Indofood Profits Plummet 19% as Currency Losses Wipe Out Solid Sales Surge

JAKARTA, Investortrust.id — Indonesia’s largest food consumer group, Indofood Sukses Makmur ($INDF), saw its second-quarter net profit tumble 43% year-over-year to Rp 1.8 trillion ($113.2 million), dragged down by heavy foreign exchange losses as the local currency weakened sharply against the U.S. dollar.

The steep quarterly contraction brought the company's first-half net income to Rp 4.7 trillion ($295.6 million), down 19% compared to the same period last year. A severe foreign exchange loss of Rp 2.2 trillion ($138.4 million) during the first six months of the year—mostly stemming from U.S. dollar-denominated financing activities and bond liabilities as the rupiah neared 17,900 per dollar in late June—completely offset operational strength.

The stark divergence between Indofood's operational resilience and its currency-crippled bottom line highlights the growing vulnerability of Southeast Asia's major consumer giants to foreign exchange volatility. While local consumer demand across Indonesia remains robust, global macro headwinds and high debt-servicing costs in foreign currencies pose an immediate threat to corporate margins across emerging markets.

Operational Core Holds Firm

Despite the currency hit, Indofood’s core business engine continued to fire on key cylinders. First-half revenue grew 9% year-over-year, while total operating profit rose 5% to Rp 11.7 trillion ($735.8 million), aligning closely with consensus market expectations.

The top-line expansion was largely anchored by its flagship consumer branded products subsidiary, Indofood CBP Sukses Makmur ($ICBP), which posted revenue growth of 11% year-over-year for the first half of the year. However, ICBP’s operational gains were visibly diluted by a 17% surge in operating expenses due to escalating logistics expenditures alongside aggressive advertising and promotion spending.

"Bogasari became the outperform segment for INDF, while consumer branded products under Indofood CBP Sukses Makmur recorded moderate performance," said Edi Chandren, Lead Investment Analyst at equity research platform Stockbit, in an earnings review note on Monday.

Bogasari Steps Up as FX Drag Persists

Indofood’s flour milling division, Bogasari, emerged as the star performer of the half, posting an 21% jump in operating profit driven by higher sales volumes and expanding profit margins. Operational foreign exchange gains also provided a minor buffer, jumping to Rp 1.2 trillion ($75.5 million) thanks to a currency recovery in international operations such as Nigeria.

Nevertheless, financing-related currency losses continued to dominate the headline figures. The first-half loss of Rp 2.2 trillion ($138.4 million) marks a sharp reversal from the Rp 261 billion ($16.4 million) foreign exchange gain recorded in the prior-year period, leaving investors focused on how quickly the packaged-food giant can hedge its foreign liabilities moving into the second half.