TIDMDFI TIDMJAR TIDMJDS
RNS Number : 5408D
Dairy Farm International Hldgs Ltd
27 April 2017
To: Business Editor 27th April 2017
For immediate
release
PT HERO SUPERMARKET TBK
FIRST QUARTER 2017 RESULTS
The following announcement was issued today by the Company's
84.4%-owned subsidiary, PT Hero Supermarket Tbk.
For further information, please contact:
Dairy Farm Management Services
Limited
Neil Galloway (852) 2299 1896
Brunswick Group Limited
Siobhan Xiaohui Zheng (852) 3512 5044
South Tangerang, 27(th) April 2017
PT HERO SUPERMARKET TBK
FIRST QUARTER 2017 RESULTS
Highlights
-- Net revenue down 8%
-- Gross profit up 2%
-- Net loss of Rp 6 billion
-- Store rationalization nearing completion
"In response to a challenging trading environment for the Food
business during the first quarter, the Company has repositioned its
Food promotion strategies to focus on everyday value for consumers,
while at the same time reducing costs and enhancing product
availability. The Non-Food business continued to trade well."
Stephane Deutsch
President Director
Results
(Unaudited)
First Quarter
2017 2016 Change
Rp billion Rp billion %
--------------------- ------------------------------------------------------- ----------- -------
Net Revenue 3,109 3,368* -8
Gross Profit 825 806* +2
Operating Loss (10) (35)* n.m.
Loss for the period (6) (35) n.m.
---------------------- ------------------------------------------------------- ----------- -------
Rp Rp %
--------------------- ------------------------------------------------------- ----------- -------
Loss per share (1) (8) n.m.
*Excluding Starmart operations
n.m. = not meaningful
PRESIDENT DIRECTOR'S STATEMENT
Overview
The Indonesian economy in the first quarter of 2017 experienced
soft consumer spending, as evidenced by a significant drop in
household consumption as a proportion of income, while inflation
continued to weaken. The Group's Food business recorded lower sales
compared to the same period last year, while Non-Food maintained
its positive sales growth albeit at a reduced rate.
In response to the decline in Food sales, PT Hero is taking
steps to revive growth through a revised promotion strategy,
focused on everyday value for consumers, and enhanced product
availability in stores. At the same time, efforts to manage store
expenses have been successful in helping to maintain margins during
the challenging trading environment.
Financial Performance
Total sales in the first quarter of 2017 were 8% lower at Rp
3,109 billion and the Company recorded a net loss of Rp 6 billion.
Nevertheless, this was an improvement from the net loss of Rp 35
billion in the comparable period in 2016, due to margin improvement
and cost savings across all banners.
The Food business recorded a 10% reduction in sales to Rp 2,625
billion due to store closures and negative like-for-like sales,
especially in the supermarket formats. This led to an operating
loss of Rp 56 billion, excluding unallocated corporate expenses,
which was 6% lower than last year despite the improvement in
margin.
Non-Food businesses recorded a 6% increase in sales to Rp 484
billion, with both Guardian and IKEA showing growth. Excluding
unallocated corporate expenses, operating income rose 219% to Rp 95
billion.
As at 31(st) March 2017, the Company had net cash of Rp 81
billion, compared to Rp 183 billion at the end of 2016. The
reduction was mainly due to capital expenditure for new stores.
Business Activities
To counter the challenging trading environment for the Food
business, new promotion strategies are underway that respond to the
changing trends, while improved supply chain utilization with
increased centralization through the Group's distribution centres
is ensuring better product availability.
Despite the store closures programme previously announced, in
March 2017 the Company opened one Giant Ekstra in Manado. In Hero,
a newly introduced premium supermarket concept in Pondok Indah Mall
is showing encouraging results.
In Guardian, the store rationalization programme is near
completion. Like-for-like sales growth was encouraging during the
period which, together with the management of store operating
expenses, led to improved profitability. A focus on improving the
pharmacy offer is expected to be an additional growth driver in
Guardian over the longer term.
In IKEA, there was further sales and profit growth from the Alam
Sutera store. The IKEA online sales coverage was expanded to
Bandung and an e-commerce distribution point has been established
at Sentul.
At 31(st) March 2017, the Company operated 444 stores (31(st)
December 2016 - 448 stores), comprising 56 Giant Ekstra
hypermarkets, 143 Giant Ekspres and Hero Supermarkets, 244 Guardian
Health and Beauty stores and one IKEA store.
Prospects
In response to a challenging trading environment for the Food
business during the first quarter, the Company has repositioned its
Food promotion strategies to focus on everyday value for consumers,
while at the same time reducing costs and enhancing product
availability. The Non-Food business continued to trade well.
Stephane Deutsch
President Director
27(th) April 2017
- end -
For further information contact:
Stephane Deutsch, President Director
PT Hero Supermarket Tbk
Tel: +62-21-8378 8388, Fax: +62-21-831 7764
This information is provided by RNS
The company news service from the London Stock Exchange
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