Unilever sees profits hit amid falling rupiah

JAKARTA. Indonesia’s consumer-goods manufacturer, Unilever Indonesia Tbk, saw its net profit decline by 1.2 percent last year to Rp 5.85 trillion (US$443.2 million), despite a 5.7 percent increase in sales amid the weakening rupiah.

The company, a subsidiary of Unilever BV, was under pressure from the economic slowdown early last year. As the economy rejuvenated in the third quarter, the rupiah depreciation created additional problems that led to a decrease in exports.

"Despite the company recording 6.6 percent domestic sales growth in 2015, total sales growth was only 5.7 percent because of a fall in exports," Unilever Indonesia spokesman Sancoyo Antarikso said in Jakarta on Thursday.

Despite the increasing gross profit margin from 49.85 percent in 2014 to 51.11 percent in 2015, the company saw its operating profit margin down from 23.22 percent in 2014 to 21.76 percent in 2015 as a result of ballooning operating costs.

"It is a big challenge for the company because 55 percent of our cost comes from currency risk," Sancoyo underlined.

The company sold one of its brands - "SHE" - in March 2015, after buying it from Unilever Body Care Indonesia in 2012. Adding Rp 7.56 billion of cash to the company, it was still not enough to help increase the net profit. (Anton Hermansyah)