By Yi Wei Wong

Unilever Indonesia's shares declined in early Asian trade Friday after it reported weak fourth-quarter earnings and disappointing profit margins.

The Indonesia-listed fast moving consumer good producer's shares fell as much as 6.9% to 4,580 Indonesian rupiah, a day after it reported earnings. They were last 6.7% lower at IDR4,590.

Unilever Indonesia reported Thursday that its fourth-quarter net profit fell 45% on year to IDR753 billion ($49.7 million) and that its profit margins fell to an all-time low during the period.

The results likely disappointed investors, leading to a negative share price reaction, said Citi analyst Lakshmi Rowter in a note.

"We think the market was already ready to turn bullish on Unilever Indonesia given its exposure to mass-market consumption which should see recovery this year, but we think share price decline is inevitable with consensus significantly cutting forecasts," she added.

However, she noted that the earnings were within Citi's expectations.

Citi lowered its 2023-2024 earnings-per-share estimates by 8.0% to factor in the company's weak profit margins and cut its target price IDR4,750 from IDR4,900.

The U.S. investment bank maintained a neutral rating on the shares.

Write to Yi Wei Wong at

(END) Dow Jones Newswires

02-09-23 2223ET