A stronger rupiah helped issuers performance

JAKARTA. A stronger rupiah in this year brought positive impacts to financial performance of issuers. Some issuers could control the losses, while others booked foreign exchange profits.

This year, rupiah spot rate once hit its highest level at IDR12,955 per US$1 on 27 September 2016. In other words, since the beginning of the year until September 2016 rupiah has once strengthened 6.04%. “Foreign exchange profit or loss has significant effects to the bottom line of the issuers”, Head of Research Department of Koneksi Capital Alfred Nainggolan told KONTAN on Wednesday (26/10).

He said that the issuers, which have liabilities in the US dollar will benefit from a stronger rupiah, on the grounds that they may minimize foreign exchange loss. "Issuers who have liabilities in US dollars are very sensitive to this," said Alfred.

For an example, PT Unilever Indonesia Tbk (UNVR) . In the third quarter of 2016, UNVR recorded an IDR6.69 billion of foreign exchange profit, while a year before the issuer suffered an IDR16.22 billion of foreign exchange loss.

As an information, UNVR has liabilities in the US dollar. As of September 2016, total liabilities of UNVR in the US dollar reached US$ 36.24 million compared. In December 2015, the liabilities of UNVR in the US dollar amounted to US$ 107.03 million.

Meanwhile, PT Sri Rejeki Isman Tbk (SRIL) started booking a decrease in foreign exchange loss. In the last third quarter of 2016, foreign exchange loss of SRIL dropped by 88% from US$3.55 million during the same period in 2015 to US$405,250.

Another issuer PT Catur Sentorsa Adiprana Tbk (CSAP) also enjoyed a stronger rupiah, As of September 2016, CSAP used the exchange rate assumption of IDR 12,000 per US$ 1. The assumption was much lower than foreign exchange rate in the previous year that hit above of IDR14,000 per US$1. The stronger rupiah has decreased the total liabilities of CSAP from IDR2.67 trillion to IDR2.52 trillion.

The decrease in foreign exchange loss or the increase in foreign exchange profit has brought positive impacts to issuers performance. The financial incomes from the foreign exchange rate has even supported the issuers performance.

During the third quarter of 2016, UNVR recorded a 13 % increase in net profit to IDR4.75 trillion. Meanwhile SRIL and CSAP booked a 18% and three times increase to US$44.89 million and IDR40.34 billion, respectively.

Meanwhile, PT AKR Corprindo Tbk (AKRA) also enjoys foreign exchange profit. During the first quarter of 2016, AKRA booked an IDR55.87 billion of foreign exchange profit, while in the previous year the issuer suffered IDR923.77 million of foreign exchange loss.

A stronger rupiah allowed AKRA to maintain the decrease in net profit by only 6.16% to IDR793.19 billion. “AKRA succeeded to cut the cost of goods sold (COGS) and booked the foreign exchange profit so that the net profit only slightly decreased”, said analyst at Recapital Securities Kiswoyo Adi Joe through his research.

Meanwhile, as of September 2016 PT Mitra Adiperkasa Tbk (MAPI) booked a 50% decrease in foreign exchange loss to IDR22.04 billion compared with the previous year. This has boosted the net profit of MAPA at four times compared with the same period in the previous year.
As per third quarter of the year, MAPI succeeded to book IDR120.29 billion of net profit, while the income of the issuer increased by 11% from IDR9.4 trillion to IDR10.29 trillion.

(Muhammad Farid/Translator)