Matahari Department Store Owned By Conglomerate Mochtar Riady Rises From Destruction, Earns Rp439 Billion Profit From Previously Lost Rp617 Billion

Matahari Department Store outlet, (Photo: Doc. Matahari Dept. Store)

JAKARTA - PT Matahari Department Store Tbk (LPPF) managed to turn losses into profits in the third quarter of 2021. The retailer owned by the boss of the Lippo Group conglomerate Mochtar Riady earned a net profit of IDR 439 billion as of September 2021 compared to a net loss of IDR 617 billion in the same period the previous year.

In Matahari Dept Store's financial report published on the information disclosure page of the Indonesia Stock Exchange (IDX), quoted on Wednesday, November 3, the company posted gross sales of IDR 7.5 trillion in the third quarter of 2021, growing 28 percent compared to the same period in 2020. Matahari's net revenue was IDR 4.1 trillion in the first nine months of 2021, up 23 percent over 2020.

"It is known that Matahari temporarily closed 117 of its outlets due to an emergency PPKM, and 31 outlets remain open with several restrictions, such as maximum capacity in malls, restrictions on operating hours, and others," wrote the management of the Matahari Department Store.

PPKM is still continuing in August but with some positive developments each week. The government began to allow malls to open and eat in places with time restrictions.

Since September, children under the age of 12 are allowed to enter malls, restrictions on operating hours and capacity for eating/drinking activities in public places have been relaxed, all of which lead to higher mall visits.

In early September, Matahari opened 100 percent of its stores and continues to experience a positive week-by-week recovery. This continued in October with the recovery reaching over 70 percent compared to 2019.

To help shareholders gain better visibility of earnings, management provides outlook guidance. Matahari will open two new stores in December in Cianjur, West Java and Batam, Riau Islands, and targets to open ten more stores by 2022.

The new merchandise initiative paid off, with increased sales speed, productivity and gross margins.

Matahari is targeted to generate EBITDA of IDR 1 trillion for 2021 with positive net cash and zero bank loans. The company projects an EBITDA in 2022 of Rp1.8 trillion.

Accordingly, the Board of Commissioners revised the dividend policy, by setting a payout ratio of 50 percent or more of net income to be distributed in the form of interim dividends together with the announcement of the results of the third quarter and final dividends.

With clearer recovery visibility and strong balance sheet and cash flow, the Company plans to distribute an interim dividend of Rp100 per share on December 2, 2021, and proposes a final dividend of the same amount. Going forward, Management recommends the same amount for interim and final dividends.