Tunas Finance targets profit increase of 70 percent in 2005

Tunas Finance targets profit increase of 70 percent in 2005

The Jakarta Post, Jakarta

Betting on continued robust demand, PT Tunas Financindo Sarana
(Tunas Finance), an automotive financing company under PT Tunas
Ridean, is targeting an increase in net profit of almost 70
percent for this year.

The company projects that this year's net profit will reach
about Rp 100 billion through the financing Rp 1.8 trillion worth
of new vehicle purchases this year, from Rp 59 billion in 2004,
president Halim Gunadi said on Thursday.

"We hope to increase our profit by putting forward our quick
and friendly service," said Halim.

Last year, the company financed Rp 1.235 trillion in new cars
and motorcycles purchases.

To help reach the target, Halim went on, the company was
planning to open five more branch offices, located in Palembang
(South Sumatra), Pekanbaru (Riau), Purwokerto (Central Java),
Jakarta and Banjarmasin (South Kalimantan).

Currently, the company is operating with 21 branch offices
nationwide.

The automotive financing company, operating since 1992,
receives its largest portion it's profit from financing car
purchases, while "motorcycle purchases contribute only 10
percent" said Halim.

"Most of our car portfolios are for Toyota brands.

"We still see very good prospects in the vehicle financing
business for 10 more years as the demand for vehicles, especially
cars, will still be high," he added.

The Association of Indonesian Automotive Manufacturers
(Gaikindo) expected car sales in 2005 to increase by 10 percent.
Last year's sales of 480,000 units exceeded the initial target of
440,000.

Tunas Finance is among many automotive financing companies in
Indonesia that have been taking advantage of the surge in demand
for vehicles in the past years.

"Our most active competitor is ACC (PT Astra Sedaya Finance),"
Halim said, naming the automotive financing company under the
automotive giant PT Astra International.

Other major companies in the business are PT Wahana Ottomitra
Multiartha (WOM) under the publicly listed Bank International
Indonesia (BII) and Adira Finance under Bank Danamon.

Competition also comes from banks that have their own
automotive financing products but "finance companies are usually
better in the network and can process loan applications faster."

In the past five years Tunas Rental has served several
companies, such as Bank Permata, Bank Mandiri, PT Telkom and
British American Tobacco.

Tunas Rental signed a contract with BII on Thursday to replace
and manage the bank's 632 operational vehicles for the next three
years.

Tunas Finance is owned by PT Tunas Ridean Tbk, a publicly
listed independent automotive dealership, which has a 75 percent
share, and PT Tunas Mobilindo Parama, with a 25 percent
share.

Aside from car and motorcycle financing, Tunas Finance
developed a vehicle rental and fleet management service division
called Tunas Rental in 1999. (003)