by Robert Yota
Despite the ongoing COVID-19 pandemic, publicly-listed home improvement retailer PT Ace Hardware Indonesia (ACES) is still expanding its business by opening six new outlets since the start of 2020. Earlier this month, ACES inaugurated its 203rd store in Living Plaza Pamulang, Tangerang.
ACES’ revenue at the end of 2019 reached Rp 8.14 trillion, which is up 12.5% (YoY) compared to Rp 7.2 trillion in 2018. Furthermore, the company’s net profit increased by 6.8% (YoY) from Rp 965 billion in 2018 to Rp 1.03 trillion at the end of last year. ACES’ ability to safeguard its sales growth in double digits can be attributed to its constant expansion of new branches.
However, the company has forecasted its sales and earnings figures to drop by 25% in the first quarter of this year due to the COVID-19 outbreak that has weakened Indonesia’s economy and forced the company to temporarily shut down some of its stores. In its recent statement for the Indonesia Stock Exchange, ACES has acknowledged that starting from March to April, ACES has temporarily closed between 20-40 branches, and expects its closed physical stores to remain non-operational for at least the next three months since the initial closures.
“Due to COVID-19, ACES performance will likely be anaemic at best. Therefore, we estimate ACES’ sales for the remainder of 2020 to decline by 8.3%. The gross profit margin will also decline because of lower demand for home improvement products during the pandemic,” according to Danareksa Sekuritas analyst Andreas Kenny in a report.
Moving forward, ACES aims to intensify its online sales and promote its products that are related to COVID-19 such as protective gears (APD) and thermal scanners as strategies to weather the economic storm.