Mitra Adiperkasa to increase net income

The Jakarta Post, Jakarta

Leading retailer PT Mitra Adiperkasa Tbk aims to increase its net income by between 20 percent and 30 percent this year, backed by increasing consumer disposable income and the expansion of its stores.

The firm gained Rp 11.48 billion (US$1.19 million) in net income in the first quarter this year, a 45 percent increase from last year's Rp 7.92 billion.

The company's sales increased by 34.7 percent in this year's first quarter to Rp 649.56 billion compared to Rp 482 billion in the corresponding period last year.

Director and corporate secretary Indrawana Widjaja said the company was still on target to reach the high end of its growth goals, as evidenced by its strong first quarter results.

"Same store sales have increased due to productivity gains and the economy is good, leading to higher consumption," he said after the company's annual general shareholders' meeting on Thursday.

Indrawan said the company had planned capital expenditures of Rp 180 billion this year to expand its stores in 22 cities.

"We plan to have 509 outlets by the end of the year," he said, adding that the company currently has 450 outlets covering over 200,000 square meters (sqm) of retail space.

He said two Zara outlets, scheduled to open in August, would take a significant part of the capital expenditures and should boost the company's future earnings.

"The store size of 1,500 sqm each is large and also the inventory costs are large," he said.

Indrawan said the company constantly sought to add new brands to its current portfolio of over 30 concepts, which currently range from department stores to coffee shops.

"The outlook for modern retail businesses in Indonesia is very bright," he said. "The shift from traditional to modern retailing has just begun."

"Traditional markets still account for 60 percent of business in Indonesia, while in neighboring countries it is the opposite."

He also said the recent sale of almost two million individual shares, owned by the company's directors and commissioners, were not an indication that management thought the company's shares had been overvalued.

"No, it's not overvalued. The selling was done to help liquidity since most of the shares are owned by institutional investors, who are in it for the long run," he said.

The company also agreed to distribute 20 percent of its 2004 net income of Rp 113.9 billion in the form of dividends. This amount is equivalent to a dividend of Rp 13.75 per share. (002)