Indofood records net loss for 1997
Indofood records net loss for 1997
JAKARTA (JP): Indonesia's largest instant noodle maker PT
Indofood Sukses Makmur yesterday reported a net loss in 1997 of
Rp 1.2 trillion (US$150 million) as a result of the sharp plunge
in the value of the rupiah.
The publicly-listed company said it had decided to take a one-
time charge amounting to Rp 1.8 trillion for its net forex
losses, using the year-end exchange rate of Rp 5,300 to the U.S.
dollar.
"From the total forex losses, Rp 352 billion was charged as
'normal forex losses' and Rp 1.5 trillion was recorded as net
extraordinary losses," the company said in a statement.
If Indofood had chosen to use a year end exchange rate of Rp
4,650 the net loss would have been Rp 895 billion, company chief
executive officer Eva Riyanti Hutapea said.
The company announced that net sales for the year ending Dec.
31 grew by 17.4 percent to Rp 5 trillion, while income increased
by 21.8 percent to Rp 855 billion.
The noodle division remains the major part of the company's
operations, accounting for 35 percent of total sales. Last year
the division grew by 12 percent and sold 8.2 billion packets. The
division's net operating profit made up 39 percent of the group's
total operating profits.
"It is noteworthy that profitability of the noodle operations
has been sustained despite the fact that Indofood has not
increased selling prices since January 1995," the statement read.
The Bogasari Flour Mills division contributed 22 percent of
consolidated net sales. Its net operating margin of 16 percent
was equivalent to 21 percent of the group's operating profits,
Indofood said.
The newly acquired Edible Oil & Fats business performed in
line with expectations, generating 32 percent of total sales.
The snack food and baby food divisions also continued to
maintain their dominant market share positions, the statement
added.
Indofood holds Rp 6.2 trillion in bank loans, most of which
are denominated in U.S. dollars and repayable within five
years.
The company hedged 43 percent of foreign currency loans at the
end of December.
"Currently, excluding export revenues, Indofood has covered
more than 80 percent of its exposure at favorable rates," it
said.
The company's hedging position will strengthen as forex
revenues arising from exports are expected to exceed $300 million
in 1998, compared to $257 million last year.
The company said that it will maintain its commitment to
paying interest and principal installments from outstanding loans
on time. (rei)