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.