Dairy Farm International Hldgs Ltd Nine Months 2019 Results of PT Hero (7853R)
October 31 2019 - 6:05AM
UK Regulatory
TIDMDFI TIDMJAR TIDMJDS
RNS Number : 7853R
Dairy Farm International Hldgs Ltd
31 October 2019
To: Business Editor 31st October 2019
For immediate release
PT HERO SUPERMARKET TBK
NINE MONTHS 2019 RESULTS
The following announcement was issued today by the Company's
86.3%-owned subsidiary, PT Hero Supermarket Tbk.
For further information, please contact:
Dairy Farm Management Services Limited
Kirsten Molyneux (852) 2299 1884
Sindy Wong (852) 2299 3011
Brunswick Group Limited
David Ashton (852) 3512 5063
South Tangerang, 31(st) October 2019
PT HERO SUPERMARKET TBK
NINE MONTHS 2019 RESULTS
Highlights
-- Net revenue stood at Rp 9,486 billion for the 3(rd) quarter,
down by 3.7% primarily due to the ongoing space optimisation plan
to revitalize the Food business
-- Profit was Rp 93 billion lower than last year as a result of significant IKEA investment
-- Strong double-digit sales growth in Guardian and IKEA
-- Early signs of underlying profitability improvement in our
Food business as transformation initiatives delivers green
shoots
-- Multi-year transformation on track to improve performance in the longer term
Results
(Unaudited)
Nine Months
2019 2018 Change
--------------------
Rp billion Rp billion %
-------------------- ----------- ----------- -------
Net Revenue 9,486 9,849 -3.7
Gross Profit 2,671 2,744 -2.7
Profit/(Loss) (7) 86 n.m
Rp Rp %
----------- -----------
Earnings per share (2) 21 n.m
--------------------- ----------- ----------- -------
PRESIDENT DIRECTOR'S STATEMENT
Overview
For the nine months of 2019, sales were 3.7% lower compared to
the same period last year, as a result of our space optimisation
plan to support the revitalising of our Food business. Our IKEA
Home Furnishing and Guardian Health and Beauty businesses delivered
strong double-digit sales growth.
Financial Performance
Total sales in the first nine months of 2019 was Rp 9,486
billion, 3.7% lower compared to the same period last year following
changes made to optimise space within the Food business. While the
turnaround and store optimisation plan aimed at delivering
enhancements in quality and operating standards is at an early
stage, we are pleased to see the action taken is delivering
results. We have made progress on price competitiveness and
enhancing shopping experiences to better serve our customers. Our
pilot schemes and new format launches are also being well received.
This early stage progress is encouraging and is reflected in
improved underlying profitability in the Food business.
Guardian achieved strong sales and profit growth over the
reporting period. Guardian continues to maintain a strong market
price position as well as landing a series of successful store
remodels, with greater emphasis on Beauty categories and the
addition of local Halal certified ranges.
IKEA's sales growth remains strong in the third quarter, with
revenue further enhanced by a growing contribution from e-commerce
which is underpinned by continuous commitment to offer affordable
home furnishing products and services. However, IKEA's
profitability impacted the overall Hero Group result due to
investment costs for new stores under development and higher cost
of goods sold.
Business Activities
PT Hero remains committed to its multi-year transformation plan
to reshape and revitalise our customer offers to ensure quality and
value, as well as improve the productivity of our stores for the
benefits of our customers and our team members.
As we rebalance our Food store portfolio, we will continue to
invest in opening and redeveloping stores, leading to a stronger,
more sustainable business going forward. We have launched pilot
propositions in which we are redefining space and trialing a range
of innovations in our formats. We are putting greater emphasis on
fresh food, range optimisation and, where relevant, even
repurposing the space altogether. While it remains early days for
our store renewals, the initial customer response has been
encouraging.
Our Health and Beauty business continue to show strong growth
momentum. Guardian continues to refine its offer to reflect
customer demand, delivering good results. The total number of
Health and Beauty stores in Indonesia now stands at 289 stores.
We see significant opportunity in our IKEA business and we are
seeking to invest significantly to grow the store network, as well
as online sales. E-commerce experienced more than double digit
growth during the 9 months of the year, as customers responded
positively to our web offer. The conversion of a Giant hypermarket
to an IKEA store in Sentul is slated to open late 2019. This store
conversion is a good example of the breadth of our strategic
thinking when it comes to taking a holistic view of the retail
space optimization plan. Good progress has been made with other
ongoing projects in Jakarta Garden City and Bandung which are
planned to open at the end of 2020. Our strategic plan to meet the
demands of the growing middle-income consumer involves opening both
traditional and new IKEA formats. As an example, our pick-up point
format in Bandung was opened in September 2019, a year ahead of the
official store opening.
Prospects
PT Hero remains firmly focused on its multi-year strategic
transformation and is confident that the actions currently underway
will lead to longer-term sustainable improvements. Our
transformation will take time and is at an early stage, but we are
encouraged by progress made. We continue to invest and grow our
capabilities in Indonesia and will invest more than Rp 500 billion
across the Hero Group this year to create better, more relevant
retail spaces, improved product offers in each of our store
formats, as well as improving operating standards for our
customers, and creating greater opportunities for our Team members.
We remain firmly committed to be a strong competitive retailer in
each of our retail sectors and to growing our business over the
long term in Indonesia.
Patrik Lindvall
President Director
31(st) October 2019
- end -
For further information contact:
Patrik Lindvall, President Director
PT Hero Supermarket Tbk
Tel: +62-21-8378 8388
E-mail: extcomm@hero.co.id
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END
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