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Martina Berto targets $39m in sales amid low demand
Martina Berto's sales fell 38.2 percent year-on-year (yoy) to Rp 87.06 billion in the first quarter of this year because of a pandemic-induced decline in consumption.
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ublicly listed cosmetics firm PT Martina Berto is targeting Rp 564 billion (US$39.09 million) in sales this year, 4.92 percent higher than last year’s figure, despite slumping demand for cosmetics.
President director Bryan David Emil said on Monday that the company was optimistic it would achieve the target as it would focus on producing skin care, personal care, herbal and hygiene-related products this year to offset the low demand for makeup.
“We won’t be focusing on makeup products because people’s faces will be covered by masks,” he said during a virtual public showcase. “That’s why we’ll focus on producing hygiene products, soaps, shampoos and hand sanitizers instead this year.”
The company, part of cosmetics giant Martha Tilaar Group, has shifted its business focus to healthcare goods since the height of the pandemic by producing in-demand products such as hand sanitizers, hand gel, disinfectant and bottled herbal drinks.
The company's sales fell 38.2 percent year-on-year (yoy) to Rp 87.06 billion in the first quarter of this year because of a pandemic-induced decline in consumption. Cosmetics sales, which previously made up more than 82 percent of Martina Berto’s total sales, fell by almost 35 percent yoy during the period.
“We hope the easing PSBB [large-scale social restrictions] policy will boost people’s consumption by December,” Bryan said.
To achieve its sales target, the company plans to launch a new herbal product, among others, in the second half of this year. However, Bryan declined to go into detail as the products were still under development.
Martina Berto vice chairwoman Wulan Tilaar said on June 4 that the company had seen a 50 percent increase in revenue from its red ginger product, an ingredient commonly found in jamu (traditional herbal medicine), during the pandemic.
Bryan thought the company’s shift to health care and hygiene would help it overcome its losses from earlier this year.
The company, which sells the Sari Ayu and PAC cosmetics brands, recorded a loss of Rp 24.24 billion in the first three months of this year.
The production shift is part of Martina Berto’s so-called “survival program”, as the company has been forced to temporarily close its outlets and spas because of social distancing measures.
As part of the program, Bryan said, the company would conserve its cash by increasing efficiency.
“We’ve conducted the efforts by adjusting raw material purchases for production and laying off contract workers so we can conserve cash during this time,” he said.
The company has restructured its loans and delayed interest and debt payments to suppliers. It has also adjusted this year’s capital expenditure (capex) for the current situation, he said, without going into detail about the figure.
Martina Berto’s shares, traded on the Indonesia Stock Exchange (IDX) under the stock symbol MBTO, closed at Rp 68 per share on Tuesday, unchanged from its previous close, as the Jakarta Composite Index (JCI) declined by 0.04 percent.
Martina Berto stock has lost 27.66 percent of its value since the beginning of the year.
