UNVR – FY23 earnings came in below expectation

UNVR – FY23 earnings came in below expectation Unilever Indonesia (UNVR) reported its FY23 results with revenue sharply drop. Gross profit growth came in at flat figure backed by continuing low cost input. Opex rose by 7.7% yoy. PATMI sharply declined by 10.5% yoy and tanked 18.7% yoy, or 57.2% qoq, on a quarterly basis due to scrawny top line growth. Margin from top to bottom suffered mainly driven by the unfortunate revenue growth. (Source : Company) Comment : The poor FY23 earnings growth was mainly driven by the negative impact of the boycott on several UNVR brands. In all, FY23 PATMI only reached 85.4%/85.5% of ours and street ‘23F for UNVR, or far below expectation. Despite the explanation that UNVR Indonesia does not have anything to do with geopolitical tension, we still think that weakening demand in the latest two months of 2023 should be taken seriously. As such, we believe that 1Q24 is likely to continue to be weak.