Indofood posts 46% drop in profit
Indofood posts 46% drop in profit
The Jakarta Post, Jakarta
PT Indofood Sukses Makmur, the country's largest instant noodle
maker, suffered a 46 percent decline in net profit during the
first semester, compared to the same period last year, despite a
surge in net sales.
The publicly listed company's net sales grew by 6.5 percent to
Rp 8.4 trillion (US$1.01 billion) during the period from Rp 7.9
trillion, but failed to push the net profit up, which stood only
at Rp 308.9 billion, much less than the profit of Rp 571.1
billion booked in the earlier year period, a press statement said
on Thursday.
Indofood attributed the profit decline to lower foreign
exchange gains -- down from Rp 314.7 billion during the same
period last year to Rp 71.2 billion -- due mostly to the rapid
appreciation of the rupiah against the U.S. dollar.
The statement said that the average exchange rate during the
six-month period ended on June 30 this year was Rp 8,678 per
dollar, compared to 8,940 at the end of last year, and the
previous year's first semester average of 9,499.
The company also attributed the profit drop to an increase in
interest expenses, which rose to Rp 486.24 billion from Rp 330.15
billion during the same period last year as a result of total
large debt positions.
As of March 31, Indofood's debt stood at $412 million and Rp
4.3 trillion.
The company's export revenue totaled $180 million, which
represented around 19 percent of its consolidated net sales, a
growth of 58 percent over the same period in 2002 at $114
million.
Despite the drop, Indofood CEO Eva Riyanti Hutapea remained
upbeat on the company's business prospects.
"Going forward, besides intensifying efforts to strengthen its
position in the traditional market, the company will continue to
'segmentize' the market, and to create and develop higher-end
margin products in responding to customers' needs in that
segment," she said in a statement.
The price of Indofood shares, however, remained unchanged at
Rp 750 amid overall weak market sentiment.