- Constant-currency profits down 34%
- Indonesia accounts for 70% of sales
Petra Foods, the Singapore-based confectioner, has pointed to the slowdown in Indonesia, its largest market, after profits fell in the first half of the year.
The company saw its net profit for the six months to 30 June tumble 41.4% to US$15.2m. The weakening of Indonesia's currency, the rupiah, against the US dollar – Petra's reporting currency – had some impact, pushing up raw material costs.
However, on a constant-currency basis, net profit fell 34.4%. On the same basis, EBITDA was down 27.2%.
Revenue slid 6% to US$221.3m, with a 3% fall in the second quarter. "With a slowing economy and fears of further contraction, Indonesian consumers have become more cautious with their spending and this has affected demand across most categories of consumer goods including chocolate confectionery. Our trade partners have reduced their inventory in response to the slower consumption and this had a negative effect on our sales," CEO John Chueng said.
However, he added: "Having said that, we have been monitoring product movement in Indonesia very closely and based on shelf space data, we noted that consumer demand for our major brands remains positive."
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Last month, after the quarter ended, Petra Foods implemented "pricing adjustments and product rightsizing" on some products in Indonesia to try to mitigate the high input costs.
