Matahari suffers loss despite sales hike

JAKARTA (JP): Retail chain PT Matahari Putra Prima booked a slight increase in sales and a stronger gross margin performance in 1998, but a huge foreign exchange loss put the company deeper into the red.

Matahari announced on Thursday that sales during 1998 reached Rp 2.2 trillion (about US$258 million), an increase of 4 percent over 1997.

"Adjusting (the figure) for stores closed during the year, sales showed an increase of 10.1 percent which was in line with the company's forecast for 1998," the publicly listed retail chain said in a statement.

The company plunged deeper into the red in 1998, with net loss rising to Rp 156.7 billion from Rp 138.2 billion in 1997 due to an increase in its foreign exchange loss to Rp 261 billion during the year.

The sharp depreciation of the rupiah against the U.S. dollar caused a sharp increase in the company's dollar denominated debt and dollar-based spending in terms of rupiah.

Matahari said operating income dropped nearly 50 percent to Rp 53 billion in the year ending December 31, from Rp 112.1 billion in the same period during 1997.

Despite the year-on-year fall, the operating income reflected a significant turnaround from the loss of Rp 24 billion booked at the end of the first semester, the company said.

"The improved operating income was due to a stronger gross margin performance which reached 35.5 percent for the year and improved productivity from store downsizing and lower related costs," it said.

Matahari, the country's largest retail company with 73 stores nationwide, expected the sales to increase by 10 percent this year. (hen)