Bakrie plantation sees profit on stronger rupiah

JAKARTA (JP): Publicly listed rubber and palm oil plantation firm PT Bakrie Sumatra Plantations predicted a return to profit this year, on expectations the rupiah would average Rp 9,500 to the U.S dollar this year.

Bakrie Sumatra president Ambono Janurianto said on Tuesday the company targeted a net profit of Rp 12.59 billion (about US$1.3 million) this year, up from Rp 193.65 billion in net loss last year.

In the first semester, Bakrie Sumatra recorded a net loss of Rp 124.26 billion, mainly due to foreign exchange losses.

"We expect an average rupiah rate similar to the one in 1999 which was about Rp 9,500 to the dollar," Ambono told reporters following the company's presentation to public investors.

Foreign debt repayment, as the rupiah weakened to around Rp 10,000 against the dollar, resulted in Bakrie Sumatra's poor first half results, he said.

The rupiah has since recovered over improved political stability after the new government was elected in late July.

Keeping a healthy profit margin amid low commodity prices, Ambono continued, would further assist the company's turnaround in the second half of this year.

"We pay attention to our cost structure and try to keep the (cost) level low," he said.

Ambono said a higher output on both rubber and oil palm's fresh fruit bunch would help the company boost sales.

Rubber output is expected to grow to 24,209 tons from 19,839 tons the year before, he said.

Production of fresh fruit bunch is expected to increase to 369,954 tons compared to 318,087 tons last year.

Meanwhile, spokesman for the Bakrie Group Lalu Mara Satriawangsa confirmed local media reports over the group's plan to purchase an 80 percent stake in coal mining firm PT Arutmin Indonesia.

Bakrie Brothers owns the other 20 percent stake, while the 80 percent stake for sale is held by Australian based BHP Billiton.

Under its contract, BHP must offer 31 percent of its stake to a local investor this year.

Mara said that last year, BHP had already agreed to sell its stake to Bakrie, which at that time was the only investor to respond to BHP's offer.

He said Bakrie planned to acquire Arutmin's shares through its unit, PT Bumi Resources, a hotel chain operator turned oil company.

The choice fell on Bumi, as the firm is not a unit of the heavily indebted Bakrie Brothers, Mara explained.

"We will find the funding ... Bakrie's name still sells," he said.(bkm)