Pudjiadi expects net profits to fall
JAKARTA (JP): PT Pudjiadi and Sons Estates expects another big decline in net profit this year as foreign exchange debts and declining revenues will likely further hit the publicly listed hotel operator, the company's senior executive said yesterday.
Company president Lukman Pudjiadi said foreign debt repayment, the decline in the property market and the slowdown in foreign tourist arrivals would cause a further plunge in revenue.
"This will result in another drop in profit," he told reporters following the company's shareholders meeting. But he did not speculate on how much the profit would drop by.
Lukman said it was really difficult for the company to make any projection now because of the lingering political uncertainty and the rupiah's continued decline against the dollar.
Pudjiadi, which operates and manages the Jayakarta Tower hotel in downtown Jakarta, has dollar-denominated debts of US$10.69 million. They to several financial institutions including Bank Niaga, GHF Hongkong and Daiwa Perdania Bank.
"The loans will mature next year with an interest rate of 8 percent per year," Lukman said.
He said that the massive riots here last month, where angry mobs vandalized shops and buildings, had scared foreign tourists already in Indonesia and would dissuade other foreign tourists from coming here.
"Since political stability is not fully restored yet, no foreign tourists are expected to come for the rest of the year.
"With no foreign tourists coming to this country, our earnings will certainly continue to decline."
The company, which recorded a net loss of Rp 19.6 billion (US$1.96 million) last year due to massive foreign exchange losses, also plans to sell its hotel in Dallas, the United States, to foreign investors to obtain fresh funds.
"But no foreign investors have expressed any interest yet," Lukman said, adding that the company's hotel in Dallas was being offered at US$29 million.
The company's revenue increased to Rp38.70 billion last year from Rp 35.51 billion the previous year. (aly)