Indofood projects 45% increase in net profit

JAKARTA (JP): Publicly listed PT Indofood Sukses Makmur projected yesterday its net profit would grow 45 percent to Rp 508 billion (US$205 million) this year.

Company chief executive officer Eva Riyanti Hutapea said the company had reviewed its initial 15 percent profit growth target because it had better earnings prospects since the recent purchase of its six sister companies.

"Indofood has also reviewed its sales target for this year from Rp 4.2 trillion to above Rp 5 trillion," Hutapea said after the company's general and extraordinary shareholders meetings.

At the meetings were its president commissioner Sudono Salim, commissioner Anthony Salim, commissioner Putra Sampurna and president director Sudwikatmono.

Indofood bought PT Salim Ivomas Pratama, PT Intiboga Sejahtera, PT Salim Oil Grains, PT Bitung Manado Oil Ltd, PT Argha Giri Perkasa and PT Indomarco Adi Pratama in April.

Salim Ivomas manages about 50,000 hectares of oil palm plantations and makes crude palm oil. Bitung Manado makes and exports refined and crude coconut oil. Salim Oil Grains trades internationally in edible oil products. Indomarco Adi distributes consumer goods. Intiboga Sejahtera makes edible oils from palm oil and Argha Giri makes coconut oil.

Indofood bought 80 percent of the shares in each of the six companies for Rp 1.5 trillion (US$651.26 million)

Hutapea said Indofood last week signed an agreement with 36 foreign banks to borrow $250 million in syndicated loans to finance the acquisition of the six companies.

The loan was arranged by Credit Suisse, First Boston, Chase Manhattan Bank, Commerce Bank, Fuji Bank, Bank of America and Credit Lyonnais.

The company will also issue 305.20 million rights shares at Rp 3,300 each in a five-for-one ratio to raise Rp 1.007 trillion to finance the acquisition.

Hutapea said Indofood increased its net profit 15 percent to Rp 351 billion in 1996 and its net sales by 35 percent to Rp 2.83 trillion.

She said the company increased its profit margin from 17.87 percent to 18.49 percent last year with increased efficiency.

The sale of processed food (noodles, biscuits, spices, etc) earned Rp 1.78 trillion or 63 percent of the company's total sales income last year, while wheatflour brought in Rp 1.05 trillion or 37 percent of the total.

It sold 7.3 billion packs of noodles valued at Rp 1.5 trillion and 2.6 million tons of flour worth Rp 1.05 trillion.

Hutapea said Indofood controlled 90 percent of the domestic noodle market, 70 percent of the snack market and 60 percent of the children's food market in 1996.

The meetings agreed to distribute Rp 71.7 billion of its net profit, or Rp 47 a share, as dividends.

The meetings also agreed to increase the company's paid up capital from Rp 1 trillion to Rp 3 trillion. (jsk)