Positive Top Line vs Negative Bottom Line
MAIN posted the net loss amounting to IDR24 billion in 3Q17 compared to the net profit amounting to IDR65 billion in 3Q16. The major cause to MAIN’s mediocre performance was the upbeat sales raw material expense leading to the downward gross margin from 19% in 3Q16 into 9% in 3Q17.

Feeds Division Constrained by Upbeat Raw Material
The feeds division contributing 66% to the total sales suffered from the downbeat EBIT margin from 13% in 3Q16 into 7% in 3Q17. This backdrop was triggered by the escalating price of local corn compared to the price of imported corn.

However, we oversee that the price of local corn edged down 9% in December 2017 compared to its price in November 2017. The price of local corn stable at IDR3,700/kg will end the pressure on EBIT margin in 2018.


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