KFC Indonesia Managers Lose Big IDR 152 Billion, Here’s the Cause

Jakarta, CNBC Indonesia – High inflation has an impact on the performance of issuers, even those that manage well-known businesses. For example, the issuer that manages the fast food restaurant KFC Indonesia, PT Fast Food Indonesia Tbk. (FAST).

FAST recorded a net loss of IDR 152.41 billion in the third quarter of this year. This figure increased by 815.69% compared to the previous year at IDR 17.16 billion.

Citing information disclosure from the Indonesian Stock Exchange (BEI), until September 2023, FAST’s revenue will increase by 7.04% on an annual basis to IDR 4.61 trillion.

The increase in revenue was contributed by the food and beverage segment which rose 7.39% to IDR 4.6 trillion.

Meanwhile, cost of goods sold amounted to IDR 1.72 trillion or increased 6.38% annually. Thus, FAST still posted gross profit growth of 7.43% on an annual basis to IDR 2.89 trillion.

However, sales and distribution expenses increased from previously IDR 2.2 trillion to IDR 2.45 trillion. Then general and administrative expenses rose 19.96% on an annual basis to IDR 631.17 billion.

So this caused FAST to record an operating loss of IDR 146.62 billion in the third quarter of this year from previously recording a profit of IDR 20.48 billion.

Total assets amounted to IDR 3.77 trillion as of the third quarter or down 1.21% year-to-date (YtD). Meanwhile, liabilities increased 3.98% YtD to IDR 2.87 trillion, while equity reached IDR 904.88 billion or corrected 14.72% YtD.

Reasons why the issuer managing KFC Indonesia suffers huge losses

Management explained that there were several factors that caused the company’s operations to erode. Among other things, the price increase for several raw materials was due to inflation and additional material handling costs as a result of an increase in minimum wages and an increase in fuel prices.

“Not all increases in the price of the main raw material, namely chicken, can be covered by an increase in menu selling prices which will ultimately result in a decrease in transactions,” said management, Tuesday (21/11) this week.

Apart from that, there is tough competition with other well-known QSRs who are both taking advantage of the post-pandemic conditions.

The increase in the national minimum wage also cannot be covered by minimal menu price adjustments. Lastly, the increase in the exchange rate resulted in an increase in the price of imported raw materials.

(fab/fab)