Sliding rupiah dents C&C gain

Sliding rupiah dents C&C gain

SINGAPORE (Dow Jones): Cycle & Carriage Ltd.'s earnings were
dented by the sliding Indonesia rupiah, the Singapore car
distributor said Tuesday.

It reported net profit for the first half ended June 30 fell
sharply to S$19.3 million (US$11.1 million) from S$56 million in
the same period last year. This was due to the unhedged U.S.-
dollar debt of PT Astra International, in which Cycle & Carriage
owns 31.1 percent.

Cycle & Carriage said its share of Astra's debt comes up to
US$92.4 million. If not for the Astra debt and S$1.6 million of
provisions at its MCL Land Ltd. unit, Cycle & Carriage said it
would have earned S$83 million.

Cycle & Carriage acquired an initial 24.9 percent stake in
Astra for US$309.4 million in March as part of an international
consortium that bought 41.1 percent in Astra from the Indonesian
Bank Restructuring Agency. Later, Cycle & Carriage bought another
6.4 percent in Astra for US$70.9 million.

Cycle & Carriage ventured into Indonesia after losing the
exclusive right to import and distribute Mercedes-Benz
automobiles to Singapore in December. Those operations were
assumed by DaimlerChrysler AG, leaving Cycle & Carriage only a
retail role.

The Astra deal had sparked hopes that Cycle & Carriage would
overcome the loss of its Mercedes-Benz franchise to become a
major regional automotive player. But since the deal was
announced, the U.S. dollar has gained 20 percent against the
rupiah.

The rupiah closed at Rp 8,965 versus the U.S. dollar late
Tuesday in Asia as a result of political uncertainty in
Indonesia, after a bomb blast in Jakarta earlier in the day
killed three and ripped apart a car carrying the Philippine
ambassador as it entered his official residence.

Even so, Cycle & Carriage said Tuesday: "Astra will enable
Cycle & Carriage to focus on its core competency in the
automotive sector and also diversify its earnings base through
Astra's non-automotive business."

Astra produces Indonesia's best-selling Kijang multipurpose
vehicle under a joint venture with Toyota Motor Corp., and it has
similar deals with other foreign car manufacturers. It also has a
plantation unit, a heavy machinery distributor and a technology
concern.

"Astra should continue to perform satisfactorily at the
trading level," Cycle & Carriage said. "It is hoped that
political stability (in Indonesia) will restrict any further
decline in the rupiah and limit the consequent foreign exchange
losses."

Overall, Cycle & Carriage said, earnings from motor vehicle
operations jumped 164 percent to S$64.9 million, thanks in part
to a surge in sales in Singapore and Malaysia.

Cycle & Carriage Bintang Bhd., the company's Malaysian unit,
Monday said first-half net profit rose to 40.54 million Malaysian
ringgit from 37.56 million ringgit in the year-ago period.

At its MCL Land property unit, net profit fell to S$9 million
in the first half ended June 30, from S$13.1 million on year,
partly due to a slowdown in the residential property market.