TIDMDFI TIDMJAR TIDMJDS
RNS Number : 2818M
Dairy Farm International Hldgs Ltd
27 July 2017
To: Business Editor 27th July 2017
For immediate
release
PT HERO SUPERMARKET TBK
FIRST HALF 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
Kevin Hartnett (852) 3512 5072
South Tangerang, 27th July 2017
PT HERO SUPERMARKET TBK
FIRST HALF 2017 RESULTS
Highlights
-- Net revenue down 4%
-- Gross profit up 3%
-- Net income of Rp 71 billion
"PT Hero achieved modest growth in gross profit for the first
half of 2017 after the results benefited from stronger sales in the
second quarter. While the trading environment remains challenging
for the Food business, there continues to be good growth in both
the Health & Beauty and IKEA businesses."
Stephane Deutsch
President Director
Results
(Unaudited)
First Half
2017 2016 Change
Rp billion Rp billion %
------------------- ----------------------- ------------- ------------- -------
Net Revenue* 6,923 7,201 -4
Gross Profit* 1,793 1,747 +3
Operating Profit* 86 27 100+
Profit/(Loss)
for the period - Continuing* 71 27 100+
- Discontinued** - (7) n.m.
- Total 71 20 100+
------------------------------------------- ------------- ------------- -------
Rp Rp %
------------------- ----------------------- ------------- ------------- -------
Profit/(Loss)
per share - Continuing* 17 6 100+
- Discontinued** - (1) n.m.
- Total 17 5 100+
* Excluding Starmart operations
** Starmart operations
n.m. = not meaningful
PRESIDENT DIRECTOR'S STATEMENT
Overview
The Company saw an improved sales performance during the second
quarter of 2017 as retailers benefited from the Eid Mubarak festive
period, partly compensating for the weak first quarter. The Company
recorded improved profitability, despite the decrease of sales,
principally driven by the non-Food businesses. The trading
environment remains challenging for the Food business as evidenced
by weak overall modern trade sales growth and a continuing negative
sales trend in supermarket and hypermarket formats.
Significant attention is focused on improving sales in the Food
business through the continuous review of promotional strategies in
each store format, focus on everyday value for consumers, and
further centralizing the distribution system. Meanwhile,
operational cost management is being strengthened.
Financial Performance
Total sales in the first half of 2017 were 4% lower at Rp 6,923
billion. The Company recorded net income of Rp 71 billion, up from
Rp 20 billion in the first half of 2016. Operating profits
benefited from a modest increase in gross profit as well as
successful cost efficiency improvements.
Sales in the Food business declined by 6% to Rp 5,879 billion
due to negative like-for-like sales, principally resulting from a
weaker performance from the Giant Ekspres supermarkets business.
This was partially offset by increased sales in the non-Food
businesses, which grew 12% to Rp 1,045 billion. Both Guardian and
IKEA produced strong like-for-like sales growth, which supported a
significant improvement in profitability.
As at 30th June 2017, the Company's net cash had increased to Rp
585 billion, from Rp 183 billion at the end of 2016, due to the
timing of the Eid Mubarak period and improvements in stock
management.
Business Activities
In the Food business, the Company rolled-out an everyday low
price initiative to provide better value to customers which has
started to deliver an improvement in sales. Further initiatives to
increase sales are continuing through the regular review of
promotions, a more distinctive pricing strategy between formats,
and increased centralization of the distribution system to improve
product availability.
The Company opened two Giant Ekstra hypermarkets during the
first half of 2017, in Manado and Malang. One Hero Supermarket was
opened in Bandung. The premium Hero concept recently introduced in
Pondok Indah has been producing encouraging results. It will be
gradually deployed in all Hero Supermarket stores.
In Guardian, the strong like-for-like sales growth continued,
supported by improved store traffic especially during the Eid
Mubarak festive period. New initiatives in digital marketing have
received a good response, and there will be continued focus on
customer-centric initiatives. Greater emphasis on the Beauty
category contributed significantly to the sales growth. The first
airport store was opened in Bali, and the market response has been
encouraging.
In IKEA, there was further sales and profit growth from the Alam
Sutera store. There was a good market response to weekly special
offers, and the online activities continued to grow. IKEA started
its Lebaran Sale on 15th June 2017, which produced an increase in
store traffic during the festive period.
At 30th June 2017, the Company operated 447 stores, little
changed from the prior year end, comprising 56 Giant Ekstra
hypermarkets, 141 Giant Ekspres and Hero Supermarkets, 249 Guardian
Health and Beauty stores and one IKEA store.
Prospects
PT Hero achieved modest growth in gross profit for the first
half of 2017 after the results benefited from stronger sales in the
second quarter. While the trading environment remains challenging
for the Food business, there continues to be good growth in both
the Health & Beauty and IKEA businesses.
Stephane Deutsch
President Director
27th July 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
END
IR RRMLTMBBTMJR
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