Ramayana anticipates 100% profit increase

JAKARTA (JP): Publicly listed retail company PT Ramayana Lestari expects more than a 100 percent increase in net profit this year to Rp 201 billion (about US$25 million) from Rp 94.9 billion the previous year.

Corporate secretary Hardjanto Salim said here on Friday the profit target was achievable given the company's bullish performance over the past four months.

"Our net sales for the first four months (of the year) have reached Rp 472 billion, or about 36.3 percent of our initial sales target of Rp 1.3 trillion for the entire year," he said after the company's shareholders meeting.

During the meeting, shareholders approved the company's plan to pay dividends of Rp 40 per share for 1998.

He said the company had raised this year's sales target to Rp 1.5 trillion from Rp 1.3 trillion due to the higher than expected sales performance over the last four months and the promising outlook for the coming months.

He said the reopening of five stores in Greater Jakarta which were destroyed during the May 1998 riots, and the planned opening of a new store in East Java later this year would contribute to higher sales growth.

The expansion plan will cost around Rp 40 billion, he said.

He said 12 of Ramayana's 76 stores were destroyed during last May's riots.

Ramayana lost Rp 69.1 billion in revenue and 77,200 square- meters of retail space in the riots, he said.

The losses were fully covered by insurance, he said, adding that the firm had received Rp 12 billion of its total Rp 89 billion claim and expected to receive an additional Rp 50 billion this year.

Despite the huge losses suffered during the riots, Ramayana's net sales for 1998 rose to Rp 1.29 trillion from Rp 1.13 trillion in 1997, while operating income increased to Rp 128.95 billion from Rp 97.84 billion, Hardjanto said.

"Last year was the worst situation we ever encountered. Still, we came out very positively. That makes us very optimistic about this year," he said.

This year's political campaign and elections have not significantly affected the company's financial performance, he said.

The general election, which took place on Monday, and the two weeks of campaigning before the polls ran smoothly with no reports of significant unrest. There were concerns the political events would be marred by unrest similar to the May riots.

Hardjanto said Ramayana's net sales for the year surged from Rp 84 billion as of April to Rp 104 billion as of May, almost double the Rp 56 billion booked by the company in the January to May period last year.

"As long as the situation remains calm and orderly, the retail business does not really care which party wins the elections," he said.

PT Ramayana Makmur Sentosa holds a 60.6 percent stake in Ramayana. The remaining shares are held by Paulus Tumewu (10.3 percent), cooperatives (0.5 percent) and the public (28.6 percent). (cst)