Demand for Sanitizers Helps Indonesian Company Outperform Peers

(Bloomberg) -- Relatively robust demand for essential chemicals and diesel fuel from industrial customers helped Indonesian distribution and logistic company PT AKR Corporindo ride out the coronavirus slump that hit most companies.

The firm is confident of meeting its full-year guidance for a 12% to 15% growth in sales volume and profit, which it made before the pandemic started, Suresh Vembu, director and head of business development, said in an interview. Jakarta-based AKR reported last week a 10% year-on-year increase in its first half net income and a 3% rise in revenue.

“Looking at the way we have performed, we should be in a position to maintain this momentum in the second half,” Vembu said in the interview Wednesday.

AKR’s performance contrasts with warning from many Indonesian companies to brace for another quarter of missed earnings, with the impact of the coronavirus potentially resulting in a 25% to 75% drop in first half profit and revenue. The outbreak has rendered millions of people jobless and may send Southeast Asia’s biggest economy into its first recession since the financial crisis in the late 1990s.

Demand for essential chemicals from its customers, which have been used as raw material for soap, detergent, sanitizers or biofuel producers, remained strong even during the lockdown period in most of the second quarter, Vembu said.

AKR shares gained as much as 2.8% on Thursday to its highest in about five months. The shares have rallied 14% this month, trimming their year-to-date drop to 27%. That compares with a 19% decline in the Jakarta Composite Index this year. AKR is valued at 13 times its projected earnings next year, below its five-year average of 18 times, according to data compiled by Bloomberg.

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