Unilever Indonesia Leads Consumer Goods Boom
Indonesia’s consumer-focused companies posted increases in earnings in the first half of this year amid strong domestic consumption.
Unilever Indonesia, the biggest producer of consumer products, said on Monday that its net income rose to Rp 2.33 trillion ($247 million) in the first half this year, up 13 percent from the same period last year.
Revenue grew 17 percent to Rp 11.36 trillion in the first half this year, the company said in a filing to the Indonesia Stock Exchange (IDX).
The company sells 27 brands of home and personal care products — which constituted 73 percent of sales in 2011 — and 16 brands of food and beverages, contributing the remainder of sales.
Kim Eng Securities in Jakarta said the weakening of the rupiah against the US dollar put pressure in the company’s gross margin. “Weak rupiah has caused the sharp increase in cost of good[s] sold,” Kim Eng said in a note to clients.
Cost of goods sold rose by 19 percent, putting Unilever’s gross margin at 50.5 percent in the first half, lower than 51.5 percent in the same period last year, Kim Eng said. Indonesia’s rupiah weakened 4.5 percent in the first six months of the year against the dollar.
Still, the brokerage house said that Unilever’s earnings matched expectations. Kim Eng maintained its target price for Unilever shares at Rp 26,350 with a “hold” recommendation.
Meanwhile, supermarket operator Supra Boga Lestari reported that its net income increased 21 percent to Rp 19.26 billion in the January-June period this year compared to a year earlier.
Revenue at Supra Boga rose 18 percent to Rp 506 billion. The company aims to increase revenue to “slightly above” Rp 1 trillion by the end of the year, from about Rp 900 billion last year.
The company operates Farmer’s Market and Ranch Market stores, which cater to middle and upper income customers in Indonesia. The company, which had a Rp 160 billion initial public offering in June, plans to double its number of outlets by 2014 from 14 stores now.
Trikomsel Oke, the nation’s largest mobile phone retailer, also reported an increase in net income in the first half of this year. Net income at Trikomsel rose 24 percent to Rp 150 billion in the first six-months. Revenue rose 6 percent to Rp 3.65 trillion.
Shares in Unilever closed unchanged at Rp 24,100 on Monday while shares in Supra Boga rose 1.3 percent to Rp 780 and shares in Trikomsel also closed unchanged at Rp 910 on the IDX Monday. Shares in companies in the consumer goods sector rose 0.3 percent in the local market.