Jakarta. Indofood Sukses Makmur, the world's largest maker of instant noodles, reported a $94 million net income in this year's first quarter, up 4 percent from the same period last year, giving the company solid footing to survive the coronavirus crisis for the rest of the year.
Indofood's net income rose to Rp 1.4 trillion ($94 million) in the first quarter from Rp 1.35 trillion in the same period last year.
From January to March, sales were up 1 percent to Rp 19.3 trillion from Rp 19.2 trillion last year.
The company also managed to increase its profit margin to 7.3 percent from 7 percent.
Anthoni Salim, Indofood's president director and chief executive, said the company showed notable operational improvement in the period.
Indofood's operating profit rose 33 percent to Rp 3.43 trillion from Rp 2.58 trillion last year and its operating profit margins increased to 17.8 percent from 13.4 percent.
"Amid today's challenging global conditions, Indofood managed to maintain good performance in the first quarter of 2020. In the future, we will remain vigilant and continue to improve our competitiveness," Anthoni said in a statement on Friday.
Mimi Halimin, an equity analyst at Mirae Asset Sekuritas, said he expected Indofood to continue growing amid an economy crippled by Covid-19 this year.
"We expect Indofood CBP to contribute 76 percent of Indofood's total financial performance this year," Mimi said, referring to the company's noodle, snacks and beverage maker subsidiary.
Growing sales of Indofood's premium instant noodle varieties contributed greatly to the growth of the company's financial performance.
Premium instant noodles offer a greater profit margin compared to the regular varieties.
Meanwhile, declining palm oil prices might eat into the company's profit and cause its palm oil division to struggle this year, Mimi said.
As a consumer goods company, Indofood's shares are considered as a "defensive" stock that investors prefer during economic slumps or recessions.
Mirae Asset Sekurtas has maintained its buying recommendation for Indofood shares with a target price of Rp 9,500 (65 cents) per share – 48 percent higher than its latest closing price of Rp 6,425.