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‘Index Living Mall’ announces net profit of 118 MB in Q1/2020 COVID-19 drives ‘New Normal’ boosting online sales growth of 150%

Index Living Mall Public Company Limited (ILM) announced its Q1/2020 net profit of 118 million baht, a 10-percent drop from the same period of the previous year. Gross profit margin significantly improved due to the change in product mix, while COVID-19 which has altered the behavior of consumers towards the “New Normal” drove the online business growth in the first quarter by 150 percent. The Company targeted to propose a dividend of 0.46 baht to the Annual General Meeting of the Shareholders on 1 July 2020.

Miss Kridchanok Patamasatayasonthi, Managing Director of Index Living Mall Public Company Limited (ILM), Thailand’s leading integrated retailer of home furnishings, revealed that the overall performance in Q1/2020 showed an operating revenue of 2,211 million baht and a net profit of 118 million baht – a reduction from the same period of the previous year due to the temporary closure of most Index Living Mall stores since 22 March 2020, following the order of the governors of Bangkok Metropolitan and other provinces in the attempt to thwart the spread of COVID-19.

However, as many businesses have implemented the “work from home” (WFH) measure to support social distancing, this has become the major factor influencing the change in the consumers’ behavior regarding their shopping practices. More consumers have chosen to shop online for furniture, particularly in the Home Office and Home Decoration category. The Company also has extended its cooperation with the market places, such as Lazada, Shopee, and JD Central, along with special promotions and free delivery nationwide to help alleviate consumers’ expenses. This has resulted in the 150-percent growth of online sales in the first quarter of 2020 compared to the same period of the previous year. The Company is also confident that online sales channels will continue to grow well into the future. Meanwhile, the gross profit margin remarkably rose to 45.9 percent – an increase from 43.8 percent during the same period of the previous year, as a result of the change in product mix. In addition, the Company will still avail of the tax privileges of 70 million baht from the investment in new machinery that is yet to be utilized.

On 14 May 2020, the Company’s Board of Directors’ meeting approved the dividend payment of 0.46 baht per share and will seek approval from the Annual General Meeting of the Shareholders on 1 July 2020. The record date for the list of eligible shareholders is set on 29 May 2020, and the dividend payment will be made on 17 July 2020.

Meanwhile, the trend for Q2/2020 is likely to improve, following the continuous drop in the number of COVID-19 cases. The Company expects that more stores will gradually reopen after the government eased the lockdown measures since the beginning of May. The product range for online channels will be extended, while the housing project sales still retain their continuous growth, as the real estate developers are accelerating the construction to deliver the housing units to their customers in time as agreed. Additionally, the Company will do more renovation/ minor stores upgrade to increase sales area for higher sales and better margin products, instead of opening new stores which will be deferred for this year. The renovation of existing stores will require just minimal cash outlay but will increase sales effectively. The Company has already renovated three Index Living Mall stores that have been well received. Furthermore, the Company retains the plan to launch franchise stores abroad continuously this year, such as those in Vietnam and Myanmar.

The Company has drawn up a comprehensive plan to cope with the COVID-19 pandemic situation, such as cost reduction, deferment of expenses and major investments to maintain liquidity, a plan to respond to changing consumer behaviors as well as the preparations for the stringent safety measures for customers and employees, following the government’s gradual easing on the measures to prevent the spread of COVID-19, as the situation has been improving and led to the reopening of more stores since the beginning of May. The Company is confident in its ability to weather this crisis as with every other crisis in the past and will return to business strongly and sustainably as usual.