILO). LPKR increased its ownership through the purchase of 330 million shares, so that ownership increased from 55.4 percent to 57.9 percent.

And of course, throughout 2021, Lippo through PT Multipolar and Venturra Capital will continue its digital investment strategy and invest in more than 12 start-up companies in Indonesia and Southeast Asia, especially Vietnam.

John Riady explained that so far he has implemented two fundamental strategies, in terms of operations and portfolios. So that they are able to get through the pandemic period, and Lippo Group's performance is actually getting stronger and better.

"Almost all of our issuers' performance has been good, only the companies most affected by the pandemic, such as Matahari Department Store, are still doing very well. And we are also distributing dividends," he said.

He added that the capital structure plans have paved the way for entities to obtain funds for expansion and Lippo also continues to open up opportunities for collaboration and cooperation to strengthen the entity.

The addition of Lippo Group's capital to SILO can also be seen as part of a very mature portfolio strategy. Currently, many conglomerates have followed in the footsteps of Lippo Group in penetrating the healthcare sector.

Moreover, SILO's performance has proven that the health care sector is a key factor in the economy going forward.

"The health sector together with the property sector will become the backbone of future economic growth, becoming more important than the period before the pandemic. Of course, apart from the digital sector," John explained.