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Indonesia's Indofood posts biggest 9-mth profit decline in decade on forex hit
[JAKARTA] Indonesia's PT Indofood Sukses Makmur Tbk, one of the world's biggest instant noodle makers, posted on Friday the steepest decline in nine-month profits in a decade as a weak rupiah jacked up financing costs for its foreign currency-denominated debt.
The company reported net profit of 1.68 trillion rupiah (S$172.3 million), down 45 per cent from 3.07 trillion rupiah a year earlier. The decline was the biggest since January-September 2005, according to Thomson Reuters data.
The net profit margin of Indofood, which has businesses in food, beverage and plantations, dropped to 3.5 per cent from 6.6 per cent. "The macro economic condition in the last few months has posed quite a challenge for us," Indofood CEO Anthoni Salim said in a statement. The weak crude palm oil prices had also hit the company's net profit, he added.
The rupiah has fallen 9.2 per cent so far this year, making it the second-worst performing Asian emerging market currency after Malaysia's ringgit.
Indofood had previously said it has around US$1.2 billion of debt denominated in foreign currencies and it will hedge 20 per cent of its net exposure.
Indofood's Singapore-listed plantation unit, Indofood Agri Resources, posted on Thursday a 49 per cent fall in third-quarter core profit excluding forex impact.