Matahari Reported Sales of 7.2 Trillion and Net Income of 626 Billion in 1H24

Matahari Reported Sales of 7.2 Trillion and Net Income of 626 Billion in 1H24

Highlights:

· 1H24 Sales were IDR 7.23 trillion vs. IDR 7.39 trillion last year, representing -2.8% SSSG

· Gross Margin for the period was 34.9%, lower than last year's 35.3%

· EBITDA was IDR 988 billion, and Net Income was IDR 626 billion

· Management provides guidance of IDR 1.2 trillion EBITDA for FY24

Today, Matahari ("Company"; stock code: "LPPF") released its financial results for the first half of 2024, highlighting the impact of a challenging Lebaran and weak on-going consumer spending. Despite these issues, the Company continued with progress on strategic initiatives.

Sales for the period were IDR 7.23 trillion, a decrease of 2.2% compared to 1H23, equivalent to -2.8% SSSG. Gross Margin was 34.9%, down from 35.4% in the same period last year, due to stock clearance activities early in the year. Earnings Before Interest Tax, Depreciation, and Amortization amounted to IDR 988 Bn, with Net Income at IDR 626 Bn. Based on first half results, Management projects FY 2024 EBITDA of IDR 1.2 trillion.

Matahari progressed on its strategic initiatives, especially in merchandising. The Company aims to boost productivity by expanding the space and product range of its major consignment brands. Private label brands are being rebranded to enhance customer appeal, and the in-house brand SUKO is poised to expand into more stores.

Matahari will continue leveraging influencers and social media to increase brand awareness. A major campaign is planned for the second half of 2024, focusing on community building and enhancing brand engagement.

Digital initiatives are advancing, with 58% of consignment vendors (CV) now onboarded onto the supplier platform. User experience is expected to improve with greater CV assortment, live commerce, fulfilment from stores and improved search features.

The Company is postponing new store openings for the second half of the year, being selective about opening in high-quality malls.

The Company remains focused on cost management. Rental negotiation in the first half resulted in savings, supported by rental rebates and variable rental agreements. Labor productivity initiatives planned for the second half are also expected to yield results.

"Our results in the first half reflect the persistent weakness in consumer spending, particularly for apparel and footwear. However, we remain committed to our strategic growth initiatives," stated Monish Mansukhani, CEO of Matahari. "We are focused on enhancing our operations and expanding our reach to serve our customers better."