Stronger rupiah boosts Indofood profits

By Dominique Patton

- Last updated on GMT

Related tags: Currency

The world's leading instant noodle maker Indofood said last week
that its first-quarter net profit rose 48 per cent from the prior
year's same period thanks to an increase in sales and
foreign-exchange gains.

Sales during the quarter ended 31 March rose 14.3 per cent to IDR4.9 trillion (€442.7m), thanks to higher volumes and revenues on noodles. The company sold almost 20 per cent more noodles than in the first quarter of 2005.

And although its margins were eroded by higher fuel and raw material costs, it managed to post a surge in net profits, to IDR173.9 billion, helped significantly by the strengthening of the rupiah in the first quarter.

This left Indofood with foreign exchange gains worth IDR125.0 billion.

The company that also processes flour, edible oils and fats said its debt increased to around US$212 million but in rupiah equivalent remains about the same (IDR6.8 trillion) mainly due to the currency's appreciation.

The group's board promised to focus on continuous "product innovation, prudent management of debts, as well as the implementation of significant changes in the supply and distribution chains, improvement in operating systems & procedures, and manpower rationalization"​ to make the company more efficient in coming months.

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