Double-Digit Growth Spurs Net Profits to IDR1.3 Trillion
Despite soft consumption, ICBP achieved net profits of IDR1.3 trillion or a 10% y-y increase. The net profits, on an accumulative basis, grew to IDR4.1 trillion or a 15.9% y-y increase. Another to surging net profits, the 3Q19 GMP was maintainable at 35.2% (vs. 34.2% in 2Q19; and 33.0% in 3Q19). Keys to maintainable GMP were the ratio of A&P growth to the 9M19/18 sales was at 4.1% or 4.2% and efficient use of raw materials. However, we view declines in the top line from 12%y-y in 3Q18 to 6%y-y in 3Q19. The slower growth was on grounds of the 2H19 normal sales, the end of Ramadan and Idulfitri in as well as the subsidies allocated for Family Hope Program (PKH) in 1H19. The instant noodle segment posting IDR6.9 trillion worth of revenues of a 7% y-y increase made up the fist largest proportion of ICBP’s total revenues. The second’s largest contributor to ICBP’s total revenues was the dairy segment even though the segment posted a sharp decline of 6% y-y (vs. 16% y-y in 3Q18). But, the dairy segment likely posts the higher growth in 4Q19 as dairy consumption is part of what people perceive as a healthy diet and nutrition for the body. Besides, the snack food segment posted surging revenues of 8% y-y (vs. -8% in 3Q18), while the food seasonings, and the nutrition & special foods respectively contributing less than 5% to the total revenues succeeded to surge by 159% y-y and 17% y-y, respectively. Like the dairy segment, the beverages segment recorded the 3Q19 profit loss of -7% y-y to IDR487 billion on grounds of stiff competition with its peers.


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