by Robert Yota
Publicly-listed consumer goods corporation PT Kino Indonesia (KINO) managed to perform positively during the first quarter of this year. Its Q1 financial result showed an 11% increase in sales to Rp1.11 trillion from the same period last year. The sales contribution for the quarter consisted of body care products with Rp 555.03 billion, beverages with Rp 412.2 billion, food with Rp 105.23 billion, pharmaceutical products with Rp 36.13 billion, and pet food with Rp 4.43 billion.
Meanwhile, the company's gross profit also grew 22.46% to Rp 555.70 billion in this year's first quarter compared to Rp 453.77 billion from 2019's first quarter. However, net profit in this year's first quarter decreased by 81.10% into Rp 57.8 billion from Rp 306.13 billion in last year's first quarter.
"We booked a high net profit in 1Q-2019 as there was a gain from a one-off discounted stock purchases that amounted to Rp 264 billion. If we take the one-off gain out of the calculation, our net profit would be around Rp 39.7 billion in 1Q-2019, which means that we enjoyed a 45% growth in net profit into Rp 57.8 billion during 1Q-2020," Kino Indonesia president director Harry Sanusi told Forbes Indonesia recently.
Harry believes KINO's second quarter and the remaining of 2020 will be challenging due to COVID-19. "However, with the strategic adjustments that we plan to implement, KINO remains confident that we will still achieve the objectives we have previously set for this year," he added.
Inline with Harry’s forecast, Natalia Sutanto from Danareksa Sekuritas believes KINO will face challenges in reaching its full-year target, as 30% of KINO’s total raw materials are in US Dollar. Moreover, with more limited operating hours and cities implement PSBB (the large-scale social restrictions), the distribution of products to general trade may be impeded. “Therefore, we estimate higher receivable days and more working capital needed to support the production of new hand sanitizer products, which we believe can offer high margins,” Natalia stated in her recent research.