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PT Wahana Ottomitra Multiartha (WOM Finance), a publicly
listed firm that provides loans for motorcycle purchases, is targeting
a 70 percent increase in net profit this year on the back of declining
lending rates and improved purchasing power.
The company's president director, Benny Wenas, said Wednesday that the
company's net profit, which fell 45 percent from Rp 165 billion (US$ 18
million) in 2005 to Rp 91 billion in 2006, was expected to increase to
Rp 150 billion this year.
National motorcycle sales declined from 5 million in 2005 to 4.4
million last year, but are expected to bounce back this year as the
result of the country's current stable macroeconomic conditions.
"In line with the decrease in the central bank's benchmark interest
rate, we will decrease our lending rate by up to two percentage
points," Benny said, adding that the company's lending rates varied
across the country, ranging between 24 and 30 percent per annum.
WOM Finance has set itself a target of increasing lending this year by
between 15 and 20 percent to Rp 4.6 trillion, which is expected to
finance the purchase of about 460,000 motorcycles. In 2006, the company
lent Rp 4 trillion to finance the purchase of 400,946 motorcycles.
To finance this year's lending, the company will issue Rp 1 trillion in
bonds in May.
This year's bond issue will be the company's biggest ever. It issued
bonds worth Rp 825 billion last year, and Rp 500 billion in 2005.
According to Benny, the remaining Rp 3.6 trillion would likely come
from borrowing, not only from domestic banks, but also international
banks.
Benny said that as of the end of February, the company had lent out
about Rp 550 billion for the purchase of 55,000 motorcycles.
"Year-on-year sales during January and February increased by 57 percent
from the same period last year," Benny said.
The firm has a 10 percent share of the motorcycle financing market in
Indonesia.
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