Ramayana's 3Q profit falls on costs
Ramayana's 3Q profit falls on costs
Naila Firdausi, Bloomberg/Jakarta
PT Ramayana Lestari Sentosa, Indonesia's second-largest retailer by sales, had a 12 percent decline in third-quarter profit as costs rose and a stronger rupiah cut the value of its dollar deposits.
Net income for the three months ended Sept. 30 fell to Rp 59.36 billion (US$6.5 million) from Rp 67.58 billion a year ago. Sales rose 4 percent to Rp 887.6 billion. The numbers were calculated by deducting first-half earnings from nine-month results released by the Jakarta-based company on Tuesday.
"Ramayana books foreign-exchange losses when the rupiah strengthens because of its dollar deposits," said Teguh Hartanto, an analyst at Namalatu Cakrawala Securities in Jakarta. "Besides, sales were slow."
Ramayana had $13 million in dollar-denominated time deposits as of Sept. 30, the retailer said in a statement to the Jakarta Stock Exchange. Ramayana's selling and administrative expenses rose 8 percent in the quarter on year, outpacing sales growth.
The rupiah fell 8 percent in the nine-month period, according to Bloomberg data. The currency gained about 3 percent in the July to September period.
In the nine months ended Sept. 30, Ramayana's profit rose 18 percent as it sold more clothes and benefited from foreign- exchange gains. Net income in the nine months rose to Rp 171.52 billion, helped by Rp 21.8 billion in foreign-exchange gains, and a 9 percent gain in sales to Rp 2.32 trillion.
"It was a weak nine-month performance," said Rani Sofjan, an analyst at Mandiri Sekuritas in Jakarta. "We are reviewing our estimates" for Ramayana's full year earnings for 2004 and 2005, she said in a note to clients.
Ramayana, which has 82 stores nationwide, projected in July full-year sales growth of 8 percent from existing stores and an increase of as much as 13 percent when it adds nine stores by the end of the year. Full-year profit may rise 16 percent, the company then said. It posted a profit Rp 302.5 billion last year.