Jan 21, 2011

Matahari FY10 operating income falls

Is the bottom line of retailer PT Matahari Putra Prima Tbk (MPPA) last year absolutely dazzling? It is true. Matahari, controlled by Lippo Group that is owned by Riady family, in an audited financial statement last year, posted an extraordinary income of Rp5.73 trillion. 
It was coming from the 90.76 shareholding sale of Matahari Department Store to PT Meadow Indonesia, wholly owned subsidiary of Meadow Asia Company Ltd, which is part of one of the world's largest private equity fund  CVC Capital Partners with a total deal of Rp7.2 trillion.      
In return, consolidated net income of Matahari last year skyrocketed 1,833.29% to Rp5.80 trillion or Rp1,122 per share from Rp300.04 billion in 2009. 
But, the extraordinary income won't emerge this year. Let's take a look at Matahari Putra Prima's operational performance, adversing from the bottom line.   
MPPA's operating income plunged 89.29% to Rp53.96 billion in 2010 from Rp504.27 billion in 2009, dragging down its operating margin to 0.63% from 4.90. The main reason for the steep drop was a 16.93% decrease in net sales.
MPPA posted Rp8.54 trillion net sales in 2010 from Rp10.28 trillion in 2009 as a result of a steep drop in consignment sales to Rp1.38 trillion last year from Rp5.03 trillion in 2009. However, MPPA was only able to lower its cost of sales 0.74% to Rp6.67 trillion from Rp6.72 trillion. Gross profit tumbled 47.75% to Rp1.87 trillion from Rp3.56 trillion, sending a lower gross margin to 21.89% from 34.63%.   

Disclosure: No position at the stock mentioned above.

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