Indofood Records Slow Pace Growth In 9 Months Period

JAKARTA (TheInsiderStories) – Publicly-listed consumer goods giant PT Indofood Sukses Makmur Tbk (IDX:INDF) posted slowing growth of net profit in the nine months to September of this year.

Indofood reported net profit of Rp3.28 trillion up to 3Q17, growing just 1.2 per cent from the same period in 2016, at Rp3.24 trillion. This was in fact far lower than the growth for the nine months to September of last year, which recorded a net profit increase of 92.5 per cent from the same period the previous year.

Anthony Salim, President Director and Chief Executive Officer of Indofood, concluded market conditions have not improved significantly in the third quarter. Market demand across key fast moving consumer goods (FMCG) categories was still growing, but at a moderate pace, while the competitive environment is more challenging.

“We are pleased that we are able to deliver top and bottom line growth, as we continue to expand and deepen our distribution penetration as well as managing our costs prudently,” said Salim.

The slow pace of net profit growth was in line with moderate growth in net sales, by 6.5 per cent to Rp53.12 trillion from Rp49.87 trillion in the same period last year, while income from operations increased 4.8 per cent, to Rp4.16 trillion from Rp3.97 trillion, and operating margin increased slightly, to 15.2 per cent from 15.0 per cent.

Income attributable to equity holders of the parent entity grew by 7.4 per cent to Rp3.04 trillion, from Rp2.83 trillion for the same period last year; net margin improved to 11.1 per cent from 10.7 per cent. In addition, core profit increased by 4.0 per cent, to Rp3.04 trillion from Rp2.92 trillion.

The company’s net margin declined to 6.2 per cent from 6.5 per cent, mainly due to the absence of income for a period of suspended operations and higher non-controlling interests in relation to better Agribusiness yields.

In agribusiness, Indofood saw its sales fall by 2 per cent. It operates several plantation companies in palm oil, sugarcane and rubber, with two publicly-listed firms: Salim Ivomas Pratama (SIMP) and Perusahaan Perkebunan London Sumatera Indonesia (IDX:LSIP).

The publicly listed ICBP, which is Indofood’s subsidiary in consumer-branded products, saw its sales grow 3.6 per cent in consolidated net sales, to Rp27.43 trillion from Rp26.47 trillion for the same period last year.

ICBP enjoyed higher volume growth in nearly all its business lines, such as instant noodles, dairy, snacks, food seasonings, and nutrition and special foods. Beverages was the only business to post a slight sales decline.

By Elisa Valenta, elisa.valenta@theinsiderstories.com