Cheaper cotton to boost earning: PT Argo Pantes<\/p>\n
JAKARTA (JP): Publicly listed textile producer PT Argo Pantes
\nexpects its net profit to rise 84 percent to Rp 30 billion
\n(US$12.5 million), and sales 11 percent to Rp 500 billion this
\nyear.<\/p>\n
Argo's vice president director Supriadi said yesterday the
\nincrease would be possible because of an increase in the
\ncompany's production, and a drop in cotton prices.<\/p>\n
"We started operating our dyeing, finishing facility last
\nApril at our main factory in Tangerang, West Java," Supriadi said
\nafter the company's shareholders' annual and extraordinary
\nmeeting.<\/p>\n
The new facility was expected to raise the company's
\nproduction of dyed fabrics 30 percent from 42,416 tons a year,
\nand its dyed yarn fabrics to two million yards a month from one
\nmillion yards a month, he said.<\/p>\n
Supriadi said the drop in cotton prices last year would
\ncontribute much to the company's profit this year.<\/p>\n
"In 1995, the price of cotton rose by over 16 percent to about
\nUS$1.10 a pound. It is the highest increase in the price of
\ncotton in about 125 years," he said.<\/p>\n
The dramatic rise in cotton prices was caused by a short
\nsupply in 1995, he said.<\/p>\n
"But last year the price went back down to between U.S 80
\ncents and 85 cents a pound," he said.<\/p>\n
Argo's finance director, Wira Tjendana, said his company had
\nbooked a Rp 6.2 billion net profit, and Rp 106 billion in net
\nsales in the first quarter this year.<\/p>\n
Wira said Argo planned to issue about US$250 million in medium
\nterm notes through its finance subsidiary arm, Argo Pantes
\nFinance BV, to improve its capital structure this year.<\/p>\n
The company's $38 million floating rate notes issued in
\nFebruary was 52 percent oversubscribed, he said. The notes carry
\nan annual interest rate 1.6 percent above the London Interbank
\nOffered Rates.<\/p>\n
PT Argo Pantes expected to export 70 percent of its production
\nto about 40 countries this year, he said.<\/p>\n
It supplies well-known brands such as Arrow, Choya, Kenzo,
\nMarks and Spencer, Liz Claiborne, Van Heusen and Levi's.<\/p>\n
The company's net profit plunged last year to Rp 16.37
\nbillion, from Rp 27.57 in 1995, as a result of the cotton price
\nhike in 1995. Its sales dropped to Rp 449.97 last year, from Rp
\n475.86 in 1995.<\/p>\n
Supriadi said his company had invested about US$35 million in
\nnew machinery last year, which also caused a drop in its revenue.<\/p>\n
Shareholders at the meeting agreed to split the nominal price
\nof the firm's shares by half to Rp 500 from Rp 1,000.<\/p>\n
The split would double the company's shares, which are listed
\non the Jakarta Stock Exchange, to 264.70 million, Supriadi said.<\/p>\n
The shareholders also agreed to distribute Rp 6.61 billion in
\ndividends or Rp 50 a share. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cheaper-cotton-to-boost-earning-pt-argo-pantes-1447893297",
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