Other Publications
Matahari profit up 19.8 percent in H1, new stores planned
The Jakarta post , Jakarta | Tue, 08/05/2008 10:15 AM | Business
Publicly listed PT Matahari Putra Prima, one of the country's major retailers, recorded a surge in net profit during the first semester of the year on the back of stronger sales.
The company's profit surged 19.8 percent to Rp 60 billion (US$6.66 million) in the period ended June 30 from Rp 50 billion a year earlier.
Matahari, which largely targets middle to upper-income consumers, said in a statement recently the growth was spurred by strong sales from its two core businesses; its department and food stores.
Sales grew 24.6 percent to Rp 5.2 trillion, of which 50 percent came from its food division and 44 percent from its department store division.
"We are proud to be able to drive Matahari to reach its encouraging sales achievement in this tough, challenging retail environment for the period," Matahari president director Benjamin Mailool said in a statement.
Soaring prices of key commodities, coupled with the government's decision to raise fuel prices in May, have left consumption-based companies struggling to balance rising production costs with moderate sales prices so as not to erase profit.
Matahari experienced a 27.6 percent surge in operating expenses to Rp 1.2 trillion in the January to June period.
However, Matahari remains upbeat on sales estimates and plans to open eight new department stores and 10 to 12 hypermarkets.
The company currently has 80 department stores, 39 hypermarkets and 29 supermarkets in the country.
Other retailers, including Mitra Adiperkasa, Ramayana and Hero Supermarket also booked hefty profits in the period despite concerns that rising inflation has decreased public spending power.
The companies managed to post an average 52.3 percent rise in profits during the first semester of the year.
Mitra Adiperkasa and Hero Supermarket mostly target middle to upper-income consumers, while Ramayana targets middle to low-income consumers.
Bank Indonesia forecasts inflation may peak in two months following a spiraling increase in food and fuel prices.
The Central Statistic Agency reported last week the country's inflation rate had hit 11.9 percent from a year earlier, a 22-month high, putting pressure on the central bank to raise interest rates.
Higher interest rates will discourage companies from seeking financing and will undermine public spending power as mortgages and credit card loans take a larger toll.
