Multipolar Pays dividend at Only Rp 10 per Share

Multipolar’s Tbk (MLPL) net profit was up 2,450 percent to Rp 2.8 trillion in 2010 compared to Rp 111 billion in 2009. Although its net income increased significantly, Multipolar paid a total dividend of Rp 77.28 billion, or Rp 10 per share, some 2.73 percent of the net profit.

The dividend amount was decided in the General Meeting of Shareholders on Monday. The resolution was different from the prospectus issued on February 8, 2010, where the company announced that it will distribute dividends at 15-25 percent if net profit surpasses Rp 100 billion and 10 -15 percent if net profit is up to Rp 100 billion.

"The amount in the prospectus is a proposal from the Board of Directors to shareholders for approval or refusal, but it all depends on the financial position. We also have plans to invest," said Harijono Suwarno, Managing Director of Multipolar.

Harijono did not rebut that the company is currently in control of a considerable amount of cash from the sale of Matahari Department Store last year. However, revenue from Matahari Putra Prima Tbk (MPPA) was no longer available for consolidation since April 2010 which decreased the company’s revenue from Matahari. Currently, Multipolar controls 20 percent stake in Matahari Putra.

Most of the remaining net income will be used by Multipolar to expand in 2011, including constructing 17 Hypermart outlets and six to seven Robbin's Department Store outlets in China with a total investment of US$ 60 75 million. For its store in China, Multipolar targets US$ 18 million in annual sales per store.

IFT’s Research Department said that Rp 10 per share dividend is actually sufficient for investors, as in 2008 Multipolar did not pay dividends due to net loss, and in 2009 the company only paid Rp 2.15 per share in dividends. Allocation of US$ 60 -75 million from net profit for outlet investment is a positive resolution, as expansion by using internal funds must be supported by larger retained earnings.

Food Business Focus

Multipolar subsidiary, Matahari Putra Prima, will focus on the food business, and expand several business units in the sector, particularly Hypermart.

Benjamin Mailool, President Director of Matahari Putra, said that the company will budget Rp 1 trillion in capital expenditures for the Matahari Food Business expansion. Besides the 17 Hypermarts, the fund is for the development of Foodmart and Boston, its other food businesses.

Matahari Food Business revenue in 2010 was Rp 7.6 trillion, which contributed 90 percent of Matahari Putra’s revenue. "Hypermart has the widest network compared to other competitors. Some 37 percent of our outlets are outside of Java," said Danny Kojongian, Director for Investor Relations and Communications for Matahari Putra.

In 2010, Matahari constructed 53 Hypermarts, 25 Foodmarts and 54 Bostons, drugs and vitamin retailers. "Foodmart contributed nine percent to Matahari Food Business revenue, while Boston contributed one percent," said Danny.

In 2011, Matahari Putra will divest its non-food business, including 19 Times bookstores and 106 TimeZone outlets. In 2010, the divisions recorded Rp 428 billion in revenue. "Non-food division assets are around Rp 3 trillion," said Hendra Siddin, Finance Director of Matahari. Hendra did not name the investor who is interested in the assets.

Rosmiyati Dewi Kandi, Yohan Rubiyantoro, Grace Putri Sejati