Efficiency: A Key to 2Q19 Rising Earnings
The success in keeping efficiency in check was a boost for KLBF’s sound performance in 2Q19. Its revenues edged up to IDR5.3 trillion (+8.3% y-y or + 9.7% q-q). KLBF, on a cumulative basis, posted revenues of IDR11.2 trillion (+7.6% y-y). EBIT and net profits also surged to IDR858 billion (+14.8% y-y) and IDR663 billion (+5.9% y-y). Of note, the skyrocketing numbers were attributable to declines in the 2Q19 promotion costs to IDR466 billion (-3.6% q-q) and the rupiah stable exchange rates for the US dollar. We project that in FY2019 KLBF likely secures earnings of IDR2.6 trillion or an 8.5% increase (vs. KLBF’s guideline of 6%-8%).
Based on sales breakdown, the distribution & logistics segment was the main contributor (31%) to net sales as the segment posted an 11.6% y-y increase to IDR3.4 trillion. Then, the prescription drugs segment was the second’s biggest contributor (24%) to net sales, with a 7% increase to IDR2.6 trillion (+7.7% y-y). Of note, KLBF’s branded generics dominated the market with the total sales of 51%; licensed products of 28%, and unbranded generics of 21%. Besides, the consumer health and nutritional food segments respectively secured a 5% sales increase to IDR1.9 trillion and IDR 3.1 trillion. To keep their body fit during fasting month and Idulfitri exodus, consumers consumed more nutritional food and supplements, and that became a positive catalyst for the selling of KLBF’s health food and beverages.
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