ILM announced its first half of the year 2020, generating total revenue over 4 billion baht with a gross profit margin of 44.1%, after focusing on the product mix strategy to cope with COVID-19, while consumer behavior is getting more in favor of house decoration. The second half of the year tends to recover as economic activities are getting restored. The Company will continue focusing on costs controlling and inventory reduction for profitability enhancement.
Miss Kridchanok Patamasatayasonthi, Managing Director of Index Living Mall Public Company Limited (ILM), Thailand’s leading integrated retailer of furniture and home furnishing products, revealed the overall performance of the first half of 2020 that the Company had total revenue of 4,080 million baht, a decrease of 16.3% compared to the same period last year. In Q2/2020, the Company generated total revenue of 1,853 million baht, a decrease of 23.6% compared to the same period last year due to the store closure for almost 2 months during 22 March - 16 May 2020 following the country lockdown measures to control the spread of COVID-19 which resulted in the slowdown of domestic economic activities.
However, the Company managed to maintain a high level of gross profit margin in the first half of 2020 at 44.1%, increasing from 44.0% in the same period last year, since the Company has focused on the product mix strategy to increase the proportion of products with higher sales and profit margins. Meanwhile, there is more market demand for home office furniture, home decoration as well as storage and home organization products, as the outbreak of COVID-19 has promoted work from home. In addition, consumer behavior tends to go toward home decoration.
Meanwhile, the Company has continued to control costs and expenses. In the first half of the year, selling, general and administrative expenses (SG&A) stood at 1,515 million baht, a decrease of 15.0% over the same period last year, while SG&A in Q2/2020 decreased by approximately 20% to around 707 million baht. Net profit in the first half of the year was 132.7 million baht, with 14.5 million baht in Q2/2020. The Company managed to generate profit in Q2/2020 despite the store closure for almost 2 months, supported by the remarkable performance of online sales and housing projects sales with outstanding growth 375.1% and 69.4% YoY, respectively.
Miss Kridchanok further clarified that the Company had confidence in the overall performance of the second half of the year 2020 to improve from the first half of the year, following the gradual recovery of economic activities after the government has been easing the measures to control the spread of COVID-19 and launching various measures to stimulate the economy. The Company will also add more product categories, launch new collections, expand collaboration with partners, along with the extended plans continuing to reduce the SG&A and inventory.
"This year is quite a difficult year for everyone. Although many parties consider that the Thai economy should recover in the second half of the year following the economic activities that will gradually improve, yet the negative risk factors are still highly uncertain. Therefore, the Company will prioritize prudent business operations to enhance profitability continuously." said Miss Kridchanok.