Holcim to hedge IDR4 trillion debts

Holcim to hedge IDR4 trillion debts
Published: 22 March 2006

PT Holcim Indonesia Tbk may apply the strategy of hedging on its IDR4 trillion foreign currency debt in April and Mat to prevent from foreign exchange losses.  The company registered IDR247.192 billion foreign exchange losses, down from IDR407.4 billion losses in 2004. The net profit, meanwhile, was ODR533.13 billion in 2004, down to IDR334.081 billion in 2005.
 
Holcim Indonesia President Director Tim Mackay said the EBITDA of 2005 has increased by 58% to IDR545 billion.  "Our sales revenue increased by 27 per cent to IDR3.01 trillion, while on operational side we registered operational profit of IDR119 billion, swinging from IDR70 billion losses on the previous year," he said in a response to the question of Bisnis Indonesia yesterday. 
 
Apart from registering higher EBITDA, Holcim Indonesia also has bought back some debts to prevent from further foreign exchange losses. The company, in cooperation with the creditors, is also studying the strategy to deal with its debt.  He said that due to the inherited foreign exchange debt, low sentiment to local currency, and higher interest rate, the prospect of net profit will not change too much. 
 
Mackay declined to confirm the company’s hedging plan. He said the company will explain the detail about this on the annual general meeting of shareholders next Monday. 
 
An  analyst of PT BNI Securities, Made Satyaguna, also knows that Holcim plans to hedge its debt as the management of the company has disclosed the strategy to analysts.  He said the loss of Holcim was due to the foreign exchange loss, while the company’s selling price was lower than the market price. Holcim is the only cement producing company selling the product below the market price to retain the market share. 
 
Satyaguna  said the plan to use trade mark of Holcim will create positive impact to the company’s operation.  With such trade mark, the company hopes foreign companies developing infrastructure in Indonesia will use the product of the company as Holcim has good reputation in international market. This may also assist in pushing up its prices.