Indofood's net profit nosedives 88 percent

The Jakarta Post, Jakarta

The world's largest instant noodle maker PT Indofood Sukses Makmur's net profit in the first semester nosedived by 88 percent to Rp 14.5 billion (US$1.4 million) from Rp 120.8 billion in the corresponding period last year.

The company attributed the profit drop to one-time charges and loans amounting to Rp 186.3 billion, it said in a statement on Friday, including losses arising from the sale of foreign exchange hedging contracts.

"Without those payments, our corporate net profit could have reached Rp 200.7 billion," Indofood CEO Anthoni Salim said in the statement.

Indofood subsidiary, PT Bogasari Sentra Flour Mills, contributed 36 percent to the company's sales in this year's first half, followed by 37 percent from the sale of consumer products, 15 percent from cooking oil, and 12 percent from distribution.

The company also said that its operating profit margin was down to 10.3 percent in the year's first semester compared to 11.8 percent in the first half of last year. It said the decrease in volume sales of instant noodles, flour, crude palm oil and cooking ingredients contributed to the margin drop.

Indofood's total foreign debts decreased to $172.1 million as of June 30 from $317.4 million as of Dec. 31, 2004, while its domestic debts declined from Rp 4.9 trillion as of end of last year to Rp 4.8 trillion as of the end of this year's first semester.

The company also said that as per June 30, it had managed to buy back Eurobonds worth $149.3 million out of a total of $310 million that had been sold in June 2002 by Indofood International Finance Ltd., a wholly-owned subsidiary domiciled in Mauritius, to avoid higher tax of 20 percent compared to 10 percent previously as a result of the cancellation of the tax treaty between Indonesia and Mauritius.

The company's board of directors also said it would further study the domestic market before going ahead with its spin-off and initial public offering (IPO) plans for Bogasari.