Ramayana Lestari Sentosa (RALS IJ): Bracing the Impact of Eid al-Fitr 2018 May 25, 2018

A Glimpse of 3M18 Results

Total sales reached IDR 1.52tn (+2.5% y/y) or equaled to 18.3% run rate to our FY2018 forecast as strong growth of 14.3% y/y in consignment sales offset contraction in direct purchase sales (-4.4% y/y).

Gross profit grew 10.9% y/y to IDR 416 bn on the back of 9.8% fall in COGS. RALS still recorded an operating loss of IDR 7 bn. We considered this figure as a vast improvement from an operating loss of IDR 20 bn in 3M17.

For the bottom line, RALS recorded a 410% y/y spike in net profit to IDR 15 bn, after receiving additional revenue (IDR 23 bn) in the form of interest income.

Expanding double-digit (14.3% y/y), Consignment sales stood at IDR 627 bn as RALS expanded its product offerings with more consigned merchandise. Consignment sales contributed 41.2% to FY2017 total sales compared to 32.3% in FY2011. Consignment margin was slightly down to 25% from 26.3% in 3M18 despite modest growth of 8.8% y/y to IDR 157 bn in consignment net fee.

Net revenue from Supermarket segment continued to slid (-20.2% y/y) as RALS is in the middle of business transformation by axing money losing outlets within the supermarket segment and leasing the vacated space to third party vendors.

However, supermarket’s operating income has been back in black in the last two quarters after incurring losses over the past five years. 3M18 operating profit was at IDR 6.9 bn, compared to an operating loss of IDR 17.9 bn recorded in the same period last year.

On the other hand, clothing & accessories segment maintained its upward trend by rising 9.9% y/y to IDR 692 bn. Continuation in uptrend also can be seen in margins. GPM, OPM, and NPM slightly improved to 39.6%, -0.7%, and 1.2%, respectively.

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