DGS poised to perform well despite crisis<\/p>\n
JAKARTA (JP): Indonesia's only locally listed fishing company,
\nPT Daya Guna Samudera (DGS), will perform well despite the
\nmonetary crisis due to its strong export earnings, a joint
\nventure security company has reported.<\/p>\n
ABN AMRO Hoare Govett Indonesia said yesterday that it was
\noptimistic DGS's net profit would increase to Rp 423 billion
\n(US$42.3 million) this year and about Rp 448 billion next year
\nfrom last year's estimated net profit of Rp 164 billion.<\/p>\n
DGS's turnover was projected to reach Rp 1.81 trillion in 1998
\nand Rp 1.91 trillion next year, up from last year's estimated
\nturnover of Rp 655.63 billion, ABN AMRO said.<\/p>\n
"The company is a safe haven in the country's economic
\nturmoil," the securities company said.<\/p>\n
ABN AMRO pointed out that DGS, which exports 98 percent of its
\nproducts, had benefited from the rupiah's sharp depreciation
\nagainst the U.S. dollar.<\/p>\n
The rupiah closed yesterday at around Rp 10,600 against the
\nAmerican dollar, a drop of about 75 percent from its pre-crisis
\nrate of 2,450 last July.<\/p>\n
ABN AMRO also forecast the company's rapid fleet expansion
\nwould translate into impressive earning growth in the coming
\nyears.<\/p>\n
The securities company predicts DGS's gross margin will remain
\nhealthy at above 55 percent from 1997 to 1999 while the operating
\nmargins should be around 45 percent during the same period.<\/p>\n
DGS, which reported a cash position of $70 million in December
\n1997, would benefit from the rise in the weighted-average price
\nof the company's products in overseas markets, ABN AMRO said.<\/p>\n
The weighted-average price was around $1.22 per kilogram in
\nthe first nine months of 1997, the securities company said.<\/p>\n
"The average price rise to $1.60 per kilogram in November and
\nDecember," it said, adding that the average full-year price would
\nincrease to $1.34 per kilogram.<\/p>\n
The price rise was mainly attributed to escalating demand from
\nits main export market Hong Kong and China which was the hardest
\nhit by bird flu.<\/p>\n
"The bird flu outbreak in Hong Kong has shifted consumption in
\nHong Kong and China from poultry to seafood," the securities
\ncompany said.<\/p>\n
The economic crisis which has hit Thailand should not affect
\nDGS's performance as the company does not sell directly to
\nThailand consumers, ABN AMRO said.<\/p>\n
The fishing company exports fish products through distributors
\nwhich in turn sell them again to several Thai processing
\ncompanies. These companies export the finished goods to the U.S.
\nand Europe, ABN AMRO said.<\/p>\n
"Thailand's economic turbulence should not have a significant
\nimpact on DGS's revenue because the revenue of both Thai
\ndistributors and the processing companies are denominated in
\nAmerican dollars,' the company said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/dgs-poised-to-perform-well-despite-crisis-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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