Matahari suffers loss despite sales hike

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)