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MAP hopes e-commerce unit will boost revenues
After seeing a drop in its net profit in the first quarter of this year, upmarket retailer Mitra Adiperkasa (MAP) is forecast to see better performance in coming quarters supported by its new focus on e-commerce
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fter seeing a drop in its net profit in the first quarter of this year, upmarket retailer Mitra Adiperkasa (MAP) is forecast to see better performance in coming quarters supported by its new focus on e-commerce.
MAP's net profit slump was caused by the firm's higher operating expenses resulting from the development of new business models, such as e-commerce and the introduction of a new management for customer relations, said Bahana Securities analyst Wendy Chandra.
'We expect its top line growth to receive a boost in 2016 onwards, backed by its new e-commerce and improved inventory management ['¦],' he said in a statement.
The retailer booked a 22.8 percent increase in its net revenues to Rp 2.96 trillion (US$225.6 million) in the first quarter of this year from Rp 2.41 trillion in the same period last year, according to its quarterly financial report recently submitted to the Indonesia Stock Exchange (IDX).
The revenues were, however, squeezed by surging operational expenses, which caused the company's net profit to decline by 73.96 percent to Rp 12.28 billion in the January-March period this year from
Rp 47.16 billion during the same period last year.
'The unfavorable macroeconomic condition also affected our business. Notwithstanding the impact on our bottom line, we remain focused on our strategy to deliver long-term growth,' said MAP corporate secretary Fetty Kwartati.
MAP is in the midst of a transition from being a pure offline retailer to a multichannel player, with its online platform going live in the second half of this year, she went on.
Bahana Securities' Wendy argued that the e-commerce platform, which was named MAPeMall.com, would become the company's growth engine that would help the firm cash in from the growing e-commerce market.
The Communications and Information Ministry has estimated that the country's e-commerce transaction value will hit $24 billion by 2016, twice that of last year's $12 billion.
MAP markets various apparel brands, such as ZARA, Marks & Spencer, Converse and Oakley. As of March this year, the firm operates 1,865 retail outlets in 65 major cities throughout the country.
Once the firm's e-commerce web page is launched, MAP will join the fray with other retailers that have previously introduced their e-commerce sites, including Lippo Group and Trisula International.
Wendy estimated that MAP's long-term growth would also be supported by the firm's plan to refinance its existing debts through a Rp 1.5 trillion-bond issuance midyear.
The bonds will be subscribed by Hong Kong-based private equity firm Sportswear Holdings Pte. Ltd.
Bahana Securities has predicted that by the bond issuance, the firm will pay lower interest rates, which should raise its net margins ahead to more than 3 percent this year compared with 1 percent in 2014.
At the end of March, MAP's total liabilities stood at Rp 6.4 trillion, with total equity standing at Rp 2.5 trillion.
MAP's shares, which are traded under the code MAPI on the bourse, dropped by 1.4 percent to Rp 5,300 apiece on Friday's close from Rp 5,375 per piece in the previous closing.
MAP's net profit slump was caused by the firm's higher operating expenses resulting from the development of new business models, such as e-commerce and the introduction of a new management for customer relations, said Bahana Securities analyst Wendy Chandra.
'We expect its top line growth to receive a boost in 2016 onwards, backed by its new e-commerce and improved inventory management ['¦],' he said in a statement.
The retailer booked a 22.8 percent increase in its net revenues to Rp 2.96 trillion (US$225.6 million) in the first quarter of this year from Rp 2.41 trillion in the same period last year, according to its quarterly financial report recently submitted to the Indonesia Stock Exchange (IDX).
The revenues were, however, squeezed by surging operational expenses, which caused the company's net profit to decline by 73.96 percent to Rp 12.28 billion in the January-March period this year from
Rp 47.16 billion during the same period last year.
'The unfavorable macroeconomic condition also affected our business. Notwithstanding the impact on our bottom line, we remain focused on our strategy to deliver long-term growth,' said MAP corporate secretary Fetty Kwartati.
MAP is in the midst of a transition from being a pure offline retailer to a multichannel player, with its online platform going live in the second half of this year, she went on.
Bahana Securities' Wendy argued that the e-commerce platform, which was named MAPeMall.com, would become the company's growth engine that would help the firm cash in from the growing e-commerce market.
The Communications and Information Ministry has estimated that the country's e-commerce transaction value will hit $24 billion by 2016, twice that of last year's $12 billion.
MAP markets various apparel brands, such as ZARA, Marks & Spencer, Converse and Oakley. As of March this year, the firm operates 1,865 retail outlets in 65 major cities throughout the country.
Once the firm's e-commerce web page is launched, MAP will join the fray with other retailers that have previously introduced their e-commerce sites, including Lippo Group and Trisula International.
Wendy estimated that MAP's long-term growth would also be supported by the firm's plan to refinance its existing debts through a Rp 1.5 trillion-bond issuance midyear.
The bonds will be subscribed by Hong Kong-based private equity firm Sportswear Holdings Pte. Ltd.
Bahana Securities has predicted that by the bond issuance, the firm will pay lower interest rates, which should raise its net margins ahead to more than 3 percent this year compared with 1 percent in 2014.
At the end of March, MAP's total liabilities stood at Rp 6.4 trillion, with total equity standing at Rp 2.5 trillion.
MAP's shares, which are traded under the code MAPI on the bourse, dropped by 1.4 percent to Rp 5,300 apiece on Friday's close from Rp 5,375 per piece in the previous closing.
