Sales of Unilever Indonesia Tbk (UNVR) in the first half of 2017 only grew 2.5 percent to IDR 21.26 trillion, which is slower than the first half of 2016 of 10.32 percent.
Andy Ferdinand, an analyst at Samuel Sekuritas Indonesia, said that retail data and the performance of listed companies in the consumption sector are still relatively weak. “A number of issuers recorded a decline in sales volume, an increase in the average selling price to help their earnings performance,” said Andy.
The same thing happened to UNVR. The company’s revenue from the food and refreshment (F&R) division rose 5.9 percent yoy, as well as home and personal care (HPC) division by 0.9 percent. “The F&R division is growing faster than HPC and currently contributes 33 percent of total revenue, increasing from 31 percent in 2016,” said Andy.
UNVR is estimated to increase efficiency to support profit before tax (PBT). In the first half of 2017, PBT reached IDR 4.9 trillion, up 9.37 percent yoy. “The company is doing efficiencies, including advertising costs, market research, and promotion which are down 6 percent yoy so that the ratio of these costs to income dropped to 9.97 percent,” said Andy.
The company booked net profit amounting to IDR 3.6 trillion, growing 9.9 percent over the same period last year, which is according to the analyst expectations and consensus.
Samuel Sekuritas recommended HOLD for UNVR with a target of IDR 49,400. (*)