Indofood reports 23% rise in first quarter net sales

JAKARTA (JP): Publicly-listed PT Indofood Sukses Makmur announced that net sales in the first quarter of 2001 increased by 23 percent to Rp 3.5 trillion (US$318 million) from the same period last year.

Company president Eva Riyanti Hutapea said in a media statement issued on Sunday that the instant noodle, cooking oil, and flour divisions respectively contributed 36 percent, 16 percent, and 28 percent to net sales.

Eva said that the company managed to sell around 2.4 billion packages of instant noodles in the first quarter, which was a 7 percent increase compared to the same period last year, while sales value rose by 16 percent to Rp 1.3 trillion.

Indofood is known as the largest instant noodle-maker in the world.

But Eva said that net profit only increased slightly to Rp 219.4 billion.

She explained that operating profits during the first quarter declined to Rp 566.33 billion as the company had not adjusted the selling price of its instant noodle products since the last price adjustment in February despite the fall in the value of the rupiah in March that raised production costs.

Eva also said that the gross profit margin and operating profit margin declined to 27 percent and 16 percent, respectively.

Elsewhere, Indofood said that its outstanding U.S. dollar debt, as of the end of March 2001, totaled $444 million.

The company said that it planned to repay around $126 million of its debts in July this year to lower the debt to around $318 million.

Indofood also said that total assets, as of the end of March 2001, was Rp 13.5 trillion, while its total equity of Rp 3.3 trillion experienced a 25 percent increase from the same period last year.

Indofood was founded by business tycoon Liem Sio Liong who also founded the Salim Group conglomerate, which transferred shares and assets from around 100 Salim companies, including Indofood in 1999, to the Indonesian Bank Restructuring Agency (IBRA) in a bid to repay the group's debt to the government.

Shares in Indofood fell by Rp 25 on Friday to close at Rp 775 per share.

Traders said that, in addition to the generally weak market sentiment due to the weakening rupiah, investors were concerned about how the company planned to finance a proposed purchase of more than 30 percent of Singapore's Golden-Agri Resources worth at least $97.6 million.

Dealers said that the weakening rupiah raises questions over the company's capacity to borrow more money to finance the acquisition, as it already has a substantial amount of U.S. dollar debt. (rei)