Sierad Produce suffers loss after profit: Official

JAKARTA (JP): Publicly listed PT Sierad Produce's financial performance might have gone deep into the red last year due to the rupiah's sharp depreciation.

The company's vice president, F.X. Awi Tantra, said yesterday that Sierad, which initially projected a net profit of Rp 47 billion for 1997, suffered a net loss last year due to a high amount of foreign exchange losses.

Awi declined to mention the total loss in 1997 saying the amount was still being calculated.

The rupiah closed at 12,250 to the U.S. dollar yesterday, having lost 81 percent of its value against the dollar since early July last year.

The more than 400 percent increase in the value of the dollar against the rupiah since July has increased the amount of offshore loans of the company, which in 1996 booked a net profit of Rp 27.09 billion and net sales of Rp 454.35 billion.

Awi said the company's total offshore debt was between US$160 million and $170 million as of the end of 1997, but only about $50 million of it was hedged.

He said the hedging, which was made when the rupiah was at 2,600, did not really help as the Indonesian currency continued to fall.

Awi denied media reports that the company had defaulted on its foreign loans.

Roll over

Sierad president Budiardjo Tek said the company was now discussing the possibility of rolling over the payment of its unpaid foreign loans with foreign creditors, including Rabo Bank.

"We've even asked Rabo Bank to become the lead manager in our foreign debt rollover plan," he said.

He said discussions with foreign creditors would cover the possibility of rolling over the principal and interest of the company's foreign debt.

Awi and Budiardjo said the company had not reached any agreement with foreign creditors about the rollover plan.

"We are still in early discussions with the foreign creditors and it is just too early for us to reveal the result to the press," Budiardjo said.

Awi said the company was also in serious discussions with potential overseas investors to take over the company's 11 subsidiaries operating overseas.

"Hopefully within one or two months, we will conclude the deal with overseas investors," he said.

"We have to sell our subsidiaries operating overseas to reduce costs and inefficiency," he said.

Sierad Produce, an integrated poultry company of the Sierad Group, entered into joint ventures with overseas companies, including Bridor of France to produce frozen dough and Triballat of France to produce soya derivatives, in 1995.

The company has also expanded into fast-food businesses in regional markets in Shanghai, Hong Kong, Taiwan and Malaysia. (aly)