Tuesday, March 22, 2011

So this is Indofood's next strategy


Investors is still waiting for further action of PT Indofood Sukses Makmur Tbk to maintain its performance this year after it succeeded to book net income of IDR2.95 trillion or up 42.2% compared with the realization in 2009.

Head of Research of PT Recapital Securities Pardomuan Sihombing said that the investors is awaiting for the next solid action of Indofood, especially corporate action in form of expansion plan intended to maintain positive sentiment from Indofood’s current financial statement.

“Besides waiting for corporate action, the increase of commodity price which occurred lately has to be a serious concern for the company. The increasing commodity price will overshadow the company,” he said.

Based on the company’s financial statement published yesterday, Indofood successfully booked consolidated net sales of IDR38.40 trillion in 2010 or up 2.7% from IDR37.40 trillion in 2009. The increasing sales are contributed by all strategic subsidiary of Indofood, except Bogasari.

Group of famous branded food – such as instant noodle, dairy, food flavoring, snack, nutrition and special food – contributed significant net sales to the company.

The increase, as the financial statement showed, was driven by the high sales volume and the increase of average selling price in several categories of product.

Otherwise, the decline of contribution in net sales which booked by Bogasari Group was happened due to the decrease of wheat flour price following the decline of global grain price.

The financial statement also showed the increase of company’s gross income as high as 19.4% or IDR 12.47 trillion compared to IDR10.44 trillion in 2009. The increase was a result of the high sales volume in all group of product and the decline of commodity price.

The company also recorded an increase of gross income margin in 2010 as much as 460 basis points or 32.5%.

Indofood’s operating income grew IDR6.73 trillion in 2010 or up 34.5% fromIDR5,0 trillion in 2009. Operating income margin increased 17.5% last year compared to the previous year of13.4%.

Meanwhile, Indofood’s management saw a solid operational performance due to the increasing core profit of IDR2.98 trillion in 2010 from IDR1.73 trillion in 2009.

“We are glad to see a solid performance and continuing growth within consecutive six years,” said President Director and CEO of Indofood Anthoni Salim in a press release, yesterday.

Besides, as he said, the robust financial position of the company can be seen from the improving net gearing ratio of 0.16 times compared with 0.83 times in 2009.

One of Indofood’s subsidiary, PT Indofood CBP Sukses Makmur Tbk also booked significant increase of net income and core profit as much as 58% and 56.9% to reach IDR1.7 trillion and IDR1.68 trillion respectively. Those figures have showed strong operational performance of the company.

Indofood CBP is a packed food producer which previously stood under the management of Bogasari Group (ISM).

Financial report of Indofood CBP showed that the company succeeded to post IDR17.96 net sales during 2010 or up 105 compared to IDR16.33 trillion in 2009.

Overall, the release of Indofood’s financial report has given positive contribution to Indofood shares.

In yesterday’s closing, Indofood Sukses Makmur (INDF) rose 100 points from last week’s closing level to stand at the level of IDR4,950. Meanwhile, Indofood CBP Sukses Makmur were unchanged at the level of IDR5,000.

According to Pardomuan Sihombing, the increase of Indofood shares is boosted by positive sentiment from the financial report which successfully showing a good performance. However, the company still has to watch the increasing commodity price which may burden the company,” he said.

(please read Bisnis Indonesia Newspaper)

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