Sliding rupiah dents C&C gain<\/p>\n
SINGAPORE (Dow Jones): Cycle & Carriage Ltd.'s earnings were
\ndented by the sliding Indonesia rupiah, the Singapore car
\ndistributor said Tuesday.<\/p>\n
It reported net profit for the first half ended June 30 fell
\nsharply to S$19.3 million (US$11.1 million) from S$56 million in
\nthe same period last year. This was due to the unhedged U.S.-
\ndollar debt of PT Astra International, in which Cycle & Carriage
\nowns 31.1 percent.<\/p>\n
Cycle & Carriage said its share of Astra's debt comes up to
\nUS$92.4 million. If not for the Astra debt and S$1.6 million of
\nprovisions at its MCL Land Ltd. unit, Cycle & Carriage said it
\nwould have earned S$83 million.<\/p>\n
Cycle & Carriage acquired an initial 24.9 percent stake in
\nAstra for US$309.4 million in March as part of an international
\nconsortium that bought 41.1 percent in Astra from the Indonesian
\nBank Restructuring Agency. Later, Cycle & Carriage bought another
\n6.4 percent in Astra for US$70.9 million.<\/p>\n
Cycle & Carriage ventured into Indonesia after losing the
\nexclusive right to import and distribute Mercedes-Benz
\nautomobiles to Singapore in December. Those operations were
\nassumed by DaimlerChrysler AG, leaving Cycle & Carriage only a
\nretail role.<\/p>\n
The Astra deal had sparked hopes that Cycle & Carriage would
\novercome the loss of its Mercedes-Benz franchise to become a
\nmajor regional automotive player. But since the deal was
\nannounced, the U.S. dollar has gained 20 percent against the
\nrupiah.<\/p>\n
The rupiah closed at Rp 8,965 versus the U.S. dollar late
\nTuesday in Asia as a result of political uncertainty in
\nIndonesia, after a bomb blast in Jakarta earlier in the day
\nkilled three and ripped apart a car carrying the Philippine
\nambassador as it entered his official residence.<\/p>\n
Even so, Cycle & Carriage said Tuesday: \"Astra will enable
\nCycle & Carriage to focus on its core competency in the
\nautomotive sector and also diversify its earnings base through
\nAstra's non-automotive business.\"<\/p>\n
Astra produces Indonesia's best-selling Kijang multipurpose
\nvehicle under a joint venture with Toyota Motor Corp., and it has
\nsimilar deals with other foreign car manufacturers. It also has a
\nplantation unit, a heavy machinery distributor and a technology
\nconcern.<\/p>\n
\"Astra should continue to perform satisfactorily at the
\ntrading level,\" Cycle & Carriage said. \"It is hoped that
\npolitical stability (in Indonesia) will restrict any further
\ndecline in the rupiah and limit the consequent foreign exchange
\nlosses.\"<\/p>\n
Overall, Cycle & Carriage said, earnings from motor vehicle
\noperations jumped 164 percent to S$64.9 million, thanks in part
\nto a surge in sales in Singapore and Malaysia.<\/p>\n
Cycle & Carriage Bintang Bhd., the company's Malaysian unit,
\nMonday said first-half net profit rose to 40.54 million Malaysian
\nringgit from 37.56 million ringgit in the year-ago period.<\/p>\n
At its MCL Land property unit, net profit fell to S$9 million
\nin the first half ended June 30, from S$13.1 million on year,
\npartly due to a slowdown in the residential property market.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sliding-rupiah-dents-cc-gain-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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