SURABAYA: Plastic houseware manufacturer, PT Langgeng Makmur Industri Tbk prepares IDR30 billion for its capital expenditure.
Director of Finance Kosasih stated the fund will be allocated for new product innovation and improving production capacity at all lines.
The fund, he continued, was derived from bank loan, which has entered the second period. In 2010, the company obtained an extra loan facility totaling IDR150 billion. The amount is divided into two objectives, namely IDR129 billion for working capital loan and IDR50 billion will be fixed loan.
The remaining IDR21 billion will be allocated for investment credit. "Loan facility from Bank Mandiri is a refinancing from Bank BRI that has served as our banker in 2009."
The company cannot fulfill the capex due to lower net income in 2010 at IDR2.79 billion from IDR5.99 billion.
The decrease was due to narrowing operating income to IDR15.58 billion from IDR17.91 billion in 2009. "Smaller profit leads to smaller earnings per share at IDR2.77 in 2010 from IDR5.94 in 2009."
Moreover, he continued, the credit option was taken as the company has been recording loss as much as IDR102 billion since 1998. In fact, the company has not handed dividend since 1997.
To improve its performance in 2011, the company targets to increase sales by 10% from 2010 achievement at IDR441 billion. Per May 2011, the company recorded IDR98 billion sales of which 51.6% came from aluminum cooking equipment sales. (T05/NOM)
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Source: http://www.bisnis.com/business/25891-langgeng-makmur-sets-idr30-billion-capex
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