Indonesian food company expected to propel group earnings
Instant noodles will be a key growth driver at First Pacific despite the company's fears of rising competition in the sector and the impact of a volatile Indonesian rupiah, according to analysts.
First Pacific, a Hong Kong-listed conglomerate with most of its operations in the Philippines and Indonesia, has spent the past six years turning around Indofood Sukses Makmur, the world's largest maker of instant noodles, since it bought into the troubled Indonesian company in 1999 for US$650 million.
'The action point this year at First Pacific will be Indofood. That division is the happening place within the First Pacific group,' a United States investment bank analyst said. 'Everyone thinks of Indofood as a dull and boring noodle maker, but it's made the most out of a boring product portfolio ... and has been slowly digging itself out of its debts.'
The analyst expected contributions from Philippine Long Distance Telephone (PLDT), First Pacific's 24.2 per cent-held telecommunications arm, to be flat this year.
'PLDT has already managed to capture a very large user base in the Philippines, and I think its earnings momentum may begin to slow.'
First Pacific posted an 81.5 per cent jump in net profit to US$134.5 million for the year to December. This was boosted by US$23 million in non-recurring gains from discontinued operations, including US$17.1 million from its sale of 49 per cent of Indian mobile operator Escotel Mobile Communications.
