Tri Polyta's net income rises 27% to $7.1 million
Tri Polyta's net income rises 27% to $7.1 million
JAKARTA (JP): PT Tri Polyta Indonesia (TPI), a polypropylene
resins producer listed on the Nasdaq stock exchange in the United
States, reported yesterday that its net income increased by 27
percent to Rp 15.7 billion (US$7.1 million) in the first quarter
of this year, as compared with the corresponding period of last
year.
"The 27 percent increase in net income is measured according
to the American Generally Accepted Accounting Procedure,"
Sudwikatmono, the company's president, told TPI's general
shareholders' meeting at the Grand Hyatt Hotel here.
TPI, however, also reported a decrease in its earnings per
American Depository Shares (ADS) to 28 U.S. cents in this year's
first quarter from 32 cents in 1994.
The company's vice president, Henry Pribadi, told reporters
that the results were attributable to mechanical malfunctioning
in its two production trains and to a recent increase in the
price of propylene, the raw material for the production of
polypropylene.
Polypropylene is used in the production of plastics.
"Our sales in the first quarter of this year, however, were
very strong, despite the Moslem holidays, which usually tend to
slow business activities down," Henry said.
The company's report states that its revenues in the first
quarter of 1995 increased to Rp 152.9 billion from the sale of
54,261 metric tons, up from 1994's first quarter total of Rp
150.2 billion from the sale of 54,7225 metric tons.
TPI, whose plant is located in Cilegon, West Java, has an
annual production capacity of 212,000 metric tons.
The company floated its shares on the Nasdaq bourse in July
last year, raising $127 million. In March this year TPI secured a
$176 million multi-tranche syndicated loan from a group of
foreign and domestic banks.
Supply
Yesterday's meeting reported that TPI had reached an "in-
principal agreement" with its affiliate, Indonesia's only olefin
producer PT Chandra Asri Petrochemical Center, for the
procurement of propylene over the next five years.
The agreement, however, is still subject to formal approval by
the top executives of the two companies. However, since they are
virtually the same parties, this process is expected to be
completed by June.
Another matter which will probably become more of a hindrance
is the development of tariff structures for both propylene and
polypropylene.
At present, government regulations stipulate that propylene is
subject to a five percent import duty and polypropylene is
subject a 20 percent surcharge on top of a 20 percent import
duty.
According to TPI's prospectus, the company is exempted from
the duty for the importation of the first 200,000 metric tons of
propylene.
While it is not clear how much propylene it has been imported
to date, TPI expects that it will be able to extend the exemption
until it has finished the construction of its third production
train, which is expected to start commercial operations later
this year.
In the meantime, the tariff on propylene imports is expected
to increase soon, especially after executives of Chandra Asri,
whose project is worth $1.7 billion, made a request to the
legislature last year for the imposition of a duty of between 35
percent and 40 percent on imports of olefin products -- including
propylene -- possibly for the next 10 years.
The request sparked months of intense debate at various levels
of government and within the local business community.
Although a decision on Chandra Asri's request has yet to be
announced, many analysts expect the olefin producer will have its
way because of the group's political clout.
Report
TPI also released its annual report yesterday, which was
prepared according to auditing standards used by the Indonesian
Institute of Accountants.
The company, which is 29 percent owned by the public, reported
that its net profit last year increased to Rp 76.18 billion from
Rp 32.52 billion in 1993.
Its total assets, in the meantime, grew to Rp 817.91 billion
last year from Rp 624.88 billion in the previous year.
TPI's majority shareholder is PT Bina Kimia Citra, with a 31
percent stake. Bina Kimia is a subsidiary of the Bimantara Citra
Group, which is headed by Bambang Trihatmodjo, President
Soeharto's second son.
The other shareholders are prominent industrialists in
Indonesia, including Prajogo Pangestu (controlling eight
percent), Henry Pribadi (seven percent), Ibrahim Risjad (five
percent), Sudwikatmono (five percent), Henry Liem (four percent)
and Johny Djuhar (two percent). (hdj)