PT Gajah Tunggal Tbk Net Sales Increase by 4.6% in 1Q19 as Export Sales Recover
PT Gajah Tunggal Tbk sales increased from Rp 3,861 billion in 1Q18 to Rp 4,038 billion in 1Q19. Stronger export sales were the major driver for the Company’s net sales to grow by 4.6%. The Company’s export sales increased by 11.1% while domestic sales increased 1.0%. The Company continued to perform strong in the OEM-segment while sales in the domestic replacement market remained largely flat.
The Company’s gross margins declined slightly from 17.7% in 1Q18 to 17.4% in 1Q19, predominately as a result of a weaker Indonesian Rupiah compared to the US Dollar as the Company’s costs are mostly in or linked to the US Dollar. Higher marketing related costs were the major driver of higher operating expenses in 1Q19 compared to 1Q18 which contributed to the lower operating and EBITDA margins realized for the quarter. Although 1Q19 margins declined YoY, profitability did improve compared to 4Q18, reflecting a stable exchange rate and benign raw material prices from earlier quarters. Due to the time lag, it was only in 1Q19 when the Company’s margins were positively impacted by the favourable prices of key raw materials from earlier quarters. The Company’s EBITDA declined YoY from Rp 497 billion/USD 36.8 million in 1Q18 to Rp 463 billion/USD 32.5 million in 1Q19 reflecting the lower margins. Despite the lower gross and operating margins, the Company managed to realize a higher net profit of Rp 169 billion in 1Q19 compared to Rp 52 billion in 1Q18, mainly due to higher sales and because of a gain on foreign exchange reflecting a positive translation of the Company’s US Dollar denominated debt as the Indonesian Rupiah was stronger at the end of 1Q18 compared to the end of FY18.
As of the end of 1Q19 the Company complies with the covenants set out in the Senior Secured Term Loan Facilities Agreement.
The Company received several awards during 1Q19. Several OE Partners gave the Company recognition for its outstanding performance in terms of quality and delivery. Amongst others, the Company received an “Appreciation of Delivery Performance” from Hino while SGM Wuling, a Chinese automobile manufacturer who in recent years started operations in Indonesia, acknowledged the Company with the “International Pioneer Award”. Furthermore, GT Radial, the Company’s brand for passenger car radial tires, was included in the 500 Brand Champions of the Year 2019 by Infobrand.id in collaboration with research institute TRAS N CO.