Sinar Mas firms rule out dividends

JAKARTA (JP): Shareholders of PT Indah Kiat Pulp & Paper Corp., PT Pabrik Kertas Tjiwi Kimia and PT SMART Corp. have agreed to not provide a dividend for the 1997 calender year due to the economic crisis, according to press statements from the companies.

The three listed companies are controlled by the Sinar Mas Group, the country's second largest conglomerate.

Indonesia's giant pulp and paper operation, Indah Kiat, said its Rp 392 billion (US$26.49 million) 1997 net profit would be used as working capital since outside financing had been difficult to obtain during the crisis.

Paper manufacturer Tjiwi Kimia said its Rp 348.42 billion 1997 net profit would be used to finance debt payments, import raw materials and be retained as capital.

"The import of raw materials can't all be financed through letters of credit. We must also pay in cash," the company said in a statement.

Integrated palm-based consumer products maker SMART said it had decided not to pay a dividend since it had suffered foreign exchange losses and saw a poor performance from its drink manufacturer subsidiary.

SMART booked a Rp 160 billion interest and foreign exchange loss resulting from a US$150 million swap contract signed in July to hedge its U.S. dollar loans.

The company did not disclose its total dollar debts.

It also said that its PT Navika drink maker suffered a Rp 87.7 billion loss last year.

It added that Navika had been sold in December to reduce losses.

SMART reported a gross profit of Rp 180.72 billion, which was more than a 62 percent increase from 1996. (rei)