The Jakarta Post
Consumer goods giant PT Unilever Indonesia booked a slight decrease in its net profit during this year’s first half as the coronavirus pandemic hit demand.
The local arm of Anglo-Dutch company Unilever pocketed Rp 3.62 trillion (US$246.46 million) in net profit during the period, a 2.2 percent decline compared to the corresponding period last year.
Its net sales, meanwhile, climbed 1.4 percent annually to Rp 21.77 trillion while costs increased 0.8 percent year-on-year (yoy) to Rp 10.59 trillion, according to its financial report filed with the Indonesia Stock Exchange (IDX) on Thursday.
The sales growth is in line with an indicative figure provided by the publicly listed company last week.
“The second quarter was a challenging period particularly for the Unilever Foods Solution (UFS) unit, whose consumers are hotel, restaurant and café (Horeca),” the company wrote in a statement on July 24.
The company recorded a 1.6 percent drop in net sales in the second quarter after a 4.58 percent annual increase booked in the first quarter, it said in the statement.
The COVID-19 pandemic has forced customers to stay at home to help curb the coronavirus spread, resulting in drops in visits to hotels, restaurants and cafés.
Indonesian Hotel and Restaurant Association (PHRI) data show that around 2,000 hotels and 8,000 restaurants closed during the first three months of the outbreak in Indonesia, which started in March. As a result, the hotel and restaurant industry lost nearly Rp 70 trillion in revenue as leisure travel came to a complete halt.
“Given the challenging conditions in the second quarter, we still consider this achievement to be in line [with expectations], as we expect the economic condition to get better in the next quarters,” Mirae Asset Sekuritas Indonesia analyst Mimi Halimin wrote in a research note on Unilever’s performance on Thursday.
She expected consumer companies, including Unilever, to record further efficiencies at operating level to support their bottom line in the event the economic situation remained sluggish.
Indonesia’s economic growth cooled to 2.97 percent in the first half, the slowest since 2001, as the expansion of household spending slowed to 2.84 percent from around 5 percent in the last few quarters.
The government expects the economy to contract 0.4 percent at worst or grow 1 percent at best this year as it slowly reopens the economy despite the continued rise of COVID-19 cases.
“As economic activities have gradually resumed since June, we still believe that there will be improvement in the third and fourth quarters,” Mimi said.
The stocks of Unilever, traded at the IDX with the code UNVR, jumped 1.82 percent on Thursday as the main gauge, the Jakarta Composite Index (JCI), gained 0.75 percent. (prm)