Pudjiadi expects net profits to fall

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)