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Investor Summit 2011

First Semester 2011 Performance

Investor Summit 2011

Jakarta, October 5, 2011 – PT Kalbe Farma Tbk  today  participated  in  Investor  Summit 2011   organized by the  Indonesia Stock Exchange  at  the  Ritz  Carlton  Hotel  Pacific Place,  Jakarta.In the presentation  agenda, Kalbe highlighted the Company’s performance  in  the  first  semester of 2011 based on the Company’s Consolidated Financial Statement  for  the  period  ended June 30, 2011 (Unaudited).

PT Kalbe Farma  Tbk and Subsidiaries (“Kalbe”    or    “the    Company”)booked  a consolidated (unaudited) net profit of Rp 675 Billion for  the first semester of 2011,an increase of 18.0% as compared to the same period  last  year  of  Rp  572 Billion,  mostly driven by increases in gross profit and other income,lower tax expense and minority interests in  net earnings of subsidiaries.Earnings per share increased by 18.0% from
Rp 61 per share to Rp 72 per share.
 
“Through the first semester of 2011, all sectors in the Indonesian economy are faced with  intensified competition, driving  Kalbe  to continuously enhance product innovation and increase operational  productivity,  as well  as positioning itself closer to the consumer. Thus, Kalbe has placed   more focus on volume growth with very minimal  price increase. Nonetheless, with  healthy volume growth and production cost control along with strengthening Rupiah value, Kalbe managed to  increase its net  profit,” stated  Vidjongtius, Kalbe’s Finance Director and Corporate Secretary.  
 
Based on its Consolidated Financial Statements (Unaudited) for the period ending June 30, 2011, Kalbe booked net sales of Rp 4,949 Billion   or   an   increase of 5.1% compared to the first semester in 2010 of Rp 4,707 Billion.Given  that the Company’s packaging business was divested  in  August 2010,net sales of the  Packaging Division were no longer   consolidated in the first semester of  2011.Should net  sales  of  the Packaging  Division  be  excluded  from  net sales  in  the  first  semester  of  2010,  the Company  would  have  recorded  net  sales growth of 9.5%.

Gross profit recorded an increase of 8.2% to Rp 2,581 Billion in the first semester of 2011 compared  to Rp  2,384  Billion  in  the  same period  in 2010.  The  growth in  gross profit  is also  evident  from  the  expansion of  gross profit margin from 50.7% in the first semester of 2010 to 52.1% in the same period in 2011. This  could be  attributed  to  the Company’s efforts to consistently control production costs through  lean  manufacturing  program,  and supported by  the strengthening  of  Rupiah against foreign currencies. 

In the  first  semester of 2011, operating expenses  increased  by  10.1%  to Rp  1.702 Billion  compared  to the  same  period  in  the previous  year  of  Rp  1.546  Billion.As  a percentage of net sales, operating expenses increased from 32.8% in the first semester of 2010  to 34.4%  in  the same  period in  2011. The  ratio  of  selling  expenses to net sales increased  by 1.4%  from  26.4%  to 27.8%  in 2011.  Meanwhile, the ratio of general and administrative expenses  increased  by  0.1% from  5.6% to 5.7%  in  2011. The  ratio  of research  and  development  expenses  to net sales is stable at  0.8%  in  2011.  Selling expenses increased along the implementation of various marketing activities targeted to drive sales growth in the medium and long term.  

Income from operations increased by 4.8% to Rp  879  Billion  in  the  first  semester  of  2011 compared  to  Rp  838  Billion  for  the  same period  in  2010.  The  17.8%  ratio  of  income from  operations  to  net  sales  for  the  first semester  of  2011  was  stable    compared  to the same period in the previous year.

Performance of Each Division

Prescription    Pharmaceuticals    Division contributed 28.0% to total net sales, with net sales of Rp 1,387 Billion in the first semester of 2011, or growing by 10.4% from Rp 1,256 Billion  in  the  same  period  last  year.  Sales growth   of   pharmaceuticals   products   was largely driven by volume growth. To develop the   prescription   pharmaceuticals   product portfolio  and  to  meet  the  requirement  for additional   production   capacity,   Kalbe   has completed  the  new  production  facility  for generic  drugs  in  Cikarang  and  is  currently building  a  production  facility  for  oncology drugs as well.

During the first semester of 2011, Consumer Health  Division  contributed  18.8%  to  the Company’s total net sales. Consumer Health Division’s net sales were recorded at Rp 932 Billion  or  increasing  by  12.9%  from  Rp  826 Billion  in  the  same  period  in  2010.  New products  launched  have  exhibited  promising growth  and  are  expected  to  provide  positive
contribution to the overall performance of the Consumer Health Division. The Company will continue  to  apply  the  strategy  to  enhance product portfolio, from conventional over-the-counter products towards consumer oriented products.
 
Nutritionals Division has contributed 22.8% to Kalbe’s total net sales in the first semester of 2011, growing by 8.8% to Rp 1,130 Billion compared  to  Rp  1,039  Billion  for  the  same period   in   2010.   Nutritionals   Division   will continue  to  drive  growth  through  product portfolio  expansion  with  new  product  range targeted  to  the  middle  segments,  such  as LOVAMIL,    a    powder    milk    product    for expecting and lactating mothers.  

Distribution  of  Kalbe  products  is  conducted by PT Enseval Putera   Megatrading Tbk (“EPMT”), which commands the largest distribution     network in Indonesia for pharmaceuticals products. EPMT is majority- owned by the Company with a 91.75% stake, after the Company increased its ownership in September 2011 from 84.17% previously.

In the first semester of 2011, the Distribution and  Logistic  Division  contributed  of  30.3% to  Company  net  sales, which  were  recorded at  Rp  1,500  Billion,  declining  by  5.5%  from the  Rp  1,586  Billion  figure  for  the  same period in 2010. This was mainly the effect of the  divestment  of  PT  Kageo  Igar  Jaya  Tbk, the  packaging  arm  of  Kalbe,  in  July  2010. Excluding the sales of Packaging Division in 2010,  the  Distribution  and  Logistic  Division has booked 7.2% growth in the first semester of 2011.

By the end of the  first semester of 2011, Kalbe has generated strong cash flows, with solid cash position of Rp 2,356 Billion. This is the result    of the improvement in the Company’s net operating  cycle  to  125  days as  of  the  end  of  the  first semester of 2011, compared to 143 days at the end of the same period last year.In line with Kalbe’s commitment  to continuously  build  value and improve yield to its shareholders and supported by solid cash flow generation, the Company has increased dividend payment of
up tp 51% of 2010 net profit, or equivalent to Rp 656 Billion. This was an increase of more than  2.5  times of  dividend  paid on 2009  net profit of 25%, or equivalent to Rp 254 Billion.

Kalbe at a Glance
PT Kalbe Farma Tbk. (“Kalbe”) is one of the largest publicly-listed       pharmaceutical companies  in  Southeast  Asia.Kalbe  has  a broad and  strong portfolio of brands in prescription pharmaceuticals (Cefspan, Brainact, Broadced,etc),OTC pharmaceuticals (Woods,  Promag,  Mixagrip, Komix,  etc),energy  drinks  (Extra  Joss,  E-Juss)    and    nutritional    products    (Milna, Prenagen,  Diabetasol,  etc),  complemented with a robust  distribution arm covering much of  the  Indonesian  archipelago.  Since  1991, Kalbe’s shares have  been listed on the Indonesia Stock Exchange (IDX: KLBF).

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