Unilever profit up 33% on higher sales

The Jakarta Post, Jakarta

Publicly listed PT Unilever Indonesia, a local unit of giant consumer goods company Unilever NV, reported on Friday that audited net profit surged by 33 percent last year on higher sales, amid strong consumer purchasing power.

In its financial statement, the company said that profit rose to Rp 1.29 trillion (US$151 million), or Rp 170 per share last year, from Rp 978 billion, or Rp 128 per share, in 2002.

The company booked an increase of Rp 8.12 trillion in sales last year as against Rp 7.01 trillion in 2002. The company, which produces popular Pepsodent toothpaste and Rinso detergent, recorded an operating profit of Rp 1.74 trillion, up from Rp 1.32 trillion.

Analysts said the surprisingly low record of inflation during 2003 had helped lift the company's sales, as it had boosted people's purchasing power, which, in turn, maintained strong domestic consumption.

Consumption has become the country's main economic growth engine since the late-1997 financial crisis.

According to the Central Statistics Agency (BPS), annual inflation in 2003 was 5.06 percent, the lowest year-on-year rate in four years.

Unilever is projected to post further strong growth this year, as consumer spending is estimated to remain strong, particularly during the general election, when political parties spend a lot of money on campaigning.

Other factors that will drive strong consumption are strong household savings, a low interest rate environment and the predominantly young Indonesian population.

Unilever profit and sales are estimated to rise at least 15 percent this year, according to a company executive, as quoted by Bloomberg recently.

Unilever shares ended higher on the Jakarta Stock Exchange on Friday, by Rp 25, to Rp 3,475.