Indofood Profit Rises 2% as Raw Material Costs Increase

PT Indofood Sukses Makmur, the world's biggest noodle maker, said first-quarter profit rose 2
percent as higher costs of purchasing wheat countered rising sales of its Indomie noodles and La Fonte pasta in Indonesia.

Net income at the company controlled by businessman Anthoni Salim rose to 177.3 billion rupiah ($19.5 million) in the three months ended March 31, from 173.9 billion rupiah in the same
period a year earlier, the company said today in an e-mailed statement. Sales rose 18.4 percent to 5.8 trillion rupiah.

Rising prices of wheat resulted in a 20 percent increase in the cost of sales to 4.58 trillion rupiah, the company said. The average price of wheat rose 42 percent in the quarter from the
same period a year earlier on the Chicago Board of Trade.

``The rise in the price of wheat and other raw materials has put pressure on our gross margin,'' Salim said in the statement. ``The ongoing implementation of cost efficiency has continued to curb the effects'' of rising expenses.

Sales of the company's noodles, pasta and Promina baby food have been rising after Indofood started selling through more outlets. Rising incomes in Southeast Asia's biggest economy may help boosting sales and profit as Indonesians spend more on processed food.

Indofood's shares, which have risen 25 percent this year, fell 0.6 percent to 1690 rupiah in Jakarta on April 27.