PT Indorama expects Rp 131 b ent profits
PT Indorama expects Rp 131 b ent profits
JAKARTA (JP): PT Indorama synthetic, Indonesia's largest
polyester producer, expects the price of purified terephthalic
acid (PTA) to drop to $600 per ton on the world market due to a
glut in supplies.
"We believe that PTA prices, which have already dropped by 37
percent from last year's level to around $730 per metric ton at
present, are likely to drop to $600 soon, and to stay there until
perhaps 1999," Indorama's vice president, Sri Prakash Lohia, told
journalists here yesterday.
He said that currently world supply of PTA exceeds demand by
approximately 1.7 million metric tons.
"Following the downwards trend of PTA prices, the prices of
polyester finished products have also dropped by an average of 15
percent," he added.
He said that Indorama, however, is still optimistic it can
increase operating profits in the coming years.
The company recently told analysts that it expected to book
sales revenues of Rp 925 billion (US$394 million) this year,
supported by production capacity expansion.
Last year, the company's total sales reached Rp 676 billion,
of which exports accounted for Rp 385 billion.
After-tax profits are expected to rise to Rp 131 billion this
year from Rp 120 billion last year.
The company, however, reported a disappointing performance in
the first quarter of this year. Its pre-tax profits dropped from
Rp 42 billion in the first quarter of last year to Rp 31 billion
in the same period of this year although sales were up from Rp
116 billion to Rp 158 billion.
Net profits also dropped from Rp 22 billion in the period from
January to March last year to Rp 20 billion in the same period of
this year.
Commenting on the drop of its net profits for the first
quarter of his year, a director of the company, Chander Vinod
Laroya said "We have yet to take advantage of the declining price
of PTA. This is because we had to use up our PTA stocks which
were bought at higher prices."
"We always keep enough stock for two to three months
production. Therefore, the impact of falling prices will not be
felt until the second or third quarter this year," another
executive of the company, Arvind Parakh, said.
Third plant
Lohia said Indorama's third polyester plant will start
commercial production early next month with a production capacity
of 84,000 tons per annum.
"The operation of the new plant, which will manufacture micro
filament and other yarns, will raise our annual production
capacity to 216,000 tons of polyester this year," he said.
Lohia said Indorama's shareholders yesterday approved the
management's proposal to pay dividends of Rp 170 per share for
1995, compared to Rp 140 per share for the previous year.
The total dividend payout for 1995 will be Rp 31 billion, as
compared to Rp 21 billion in 1994.
Lohia also said that as of yesterday, 92.4 percent of the
holders of the company's Swiss-franc convertible bonds had
converted the bonds into shares.
"We have issued a "call option" on all outstanding Swiss franc
convertible bonds worth SFR4.5 million and we are optimistic that
by the middle of June all outstanding bonds will be converted,"
Lohia added.
The conversion of the bonds will add 1.6 million shares to the
company's outstanding shares. (alo)