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World Cup expected to boost Kalbe Farma's sales this year
Pharmaceutical giant PT Kalbe Farma (KLBF) says that it is upbeat about business in 2014 as it expects World Cup-related events and the government-backed universal health coverage program to drive up sales
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harmaceutical giant PT Kalbe Farma (KLBF) says that it is upbeat about business in 2014 as it expects World Cup-related events and the government-backed universal health coverage program to drive up sales.
The company's consumer health division will be largely influenced by the world's largest sports event, as people will seek stamina boosters to keep up with the matches, according to Kalbe corporate secretary Vidjongtius.
The consumer health division offers products such as energy drinks Extra Joss and Fatigon Hydro, as well as multivitamin Sakatonik.
'A special event like this [the World Cup] has always been positive for sales of our products,' Vidjongtius said.
Supported by the World Cup hype, Kalbe Farma estimates that the sales of its consumer health products will be 20 to 25 percent higher in 2014 compared to 2013.
Last year, the consumer health division recorded Rp 2.5 trillion (US$216.2 million) in sales, a 16.6 percent increase from a year ago.
Consumer health made up 15.7 percent of Kalbe Farma's total sales, which amounted to Rp 16 trillion.
By setting the minimum growth target at 20 percent, sales of the company's consumer health products are expected to touch Rp 3 trillion in 2014.
Kalbe Farma is therefore now stepping up promotional activities related to the World Cup. The company has been carrying out various World Cup promotions since early this year.
'For example, we hold indoor soccer competitions to promote Extra Joss,' Vidjongtius said, adding that male customers were its top priority.
Besides consumer health, Kalbe Farma's product line also includes prescription drugs and nutritional products.
Its January to March unaudited financial report reveals that sales of prescription drugs became the second-biggest contributor to its total revenue. The biggest contributing sector for Kalbe Farma's business is its distribution and logistics business.
The company booked Rp 4.07 trillion in revenue, rising by 16.5 percent year-on-year. Its net profit increased by 11 percent to Rp 493.1 billion during the first three months of this year.
Kalbe Farma hoped that the universal health coverage program would contribute positively to the publicly listed company's performance after the program was launched early this year, Vidjongtius said.
'Following the [program's] implementation, government institutions accounted for 12 percent of our prescription drugs sales, while they only made up 11 percent by the end of last year,' he added. 'The result was positive in the first quarter.'
For its overall business in 2014, Kalbe Farma has set its growth target at 16 percent.
Meanwhile, the financial report shows that it had Rp 11.62 trillion in total assets at the end of March. The company's liabilities stood at Rp 2.63 trillion and its equities reached Rp 8.99 trillion.
Kalbe Farma's shares ended Thursday's trading at Rp 1,550 apiece. Shares in the company, which had a market capitalization of Rp 72.6 trillion, have gained 24 percent so far this year, outperforming the broader Jakarta Composite Index's (JCI) 13.7 percent increase.
