Petra Foods: 1Q15 group sales was -14% y/y in USD terms, -9% y/y in IDR i.e. the big drag was weak real consumption in Indo. Unlike 2014, weak reported 1Q sales were no longer just about translation effects.
Petra’s Indo sales in 1Q15 was -12% in IDR terms. This was worse than FMCG consultants’ market data of “-2% to -4% y/y decline in Indo retail sales volume” and AC Nielsen’s more specific data on Indo’s chocolate confectionery (low-single digit growth).
Management cited part of the reason as wholesalers and retailers destocking as consumer buying slowed. That said, one cannot override weak macro trends as commodity prices stay soft, promised infrastructure spending projects are slow to come and rising inflation curbs incomes and raises cost of living.
Petra’s lower-end products have been especially hard hit.
Management guided that some of the destocking effect might gradually relent so 2Q15, while still weak, could be better than 1Q.
CIMB maintained its Reduce rating and lowered its TP to $3.00 from $3.70.
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