For the sake of Survive! This Row of Issuers Opens New Business, Kopi-APD

Jakarta, CNBC Indonesia – The Covid-19 pandemic that has made financial performance ‘sluggish’ has forced many companies to rack their brains to stay afloat, including adding business lines or even ‘switching the wheel’ by focusing on businesses that are far different from the initial core business.

Below, the CNBC Indonesia Research Team tries to summarize several issuers that have diversified and changed their business to respond to the impact of pagebluk on the company’s fundamental performance.

1. PT Hero Supermarket Tbk (HERO)

After closing all of Giant’s retail outlets starting this July, the listed retailer Hero Supermarket has begun to expand into the furniture business.

The Company together with PT Rumah Mebel Nusantara (Rumah), a company whose shares are 99.99% owned by the company, established a new subsidiary engaged in the furniture business under the name PT Distribution Mebel Nusantara (PT DMN). Later, PT DMN will carry out business activities in the field of wholesale trade.

PT DMN was established with an authorized capital of Rp 11 billion which is divided into 1,100,000 shares. From this capital, HERO owns 1 share with a nominal value of Rp 10,000.

“The house made a full deposit of 1,099,999 shares or Rp 10,999,990,000 billion,” said HERO’s GM Corporate Secretary & Legal Strategy, Iwan Nurdiansyah, in his explanation to the Indonesia Stock Exchange (IDX), quoted Wednesday (14/7/2021) .

Iwan explained that the establishment of this subsidiary would not have a negative impact on HERO’s operational, legal, financial conditions and business continuity.

As is known, previously Hero Supermarket began to close all Giant outlets throughout Indonesia in July 2021. The company will convert up to five Giant outlets into IKEA as a strategic step for the company.

HERO’s management is considering converting a number of Giant outlets to Hero Supermarket outlets.

2. PT Globe Kita Terang Tbk (formerly PT Global Teleshop Tbk/GLOB)

The Corona virus attack has also made the financial performance of a subsidiary of PT Trikomsel Oke Tbk (TRIO) cellular phone retailer, GLOB, even worse.

In fact, to continue to survive, GLOB has finally diversified its business and products, starting from selling computer equipment to lifestyle businesses such as selling sneakers, coffee machines and equipment, herbal drinks and buying and selling used bags of well-known brands.

This was done after the management of the offline store was handed over to a sister company aka another subsidiary of TRIO, PT Distribution in the first half of 2020.

GLOB’s revenue last year fell 87.14% to Rp 30.67 billion. The net loss was recorded to be deeper, to Rp 50.61 billion, from Rp 39.73 billion at the end of 2019.

In more detail, the mainstay revenue from the starter pack & top-up voucher and cellular phone segments fell drastically. In 2019, sales of starter packs amounted to Rp 107.35 billion, but by the end of 2020 it had fallen to Rp 16.97 billion.

Cellular phone sales also plunged to Rp 4.04 billion, from the previous year’s Rp 128.94 billion. The sales of computers and notebooks were nil throughout 2020.

But there is something interesting, last year there was revenue from sales of coffee machines and equipment worth Rp. 9.38 billion and sales of coffee beans of Rp. 167.35 million. Previously, this income was not in the financial statements.

Meanwhile, during the first quarter of 2021, GLOB was only able to earn revenue of Rp. 8.84 billion, down 43% from the same period the previous year. Meanwhile, sales of coffee machines and equipment contributed 57 percent of the company’s total revenue or Rp 5 billion.

In the 3 months of this year, there was still a net loss of Rp 828.21 million from the initial net profit of Rp 888.64 million in the same quarter the previous year.

Regarding this year’s business strategy, GLOB will continue to focus on increasing sales of mobile phones and accessories online, especially in the marketplace, in addition to offline sales.

In addition, this year GLOB will also continue to boost sales in the lifestyle business and in the field of computer equipment repair services, telecommunications and the like.

On July 2, the management of GLOB announced the change of company name from PT Global Teleshop Tbk (GLOB) to PT Globe Kita Terang Tbk.

It was not explained specifically the reason for the change of company name which decided to remove ‘Teleshop’ from the company name.

NEXT: There is a Trio of Textile Issuers

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