JAKARTA -- Indofood Sukses Makmur, Indonesia's largest food company, said on Friday net profit for the January-March quarter rose 11% year-on-year to 1.2 trillion rupiah ($90 million) thanks to better palm oil sales.
Revenue grew 8% to 17.83 trillion rupiah. Its core consumer branded products division, which includes instant noodles, milk, snacks and seasonings, posted a 6% increase in revenue and 16% rise in net profit. Analysts attributed the rise to higher selling prices of instant noodles.
In a news release, Indofood's President and Chief Executive Officer Anthoni Salim said the division outpaced growth in the overall market despite "increasing competition and weaker market demand."
Indofood's Singapore-listed agribusiness unit, Indofood Agri Resources, saw net profit jump 80% to 170 billion rupiah thanks to the rise of crude palm oil production as well as higher average selling prices. Indofood Agri controls plantations in Indonesia's Sumatra and Kalimantan.
Indofood's shares opened slightly higher on Friday morning before most of the gains were pared. Analysts have said consumer spending in Indonesia has yet to show signs of a major recovery, and that Indofood's earnings in the short term are likely to be determined by the fluctuation in commodity prices such as palm oil, wheat and skim milk.
On April 26, Indofood announced the sale of its remaining 29.94% stake in Chinese vegetable processing company China Minzhong Food for 235.5 million Singapore dollars ($168 million). The return on the China Minzhong investment has been lower than expected, the company said, and the sale will enable it to "further strengthen its financial position."