Transportation company on the road to recovery

JAKARTA (JP): Publicly listed PT Mitra Rajasa Tbk, a land transportation service company, announced on Monday it was back on the road to recovery after recording a Rp 7.85 billion (US$1.14 million) profit in the first half of 1999.

"The company did far better than it expected, with main sales and profit coming largely from the trucking division," Mitra Rajasa advisor Tjiptono Darmaji announced.

The company lost Rp 46.37 billion in 1998, largely through the swelling in its dollar denominated debt obligations.

Tjiptono said the company had earlier predicted that its profit for the entire 1999 would only reach Rp 5.32 billion.

Mitra Rajasa, listed on the Jakarta Stock Exchange in January 1997, provides land transportation services, including trucks for the cement industry and other general cargo, rental and intercity buses.

The company lost Rp 6.95 billion in the first quarter of 1999 but went back into the black in the second with a profit of Rp 14.80 billion, thanks largely to a more stable economy.

"The loss in the first quarter was mainly due to the holiday seasons in January, exchange rate fluctuations, low cement demand due to slow growth in the property sector, and higher operational costs, especially spare parts and tires," Tjiptono said.

The company planned to distribute bonuses, and to conduct revaluation of its assets in 1999, Tjiptono said, adding that a preliminary revaluation gave a Rp 39.38 billion increase.

Mitra Rajasa's total assets were worth Rp 122.89 billion at the end of June.

When effected, the revaluation would be reflected in the paid- up capital, which should increase to Rp 114 billion from Rp 57 billion at present.

The company plans to offer rights issue in 2000 which would further boost paid-up capital to Rp 164 billion, he said.

Mitra Rajasa is owned by PT Mitramumi Ekspressindo with a 40.94 percent share, PT. Intikencana Pranajati (18.01 percent), and the public (41.05 percent).

Currently, the company has leasing debts amounting to $8.6 million (Rp 60.2 billion at MOnday's exchange rate of Rp 7,000 to the dollar) and bank loans of Rp 8 billion.

To increase performance, management plans to restructure its debts and establish joint operations with foreign investors.

It will also shift its trucks' main cargo from construction materials to consumer products and focus its activites on intercity buses and tour operations, Tjiptono said. (02)