PT Gajah Tunggal Tbk – Covid-19 Pandemic Starting to Affect Sales Performance in 1Q20
PT Gajah Tunggal Tbk’s net sales declined in 1Q20 compared to 1Q19 as the impact of the Covid-19 pandemic started to affect the Company’s sales performance. Net sales declined by 6.0%, to Rp 3,797 billion in 1Q20. Sales in both the domestic and export market declined by 5.2% and 7.3% respectively.
However, the Company’s gross margins expanded from 17.4% in 1Q19 to 20.8% in 1Q20 driven by mainly lower raw material prices and on average a stronger Indonesian Rupiah compared to the US Dollar during 1Q20 compared to 1Q19. As a result, the Company was able to grow its gross and operating profit, as well as EBITDA, despite the decline in net sales. PT Gajah Tunggal Tbk reported an EBITDA of Rp 597 billion/US$ 42.9 million in 1Q20 compared to an EBITDA of Rp 463 billion/US$ 32.5 million in 1Q19. The Covid-19 pandemic caused a severe depreciation in the Indonesian Rupiah versus the US Dollar towards the end of the quarter. Since the exchange rate was significantly lower at the end of 1Q20 compared to the end of FY19, a loss on foreign exchange was recorded, reflecting mainly the translational result of the Company’s foreign currency denominated liabilities. This resulted in the Company realizing a net loss of Rp 404 billion in 1Q20 compared to a net profit of Rp 169 billion in 1Q19.
At the end of 1Q20 the Company complied with the financial covenants as stipulated in the Senior Secured Term Loan Facilities Agreement.
PT Gajah Tunggal Tbk received the Indonesia Top Digital PR Award 2020 from Tras N Co Indonesia and Infobrand.id in 1Q20. The award was given as an appreciation for the Company’s brand GT Radial, which through increasing brand awareness and brand image gained popularity in the digital landscape.