ASEAN KEY DESTINATIONS
Indofood’s sales up double digits, but profits down in 2013
Food giant PT Indofood Sukses Makmur (INDF) announced on Friday that its consolidated sales rose by 15 percent in 2013, supported by most of its business divisions.
In a statement, Indofood said that its sales stood at Rp 57.73 trillion (US$5.05 billion) in 2013, up 15 percent from Rp 50.2 trillion a year ago.
The growth rate was even higher than the 10.4 percent it saw in 2012.
Indofood — which is run by the Salim family — said that most of its business divisions contributed positively to the sales figure.
At the moment, the company runs five business divisions consisting of consumer branded products (CBP), flour-maker Bogasari, agribusiness, distribution, cultivation and processed vegetables.
The CBP and Bogasari divisions made up 42 percent and 26 percent of the sales, respectively.
Meanwhile, the rest of the sales came from the agribusiness division with 20 percent, the distribution division with 8 percent and the cultivation and processed vegetables division with 4 percent.
The cultivation and processed vegetables division is Indofood’s newest.
It began to be consolidated in Indofood’s financial performance since September last year after the company acquired a 63.5 percent stake within China Minzhong Food Corporation Limited.
According to Indofood’s statement, the CBP division, which is represented by subsidiary PT Indofood CBP (ICBP), posted a 14 percent surge in its sales to hit Rp 24.25 trillion.
ICBP’s business products include noodles, dairy, snacks, food seasonings, nutritious and special foods and beverages.
Noodles remain its biggest contributor to growth as they made up 68 percent of sales, followed by dairy with 18 percent, snacks with 7 percent, food seasonings with 4 percent, nutrition and special foods with 2 percent and beverages with 1 percent.
In its own statement, ICBP attributed its positive performance to higher sales volumes of all its products and increases in its average selling prices.
ICBP said that higher costs, especially wages, had squeezed its gross profit margin to 25.6 percent in 2013, from 26.7 percent in the previous year.
Its operating income margin declined as well to 11 percent, from 13.1 percent, as the company recorded higher sales expenses.
In the end, ICBP’s net profit rose only by 2.1 percent to Rp 2.23 trillion.
Meanwhile, according to Indofood, its Bogasari division gained a 17.2 percent increase in sales and its distribution division registered a 15.6 percent rise in sales.
Its agribusiness division — represented by subsidiaries PT PP London Sumatra Indonesia (LSIP) and PT Salim Ivomas Pratama (SIMP) — became the only division to report a slump in its business.
“The agribusiness group recorded a 4.1 percent decline in total sales value, mostly attributable to lower edible oil sales,” Indofood said in its statement.
Despite the double-digit growth in sales, Indofood saw its net profits fall 23.2 percent to Rp 2.5 trillion last year because of higher raw
material costs, higher wages, lower average selling price of its agribusiness products and foreign exchange losses.
Following the release of the 2013 financial statements, Indofood’s share rose 1.4 percent to Rp 7,325 apiece on the Indonesia Stock Exchange, while those of ICBP rose by 1.6 percent to Rp 10,975 per share from a day before.
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