Matahari Stakeholders Update
- Matahari announces temporary closure of all stores nationwide for 14 days or more if required as a health measure for our employees and to support national containment measures
- Withdrawing any issuance of dividend in relation to financial year 2019
- Reducing all non-essential operating expenses including rental concessions, marketing, travel plus all other cost lines and eliminating all non-committed capital expenditure this year
- Reduction in labor and manpower expenses with the deepest cuts taken by senior management
- Postponing all 4 new store openings
- Withdrawing all 2020 sales or earnings guidance due to ongoing uncertainty
PT Matahari Department Store Tbk (“Matahari” or “the Company”; stock code: “LPPF”) today announced several prudent measures to position the company to best navigate the continued spread and impact of COVID-19.
Temporary Closure of All Stores Nationwide
Matahari has communicated to all of its employees nationwide that as a voluntary measure to protect the health of its employees that all of its stores nationwide will be temporarily closed for a period of at least 14 days commencing from Monday 30th March 2020 until Monday 13th April 2020 or later, depending on the progress of containing the COVID-19 spread. The Company believes in playing its part in national containment measures and is supportive of government actions to manage the spread of COVID-19.
Matahari.com will continue to operate as normal and is ramping up its capabilities to serve an increased demand for this channel.
Suspension of Cash Dividend
Due to the uncertainty brought upon by the COVID-19 pandemic, the Management and the Board of Matahari believe in applying a highly prudent approach to the management and use of cash resources in anticipation of the length of time the downward pressures on consumer demand and traffic may continue. For this reason, Management is withdrawing its previous recommendation of a dividend payout and proposes suspending any payment of dividend at the upcoming Annual General Meeting of Shareholders.
Additionally, the Company is reviewing all non-essential operating expenses in order to drastically reduce spending including working with landlords for significant rental concessions, curtailing all marketing spending for the medium term, implementing a companywide business travel ban, and reducing labor expenses through a combination of reduced working hours, implementing unpaid leave as well as staff and management salary cuts, with senior leaders taking the deepest reductions. Additionally, all non-committed capital expenditure will be eliminated and the four new committed store openings will be deferred to later in the year.
“The retail environment has deteriorated sharply during March and whilst January and February met our expectations, we are now operating in a very uncertain environment where the health of our staff and the conservation of our cash resources are our paramount priority in order to emerge from this COVID-19 pandemic period in good corporate health and positioned for a brighter future“, commented Terry O’Connor, CEO of Matahari. ”We are navigating this challenging period respectfully and in a considered manner and our senior team is fully dedicated to respond rapidly to this situation as it changes. We remain ready to take further actions to ensure Matahari emerges from this crisis ready to serve our Indonesian customers better than ever and to welcome back our colleagues into our stores and office facilities”.
2020 Earnings Guidance & Further Stakeholder Updates
Matahari has a standard policy of not issuing forward guidance and this is ever more relevant with such an uncertain outlook. Thus, stakeholder engagement will be through broad and detailed releases such as this for the foreseeable future as all available senior management time is required to address the navigation of the COVID-19 pandemic. As such, the Company will not be spending time individually with investors during this period.