May 6, 2010

Gajah Tunggal vs Multistrada Sarana

Indonesia's largest tire manufacturer, controlled by Indonesian tycoon Syamsul Nursalim, PT Gajah Tunggal Tbk (GJTL) yesterday reported first quarter (Q1 2010) financial performance. It shows an impressive operational performance
Along with a steep jump in operating profit, Gajah Tunggal also successfully puts down interest expenses and a lucky foreign exchange gain.
In the operational line, I think Gajah Tunggal's performance has outstripped PT Multistrada Arah Sarana Tbk (MASA). 
Gajah Tunggal posted a 32.76% growth in sales in the first quarter this year from Rp1.74 trillion in Q1 2009 to Rp2.31 trillion. Multistrada booked a 25.27% increase in sales from Rp415.69 billion in Q1 2009 to Rp520.74 billion, only 22.5% of Gajah Tunggal's sales. Gajah Tunggal's sales growth is higher than Multistrada's sales increase.
In result, growth of Gajah Tunggal's operating profit is steep higher than Multistrada. Gajah Tunggal booked a 325.29% jump in operating profit from Rp74.19 billion to Rp315.53 billion in Q1 2010, while Multistrada posted Rp70,07 billion in operating profit, a 38.59% increase from a year before of Rp50.56 billion.
Following GJTL's good operational line, its operating margin, showing profitability, skyrocketed from 4.27% in Q1 2009 to Rp13.63%, surpassing operating margin of Multistrada.
MASA's operating margin made a slight increase from 12.16% in Q1 2009 to only 13.46% in Q1 2010, reflecting a soaring cost of goods sold and operating expenses. 
Below operational line, Multistrada could post a 3,008.47 jump in net profit from net loss of Rp1.89 billion in Q1 2009 to net profit of Rp54.97 billion, mainly underpinned by a rising foreign exchange gain. It is like Gajah Tunggal, Multistrada also made lower interest expenses.
GJTL posted a 183.64% growth in net profit from net loss of Rp294.69 billion in Q1 2009 to net profit of Rp246.48 billion in Q1 2010. If the company could gain more foreign exchange in Q1 2010, it would post higher net profit.
Multistrada should focus how to reduce both COGS and operating expenses in a bid to jack up its operating margin.

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