Matahari's net profit rose 9.6% last year

Matahari's net profit rose 9.6% last year

Rendi A. Witular, The Jakarta Post, Jakarta

The country's largest retailer PT Matahari Putra Prima said on
Thursday that its audited net profit surged by 9.6 percent last
year due to lower operating costs.

The company's profit rose to Rp 115 billion (US$13.5 million)
or Rp 45 per share last year from Rp 105 billion or Rp 40 per
share in 2002, despite a 2.76 percent decline in sales to Rp 5.06
trillion from Rp 5.21 trillion.

Analysts believe that the decline in sales was caused by
weaker consumer purchasing power amid worsening unemployment in
the country during 2003.

The publicly listed Matahari said that the rise in net profit
last year was mainly caused by its ability to trim down its sales
and administration costs to Rp 1.39 trillion from Rp 1.49
trillion in 2002.

The company, which operates 64 supermarkets and 77 department
stores in 38 cities in Indonesia, has estimated its sales will
grow by around 10 percent this year, driven mostly by consumer
spending related to the upcoming elections.

Matahari, which enjoys a 20 percent share of the country's
retail sales market, excluding traditional markets, is controlled
by the Lippo Group.

The company earlier said that it planned to spend around Rp
250 billion this year on opening at least 12 new outlets.

After finishing a debt and organizational restructuring in
2002, the company has launched an aggressive expansion to
increase its market share amid a tougher competitive environment
in the sector.

The restructuring started in 1997 when the Lippo Group
purchased a majority stake in the company. Since then, the
restructuring has halted the company's expansion, with it only
opening up one or two additional outlets per year.

Matahari shares ended higher by Rp 25 at Rp 675 on Thursday's
trading.