Exchange Rate Losses of Indocement falling

Exchange Rate Losses of Indocement falling
Published: 22 November 2005

PT Indocement Tunggal Prakarsa Tbk predicted that the exchange rate loss of the company will decrease this year as the company has hedge some US$150m of its debt, while the exchange rate of Japanese Yen also has decreased (reports Bisnis Indonesia)  The outstanding debt of the cement manufacturing company was US$423m, consisting of US$6.2m debt on local currency, US$148m on JPY and US$269m on US currency. Of the US$269m debt on US currency, the company has hedged some US$150m of it.  

The Finance Director of Indocement, Christian Kartawijaya, said that the exchange rate loss of the company would be covered with the profit from the lower rate of JPY as well as the hedging.   Early this year, US currency was traded at JPY110, and now it has been traded at JPY118. Therefore the exchange rate losses of the company would be lower than that of last year.   "We have been saved by the weaker yen and the hedging of US$150m debt. Otherwise, we will suffer from significant losses," he said last week.  

He said previously that the company has hedged the principal as well as the interest rate of its debt to be matured on May 2006.  Every three months the company has to pay US$10m debt or US$40m per annum.  Apparently the company also has hedged the principal as well as the interest rate of its debt the company has to settle on June next year.