REG - Dairy Farm Intnl Jardine Matheson Hdg - PT Hero Supermarket Tbk Full Year 2021 Results

Jardine Matheson HoldingsAnnouncement

02/03/2022 10:45

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RNS Number : 3722D  Dairy Farm International Hldgs Ltd  02 March 2022

 Announcement
 2nd March 2022

 

 

PT HERO SUPERMARKET TBK

FULL YEAR 2021 RESULTS

 

 

 

The following announcement was issued today by the Company's 89.3%-owned
subsidiary, PT Hero Supermarket Tbk.

 

 

 

For further information, please contact:

 

 Dairy Farm Management Services Limited
 Diky Risbianto                          (62-21) 8378 8388

 

 

 

South Tangerang, 2(nd) March 2022

 

PT HERO SUPERMARKET TBK
FULL YEAR 2021 RESULTS

 

Highlights

 

·    Home Furnishing, Health & Beauty and Grocery Retail business
materially affected by pandemic-related restrictions

·    IKEA opened three new stores, including its first store outside Java,
a Giant conversion in Bali

·    Successful execution of business transformation programmes enhanced
business fundamentals

·    PT Hero remains well-positioned for growth over longer-term

 

Results

 

                                       Audited Full Year
                                    2021              2020              Change
                                    Rp billion        Rp billion        %
 Net Revenue*                       3,481              3,559            -2.2
 Gross Profit*                      1,517              1,776            -14.6
 Loss for the year  - Continuing    (932)              (519)            -79.6
                    - Discontinued  (32)               (696)            +95.4
                    - Total         (964)              (1,215)          +20.7
                                    Rp                Rp                %
 Loss per share     - Continuing    (223)             (124)             -79.8
                    - Discontinued  (7)               (166)             +95.8
                    - Total         (230)             (290)             +20.7

* From continuing operations

 

PRESIDENT DIRECTOR'S STATEMENT

 

Introduction

 

The Company faced significant challenges in 2021 due to the COVID-19 pandemic,
the related imposition of PPKM (Enforcement of Limitation on Community
Activities), and consequent changes in customer shopping habits.
Government-imposed restrictions on movement eased over the course of the
second half, however, and overall performance improved in the fourth quarter
relative to the third quarter.

 

In May 2021, the Company announced that, following a strategic review, it
would be pivoting its trading operations away from the Giant banner by
increasing investment in its strong brands of IKEA, Guardian and Hero
Supermarkets.  This change in strategy is a decisive and necessary response
to changing market dynamics, particularly given the move away from the
hypermarket format by Indonesian consumers in recent years.  During the
second half, the Company successfully executed the restructure of Giant in
Indonesia.  Six stores have been successfully converted to the Hero
Supermarket banner.  In addition, IKEA opened its first store outside Java, a
Giant conversion in Bali.

 

Financial Performance

 

The Company reported a loss of Rp 964 billion in 2021, which included Rp 32
billion of losses associated with discontinued operations.  A combination of
net non-recurring charges incurred as a result of the Giant restructure as
well as additional tax related expenses accounted for around 70% of the losses
in the year.

 

IKEA's performance continued to be significantly impacted by pandemic-related
restrictions, resulting in over 130 equivalent days of lost trade due to
forced store closures, limitations on store operating capacity and
restrictions on dining.  In addition, global supply chain disruptions
impacted stock availability during the year.  We believe, however, that the
foundations have been laid to support strong growth when the external
environment normalises.

 

IKEA's total network space in Indonesia has more than doubled relative to the
start of the year, following the opening of the Bandung and Jakarta Garden
City stores. In addition, in November, IKEA opened its first store outside
Java through the conversion of a Giant store in Bali.  This expansion follows
IKEA's strategic imperatives of being more accessible and affordable to the
people of Indonesia and we believe these stores will generate good returns for
our shareholders over time.

 

Guardian's performance continued to be significantly impacted by
pandemic-related restrictions in Indonesia and associated changes in customer
behaviours, particularly as traffic reduced in shopping malls.  Nevertheless,
Guardian's like-for-like sales did improve in the fourth quarter as
restrictions eased.  In addition, Guardian continues to adapt to the changing
external environment through price reinvestment to drive additional value for
customers, growth in new formats and range optimisation tailored to specific
customer demographics.

 

The performance of Hero Supermarket stores in the year was also affected by
the imposition of pandemic-related restrictions and changes in customer
behaviours.  Like-for-like sales, however, began to improve in the fourth
quarter with a progressive improvement in customer traffic.  Following the
Giant restructure, six stores have been converted to Hero Supermarket
stores.  Hero is also innovating through range optimisation programmes and
the rollout of new online shopping initiatives.

 

Business Update

 

Following the change in PT Hero's strategic approach, the Giant banner in
Indonesia ceased operations in July.  The Company has successfully divested a
number of stores to third parties and remains in active discussions to dispose
of several further stores.  In addition to stores already converted, several
additional IKEA conversions are also planned.

 

People

 

We would like to express our deep thanks and appreciation to all our team
members who have worked tirelessly to service our customers during a
challenging 2021 - without them nothing would be possible.

 

Prospects

 

The duration and extent of the impact of the COVID-19 pandemic on PT Hero
remains uncertain.  However, PT Hero is cautiously optimistic that the
external trading environment will improve in 2022, following improved
performance over the course of the second half of 2021.  The Company remains
committed to its retail future in Indonesia.  We believe that the successful
execution of business transformation programmes over the past few years have
enhanced the foundations of PT Hero and positioned the Company strongly for
growth in Indonesia over the long-term.

 

Patrik Lindvall

President Director

2(nd) March 2022

 

For further information contact:

Patrik Lindvall, President Director

PT Hero Supermarket Tbk

Tel: +62-21-8378 8388

E-mail: extcomm@hero.co.id

 

- end -

 

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