• Operating profit falls 18.1%
  • Net profit up 1.2%
  • Net sales grow 9.3%
Indofood said gross margin fell in the period

Indofood said gross margin fell in the period

Indonesian noodle maker Indofood CBP Sukses Makmur saw its operating earnings fall in the first half of the year, hurt by "challenges" in the agribusiness sector.

Operating profit in the six months to the end of June fell 18.1% to RP2.93trn (US$), the company reported yesterday (27 August). Operating margin declined to 10.9% from 14.5% on lower gross profit and higher operating expenses.

Indofood said gross margin, which fell to 24% from 27.4%, was due to a lower agribusiness performance.

Net income, however, grew 1.2% to RP1.70trn, while net sales were up 9.3% to RP26.86trn.

"The market condition in agribusiness sector continues to be challenging and will remain subdued in the short term, adversely impacting our agribusiness performance," said president and CEO Anthoni Salim. "We remain positive on Indonesia's future potential and will continue to focus on sustaining growth cautiously, in light of the recent development in the domestic macro economic condition."

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  • Consolidated net sales grew 9.3% to Rp26.86 trillion
  • Income from operations declined 18.1% to Rp2.93 trillion
  • Income for the period attributable to equity holders of the parent entity grew 1.2% to Rp1.70 trillion
  • Earnings per share (“EPS”) increased to Rp194

Jakarta, 26 August 2013 – PT Indofood Sukses Makmur Tbk (“Indofood” or the “Company”) today announced its financial results for the first semester ended 30 June 2013, reporting consolidated net sales of Rp26.86 trillion, grew 9.3% compared to Rp24.58 trillion in the same semester last year. Indofood’s Strategic Business Group (“Group”) of Consumer Branded Products (“CBP”) Group contributing around 45%, while Bogasari, Agribusiness and Distribution contributing 27%, 21% and 8% respectively to the consolidated net sales. 

The CBP Group, which mainly consists of Noodles, Dairy, Snack Foods, Food Seasonings and Nutrition & Special Foods Division recorded a 12.2% increase in total sales value primarily driven by volume growth in all main divisions within the Group. Bogasari Group grew 17.8% in total sales value on higher average selling price and flour volume. Agribusiness Group posted 7.4% decline in total sales value, as lower average selling prices of palm products and rubber as well as lower sales of edible oil products more than offset higher CPO sales volume. Distribution Group registered a total sales value growth of 15.5%, primarily due to higher sales of CBP Group.

Gross profit for the period declined 4.0% to Rp6.46 trillion from Rp6.72 trillion in the same period last year and gross margin decreased to 24.0% from 27.4% mainly due to lower Agribusiness performance. Income from operations decreased 18.1% to Rp2.93 trillion from Rp3.57 trillion, while operating margin decline to 10.9% from 14.5% on lower gross profit and higher operating expenses. Including profit contribution from China Minzhong Food Corporation Limited, income for the period attributable to equity holders of the parent entity grew 1.2% to Rp1.70 trillion from Rp1.68 trillion; net margin declined to 6.3% from 6.9%. Core profit increased 5.8% to Rp1.77 trillion from Rp1.68 trillion on the same period last year. 

Anthoni Salim, the President Director and Chief Executive Officer of Indofood, said: "The market condition in agribusiness sector continues to be challenging and will remain subdued in the short term, adversely impacting our Agribusiness performance. We remain positive on Indonesia’s future potential and will continue to focus on sustaining growth cautiously, in light of the recent development in the domestic macro economic condition.” 

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About PT Indofood Sukses Makmur Tbk

PT Indofood Sukses Makmur Tbk (“Indofood”) (IDX : INDF) is a leading Total Food Solutions company with operations in all stages of food manufacturing from the production of raw materials and their processing through to consumer products on the market. 

Indofood operates four complementary Strategic Business Groups (“Group”), namely:
  • Consumer Branded Products, its business activities are conducted by PT Indofood CBP Sukses Makmur Tbk (“ICBP”), which was listed on Indonesia Stock Exchange (“IDX”) since 7 October 2010. ICBP is one of the leading packaged food producers in Indonesia, with a wide range of packaged food products. ICBP brands are among the strongest brands with the most significant mindshare in Indonesia for consumer food brands.
  • Bogasari, primarily a producer of wheat flour as well as pasta. Its business operations are supported by shipping and packaging units.
  • Agribusiness. The Group is led by Indofood Agri Resources Ltd. (“IndoAgri”), listed on the Singapore Stock Exchange. Both of IndoAgri’s two operating subsidiaries PT Salim Ivomas Pratama Tbk and     PT PP London Sumatra Indonesia Tbk are listed on the IDX. The Group’s business principal activities range from research and development, seed breeding, oil palm cultivation and milling; as well as the production and marketing of branded cooking oils, margarine and shortening. In addition, the Group is also involved in the cultivation and processing of rubber, sugar cane as well as other crops.
  • Distribution, which boasts the most extensive distribution network in Indonesia. It distributes the majority of Indofood’s and its subsidiaries’ consumer products as well as third-party products.

Original source: Indofood