Since the IPO in October 2014, PT Graha Layar Prima Tbk (BLTZ), the owner of Blitz Megaplex cinema network, has never experienced a penny of profit. What has caused the loss?
For 3 consecutive years BLTZ lost Rp12.22 billion, Rp31.75 billion, and Rp36.10 billion. The first quarterly report this year also showed a loss. The greater the losses although revenue grew more than 30% since 2014. These losses derived from general and administrative expenses, mainly salaries and rents, which amount to 70% in 2015 and similar to the previous years.
BLTZ_fundamental
Source: Financial Statements of the Company
Some aspects of operations resulting in losses are:
1. The cost of salaries and rents in the components of general and administrative expenses that are not proportional to the amount of income earned. Moreover, these components are fixed costs that would depress the company’s financial performance in difficult moments;
2. The burden of loans in 2016 increased significantly from the previous Rp 2 billion for the year as a Rp4.17 billion within 3 months;
3. Exchange rate differences are large enough that indicates the amount of exposure that is not managed properly against the currency.
More and more theaters opened by Blitz, the greater the losses that would be suffered by the company.
Add Comment