Indofood profit falls 37% on weaker rupiah

Indofood profit falls 37% on weaker rupiah

Bloomberg, Jakarta

PT Indofood Sukses Makmur, the world's biggest maker of
instant noodles, said profit fell 37 percent in the first nine
months this year, as a drop in the rupiah made it more expensive
to pay foreign-currency debt and import wheat.

Unaudited net income fell to Rp 284.6 billion (US$31 million),
or 33 rupiah a share, in the nine months ended Sept. 30, from Rp
453.5 billion, or Rp 53 a share, in the same period last year,
the company said in a statement. Sales rose 0.9 percent to 13.1
trillion rupiah in the period.

The weaker rupiah against the dollar increased the local
currency needed to pay more than $380 million of foreign-currency
debt. The rupiah fell 8 percent in the nine month-period,
compared with a 6.6 percent rise in the same period last year.
About 60 percent of Indofood's costs are linked to the dollar,
making it sensitive to the currency fluctuations. Indofood had a
foreign-exchange loss of Rp 264.8 billion in the period, from a
gain of Rp 34.4 billion a year earlier.

Indofood is competing with a growing number of producers,
including detergent-maker Wings Group, which began selling
instant noodles to compete with Indofood last year. Wing's Mie
Sedap noodle brand retails for a fifth less than Indofood's
Indomie and Sarimie brands.

Indofood, which accounts for more than 80 of every 100 packs
of noodles sold in the country, is counting on increasing
consumer demand this year to stem slowing sales growth.

Indonesia's economy, Southeast Asia's biggest, probably
expanded as much as 4.9 percent in the third quarter, the central
bank said earlier this month. Consumer spending accounts for
about 70 percent of the $208 billion economy.