Astra sees profit if rupiah stays below 9,500 to dollar
Astra sees profit if rupiah stays below 9,500 to dollar
JAKARTA (JP): Publicly listed auto manufacturer PT Astra
International said it was hoping to end the year in profit,
despite a first half net loss of Rp 993.1 billion (about US$103
million), providing the rupiah strengthened to below Rp 9,500 to
the dollar.
Astra corporate secretary Aminuddin said on Wednesday the
company was expecting a turn around in this year's second half on
the back of a stronger rupiah.
"Although we've pegged our car prices at 9,000, with the
rupiah at below 9,500 we can still realize profits," he told The
Jakarta Post.
Aminuddin said the company had booked a net profit of Rp 1.5
trillion in 1999, when the rupiah averaged 6,900 throughout the
year.
According to him, the company's main woes stem from the weak
rupiah, which offsets any gains Astra makes on higher car sales.
In the first six months, Astra's net loss surged to Rp 993.1
billion compared to Rp 702.5 billion in the first half of 2000.
In the same period, however, sales rose to Rp 14.5 trillion as
against Rp 12.86 trillion.
Foreign exchange losses are also due to the company's huge
dollar denominated debts. Astra made huge debt installments
earlier this year when the rupiah was already edging toward
10,000 to the dollar.
The next installment, however, is not due until December 2002.
By then, the company will have to pay 25 percent of its combined
loans and bonds worth $695 million and Rp 819.26 billion.
Astra has earlier said it was considering hedging up to 20
percent of its $800 million in debts.
The rupiah on Wednesday trading weakened to 9,600 down from
9,525.
Currency analysts said improved political stability allowing
economic reforms to progress could keep the rupiah from falling
back into the 10,000 territory.
Astra was also planning to sell off its palm plantation unit,
the publicly listed PT Astra Agro Lestari, to help finance its
debt payments, Aminuddin continued.
One of the buyers strongly rumored to purchase Agro Lestari is
the country's giant noodle producer PT Indofood Sukses Makmur.
"We're negotiating, but it's still very informal," Aminuddin
said.
Indofood said earlier it was eyeing Agro Lestari, following
setbacks in its initial plan to purchase the Singapore listed
Golden Agri Resources of the Sinar Mas Group.
The plan could ran aground on Golden Agri's tardiness in
conducting a due diligence. Indofood has set August 10 as the
deadline for the due diligence.
Aminuddin said Astra would sell to Indofood should the latter
offer the right price and has potential to become the right
partner for Agro Lestari.
However, he added, Indofood was not the only party that had
approached Astra and expressed interest in buying Agro Lestari.
"We've been approached by several parties, though I can't say
whether they're local or foreign," he said.
Local media reported that Astra's majority shareholder, the
Singapore-based Cycle & Carriage, had set a price of 2,500 a
share for Agro Lestari.
"We don't know how they got that price. We need to see details
to know whether the price is fair ... we need to do a really
detailed due diligence," Indofood's deputy chief executive
officer Cesar De La Cruz was quoted as saying by Bloomberg.
He said the company was also considering other plantations as
alternatives should Golden Agri miss its Aug. 10 deadline.
"London Sumatra, in terms of the plantation itself, is one of
the best in the country," he said.
But like Golden Agri, London Sumatra is saddled with $254
million in debts for which it had yet to seek a restructuring
deal.
"We are aware of London Sumatra's problem, and understand that
every plantation company has their individual problem," De La
Cruz said.(bkm)