MPMX Demonstrates Consistent Performance in 2017 with 16% Core Earnings Growth

 Key Highlights of FY2017 earnings result

Financial Summary 2017

(In Billions) FY17 FY16 % Growth YoY
Net Revenue 16,086 16,605 -3.1%
Gross Profit 1,835 1,785 2.8%
GP Margin 11.4% 10.7%  
Operating Expenses 1,126 1,150 -2.1%
Operating Profit 796 742 7.2%
Net Finance Cost -338 -231 46.4%
Share of Profit of Associates 24 5 413%
Total Extraordinary Items -19 12  
Core Earnings* 403 349 16%
NPATMI 384 361 6.6%
Net Margin 2.4% 2.2%  
(*Core Earnings is calculated as NPATMI excluding one-time and non-recurring profit and loss items)
PT Mitra Pinasthika Mustika Tbk (IDX Ticker: MPMX, the “Company”), Indonesia’s smart mobility company today announced a 16% growth in core earnings, and a 6.6% increase in NPATMI to Rp 384 billion, attributable to cost leadership initiatives and improved productivity throughout key member companies of the Group. At the same time, the Company has experienced slower than expected sales of 2W and 4W products which resulted in lower revenues. Group Revenue stood at Rp 16.1 trillion, down 3.1% for the financial year ended 31 December 2017.
Rudy Halim, Group Chief Executive Officer of MPM said: “2017 was both exciting and challenging for MPMX. Overall, the Group was resilient in delivering growth despite the headwind we were facing especially in the first half of 2017. We were consistent in our efforts to make sure that our key levers for operations including cost leadership, improved productivity and positive and growing operational cash flows were implemented in a discipline and sustainable manner. Looking ahead, we have embarked on new business models which we expect to both transforms our Group’s business and also expands it to a new level in the next 2-3 years timeframe. Finding a new ‘S-curve’ for the Group is a goal which we are excited about.”
Other highlight of 2017 included some corporate actions taken by the Company in order to unlock values in all fronts. The successful divestment of 20% stake of MPMFinance in April, refinance of the Bonds in September with Club Deal arranged through 8 banks, and interim dividend payment of Rp 105/share as a result of the EGMS approval in October.

Subsidiaries Performance

In two-wheeler distribution and retail business, MPMX through its subsidiary MPMulia, booked 843,368 of unit sales. The market share of the business continues to increase in 2017, despite the sale volume decreased by 7.5% during the same period. The decrease was mainly due to the unusually high amount of natural disasters in the region which affected the harvest and consumer sentiment as well as the increase of the vehicle registration fee in the first quarter which impacted the sale. The company’s revenue saw a decline of 3.2% to Rp 14.0 trillion compared to last year.
As for the four-wheeler distribution and retail business, 1,711 units of Nissan-Datsun cars were sold through its 5 dealers throughout Indonesia. This result represented a 64% decrease from last year, however, through cost saving and restructuring, the company was able to reduce profit loss to Rp 52 billion, a 51% saving from 2016.
In the After-market segment, MPMX’s subsidiary PT Federal Karyatama (MPMLubricants), the producer and distributor of Federal Oil and Federal Mobil lubricants, recorded the sales volume of 61,346 million liters of lubricants, or 3% lower than last year. Revenue increased by 0.4% and Net Profit was stable compared to same period in 2016. PT Federal Karyatama recently received awards as Best Company to work for in Asia from the HR Asia Awards 2017 while its Federal Oil product received Indonesia Best Brand Award (IBBA) from SWA magazine and the country’s leading research company MARS. In addition, MPMParts, the supplier and distributor of a range of parts and aftermarket services for two-wheel and four-wheel vehicles, has produced strong revenue growth of 14% from 2016.
For the Transportation segment, MPMRent’s fleet rental number declined by 9% to 12,843 units compared to last year, as the company undertook efficiency initiatives to increase asset productivity by reducing new vehicle purchases and disposing un-utilized vehicles. While the company is pleased to see the improvement of the operation fundamentally it decided to take a prudent approach to factor in a higher provision expense of the account receivable and inventories.
Meanwhile, MPMX’s Financial Services segment MPMFinance, experienced an increase in new bookings to Rp 5,113 Billion or up 27% compared to last year. The increase was driven by growth in new car loans, new motorcycle loans and finance lease. As JACCS now is the majority shareholder of MPMFinance, the company has less constraint on the funding leverage it requires to grow the business. MPMFinance recently won the 2nd place Infobank Award under the category “Total Asset between 5-10T.”
Outstanding result was delivered by MPMX’s insurance business, MPMInsurance. The company achieved a gross premium growth of 25% year-on-year to Rp 483 billion, by successfully maintained high retention of existing clients and grew the business. MPMInsurance was rewarded the 1st place by Infobank Award under the category “Gross Premium between 250-500B.”
Last but not least, the Company is pleased to see the progress of its digital transformation in 2017. RallyPoints, the customer engagement platform, and Bidbox, the first multi-brand 4W distribution platform in Indonesia, have seen significantly positive tractions from customers and merchants since launch and the Company plans to introduce more new businesses and services to the market in 2018.

About PT Mitra Pinasthika Mustika Tbk

MPM is a leading Indonesian company with a vision to positively impact lives through smart mobility and social integration. By collective power, we aim to deliver the most relevant products and services to the people in our ecosystems through innovation. Our businesses offer a broad spectrum of mobility solutions, from retailing and distributing motorcycles and cars, after-market parts and services, transportation and logistics services, and financial services. MPM is Indonesia’s mobility ecosystem and we will continue to create smarter mobility solutions to help Indonesia integrate better than ever before.
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