PT Indofood's profit increases 45 percent

JAKARTA (JP): Publicly listed food manufacturer PT Indofood Sukses Makmur reported yesterday a 45 percent increase in its net profit to Rp 240 billion (US$87.3 million) in the first six months of 1997 compared to the same period last year.

Company chief executive officer, Eva Riyanti Hutapea, said that for the first half of this year, Indofood had a 57 percent increase in sales to Rp 2.2 trillion.

After including the newly acquired businesses, a more balanced sales portfolio was achieved, including noodles (40 percent), flour (24 percent), trade and distribution (21 percent), edible oil and fats (9 percent) and other packaged food operations (6 percent), she said.

"Demand for Indofood's instant noodles continued to grow at an encouraging rate of 14 percent to 4.2 billion packs in the first half, confirming the strength of Indofood's brands," she said, adding that the noodle industry grew by 8 percent last year.

The company's financial position on June 30 remained strong, with liquidity over Rp 1 trillion, she said.

The debt to equity ratio stood at 2.22 to 1.

Hutapea said her company is closely monitoring the ongoing rupiah fluctuations and the tightening of the liquidity by monetary authorities.

"We have adopted and will continue to adopt appropriate measures to minimize any negative effects including improvements in operating efficiencies," she said.

She added that in the past the company had been able to secure the dollar debt funding at attractive rates and had benefited from Bank Indonesia's previous policy of the rupiah's steady depreciation against the dollar.

Earlier in the year, Indofood had opted to only minimally hedge its foreign exchange debts, she said.

Barring any unforeseen events, profits for 1997 were originally projected to increase to over Rp 500 billion or 45 percent growth, she said.

"However, with the current situation, the company's profit will be affected, despite improvements in its operating efficiencies," Hutapea said.

She said that any exchange losses would be unrealized (paper) losses as the company's dollar exposure was long-term and liabilities would only fall due within the next five years. (icn)