Indonesia’s Ramayana Gets Ramadan Boost After First Quarter Loss

  • Department-store operator targets 7% full-year sales growth
  • Retailer’s shares jumped 21% in two weeks through Monday

PT Ramayana Lestari Sentosa is seeing a pickup in activity before the Muslim fasting month of Ramadan, putting the Indonesian retailer on track to achieve full-year sales growth of as much as 7 percent, according to a director of its parent company.

“Things have been getting busier in the past month,” Setyadi Surya, a director at Ramayana Group, said at an interview in his office in the Tanah Abang market district in central Jakarta. “You can see the traffic around this area is getting more crowded. Ramadan is an important season for most Indonesians. They will put all their resources into this one event.”

Southeast Asia’s largest economy grew 4.92 percent in the first quarter from a year earlier, missing estimates and slowing from 5.04 percent in the previous three months. There’s typically a pickup in consumer spending before and during Ramadan and the holiday period afterward, when many Indonesians return to their home villages. The fasting month, when Muslims refrain from eating and drinking between dawn and dusk, is set to start in the second week of June this year.

Ramayana Lestari, which operates the Ramayana, Robinson and Cahaya department-store chains that cater to lower-income Indonesians, reported an operating loss of 21.5 billion rupiah ($1.6 million) in the first quarter, compared with a shortfall of 24.1 billion in the year-earlier period.

Revenue rose 15 percent in April from a year earlier and the company is on track to beat its target for 19 percent expansion in May, Surya said. Gross revenue before consignments for 2016 is expected to increase by 6.7 to 7 percent to 8.3 trillion rupiah, compared with a 2 percent decline in 2015, he said. Ramayana Lestari’s share price has rallied 21 percent in the two weeks through Monday. It’s up 13 percent over the past year, beating a 7.3 percent drop in the Jakarta Composite Index.

“Some of our stores can enjoy sales of up to four times the regular volume during Ramadan,” said Surya. “People in the lower income group, who only buy clothes once a year maybe, can buy as many as five new items during that period. We get a bigger boost than upscale retailers during this period.”

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