PT HM Sampoerna posted $166.3m net profit in 1996

JAKARTA (JP): Publicly listed cigarette maker PT HM Sampoerna booked Rp 394 billion (US$166.3 million) net profit in 1996, 6.2 percent lower than the Rp 420 billion projected.

Finance director Ekadharmajanto Kosasih said the worse-than- expected result was because of losses in the company's international operations.

He said the company's international operations lost US$13 million.

President of the firm Putera Sampoerna said the company expanded its overseas operations in Malaysia, Myanmar, Vietnam and the Philippines at a cost of about US$60 million.

The company has operated in Malaysia since 1990 with a production capacity of 300 million cigarettes a year.

It has been in Vietnam since 1995 and its plant there can make 300 million cigarettes a year.

In Myanmar it can make 100 million cigarettes a year and in the Philippines 300 million a year.

Sampoerna said his company had expected its international loss. "One company had to anticipate a $10 million loss in the first year of international operation," he said.

The company's share price dropped Rp 1,050 to Rp 13,300.

ING Barings Securities Laksono G Widodo said the drop was because investors were disappointed with the company's lower-than-expected profits.

He said the company's net profits were initially projected at Rp 440 billion which was then revised to Rp 420 billion.

"The investors had been disappointed with its profit revision target," he said.

Despite the poor profit result, the company's unaudited net sales reached Rp 2.30 trillion in 1996, up from 1995's Rp 1.68 trillion and forecasted to reach Rp 3.73 trillion in 1997 and Rp 4.22 trillion in 1998.

The company also forecasted a Rp 528 billion net profit in 1997 and Rp 603 billion in 1998.

Sampoerna said the company was considering moving into Thailand, China and Korea by buying companies. "We have not entered Thailand or China due to their monopolistic market," he said.

Last June the company issued bonds worth US$200 million; $100 million was used to finance its domestic expansion.

"We still have $100 million in cash to acquire other companies in the region," he said. (09)