Unilever sales growth stagnates amid sluggish household consumption

Publicly listed consumer goods giant PT Unilever Indonesia recorded flat growth in sales last year amid sluggish household consumption.

The Anglo-Dutch company booked a 2.7 percent year-on-year (yoy) growth in sales to Rp 42.9 trillion (US$3.15 billion) in 2019, the company said in a statement obtained by The Jakarta Post on Thursday. 

However, if the company excluded the spreads business it sold last year, Unilever Indonesia’s sales growth increased by 4.8 percent yoy, it said. The rate was close to the country's overall household consumption growth of 5.01 percent in the third quarter of this year, which accounts for more than half of the country’s gross domestic product (GDP), Statistics Indonesia (BPS) data shows. 

The higher sales were not able to boost Unilever’s profits as it recorded a decline of 22.97 percent yoy to Rp 7.4 trillion last year from Rp 9.1 trillion in 2018.

“The lower profit was caused by the fact that we received a once-off gain from our spreads business divestment of Rp 2.1 trillion and a profit of Rp 200 billion from the segment,” the company said in the statement.

Without taking into account the spreads business, Unilever’s profits grew by 9.3 percent yoy last year compared to 2018, according to the company.

Unilever Indonesia director and corporate secretary Sancoyo Antarikso said the company is committed to adjusting to market demand and focusing on positive long-term financial performance by balancing out growth and margins.

“We will also continue our effort to innovate so our products and services will stay relevant for our customers in the future,” he said.

Shares in Unilever Indonesia, a big cap stock traded under the code UNVR on the Indonesia Stock Exchange, closed Thursday’s trading 0.3 percent lower at Rp 8,225 per share. The stocks have dropped about 18 percent in the past year, underperforming the broader benchmark Jakarta Composite Index’s 5 percent drop.