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Matahari’s profit drops 30% amid operating cost hike
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Shopping carts of Indonesian retail company Matahari are pictured in this undated photo. (www.shutterstock.com/-)
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ublicly listed department store chain Matahari saw its net profit in the first quarter slide 30 percent year-on-year (yoy) to Rp 101 billion, amid a rise in operating costs.
Normalized rental prices for mall tenants and a higher minimum wage had contributed to the cost hike, Matahari said.
According to the company’s financial report, its operating expenses rose 15.8 percent yoy to Rp 776.4 billion in the first quarter.
That growth in expenses surpassed the company’s 12.1 percent yoy rise in net revenue in the first quarter, with a gross figure of Rp 1.44 trillion.
The company’s chief financial officer, Niraj Jain, said in an earnings call on Tuesday that Greater Jakarta and Bali had been its best performing markets in the period, while Sulawesi and Kalimantan had the lowest growth after experiencing a quick recovery in demand last year.
Despite the first-quarter cost challenges, the retail chain is targeting double-digit sales growth and stable gross margins at the current level.
“We’ve targeted Rp 2.3 trillion for [earnings before interest, taxes, depreciation and amortization] EBITDA, but we will monitor the progress in the second quarter of this year,” Matahari CEO Terry O’Connor said at the same earnings call.
