JAKARTA: PT Unilever Indonesia, the local arm of Anglo-Dutch consumer goods giant Unilever NV and Plc., posted an increase in sales and net profits in the first quarter of this year, thanks to lower finance costs and rising selling prices.
Unilever Indonesia rounded up the first three-month period of this year with a 7.8 percent increase in net sales to Rp 9.41 trillion (US$726 million) from Rp 8.73 trillion during the same period last year.
The brand holder of Dove personal care, Blue Band margarine and Sariwangi tea, saw its net profits grow by 16.9 percent to Rp 1.59 trillion in the January to March period this year compared to Rp 1.36 trillion in the same period last year.
Reza Priyambada, an analyst with NongHyup Korindo Securities Indonesia, said on Thursday that the company’s sales growth was better than what analysts on average had predicted.
“We previously estimated that the consumer goods giant would grow by only around 5 percent in the first quarter as consumers’ purchasing power remained weak,” he told The Jakarta Post.
Unilever Indonesia’s significant increase in net profits was attributed to its lower finance costs and rising sales, according to the company’s quarterly financial report that was published on the Indonesia Stock Exchange (IDX) website on Wednesday.
The company’s finance costs slumped by 30.4 percent to Rp 33 billion from Rp 47.38 billion year-on-year (yoy).
Finance costs represent interest and other costs that an entity incurs in relation to the borrowing of funds.
Unilever Indonesia has slashed its bank loans to Rp 100 billion by the end of March from the Rp 1.25 trillion recorded late last year, the financial report showed.
The remaining bank loan is from Deutsche Bank AG, Jakarta, with an interest rate of 7.65 percent.
Aside from debt repayment, the company saw its cost of goods sold increase by almost 2 percent from Rp 4.52 trillion in the January to March last year to Rp 4.61 trillion in the first quarter of this year.
Harry Su, an analyst with Bahana Securities, stated previously that the firm had raised its selling prices to offset a possible decline in sales volume caused by the country’s relatively unexciting economic growth outlook this year.
Unilever Indonesia — whose products are mostly sourced from oil-related materials — had raised its average selling price by 1 percent this year after increasing the price by around 8 percent last year, Harry informed the Post.
Harry argued that the firm’s business outlook would remain bright this year as the global oil price slump would compensate its royalty payment hike.
Unilever Indonesia’s royalty payment — an obligatory fee to utilize trademarks, technologies and services owned by the parent — has gradually increased over the last two years, from a maximum of 5 percent in 2013 to a maximum of 8 percent in 2015 onward.
Unilever Indonesia’s shares, which are traded on the bourse under the code UNVR, rose by 3.47 percent to Rp 41,750 apiece on Thursday’s close from Rp 40,350 apiece on the previous closing.
