Indofood will pay dividends on 30% of profit

The Jakarta Post, Jakarta

The world's largest instant noodle maker PT Indofood Sukses Makmur plans to pay out 30 percent of its 2003 net profit in dividends next year, which is the same ratio as last year, a senior official said.

"We have planned to allocate 30 percent of our profit for dividend payouts, but it should be first approved by our shareholders," said Indofood chief executive officer Eva Riyanti Hutapea.

Eva disclosed the plan after signing a cooperation agreement with Bank Mandiri to establish a refinancing scheme for small- and medium-sized enterprises.

In the first nine months of this year, Indofood has recorded a profit of Rp 453 billion (US$53.2 million), 30 percent lower than Rp 651 billion it earned in the same period last year because of higher operational costs. However, sales rose by 10 percent to Rp 13 trillion from Rp 11.8 trillion.

Analysts have predicted that for the full year, Indofood is estimated to book Rp 613 billion in profit and Rp 17.6 trillion in sales. Last year, the company's sales increased by 12 percent to Rp 16.5 trillion, with net profit rising 8 percent to Rp 802 billion.

The lower profit estimate is linked to higher marketing expenses, stiffer competition and weaker consumer purchasing power.

For next year, Indofood expects sales to grow by 10 percent.

The publicly listed company is 52 percent owned by Hong Kong- based First Pacific Co. Ltd., while the remaining shares are held by individual shareholders.

Instant noodles are the main pillar of Indofood's business, with a 55 percent contribution to net profits, followed by flour (22 percent), edible oil and fats (19 percent) and miscellaneous items, such as snacks and baby food (6 percent).