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UPDATE 2-Cycle & Carriage 2002 net up 92 pct

(Rewrites, adds details from news conference)

SINGAPORE, Feb 25 (Reuters) - Cycle & Carriage Ltd, one of Southeast Asia's largest motor groups, said on Tuesday it will focus on cutting debt after posting a 92-percent rise in 2002 net profit due to foreign exchange gains from its Indonesian unit.

C&C finance director Neville Venter, speaking at a news conference, said cutting the company's net debt of S$634 million ($366 million) would be the priority in 2003.

Venter said the firm was looking at a number of options, including raising the dividend payout from its subsidiaries and the sale of non-core assets.

C&C's debt rose by S$140 million last year after the company lifted its stake in Indonesia's largest automotive group PT Astra International to 34.3 percent from 31.1 percent.

Astra, which contributed almost 80 percent of C&C's profits, is expected to start paying dividends from its operations this financial year.

On the possibility of raising funds through a rights issue, Philip Eng, C&C group managing director, said such a move was not attractive in the current low-interest environment.

C&C, which is 50.2 percent owned by Hong Kong-based Jardine Strategic , posted net profit of S$231 million ($132.3 million), up from S$120 million in 2001, on a seven percent rise in sales to S$4.99 billion.

The result was better than the expectations of 10 analysts polled by Multex Global Estimates, who had forecast a 72.9 percent gain in net profit to S$208.4 million.

The dealer of Mercedes , Kia Motors Corp and Mitsubishi Motors Corp cars in Singapore said unsettled economic conditions were expected to continue this year and that its net profit would again be affected by the value of the Indonesian rupiah currency.

"The impact of exchange rate fluctuations is, however, being reduced through substantial repayment of Astra's U.S. dollar debt," said Anthony Nightingale, C&C chairman, in a statement.

Earnings from motor vehicle operations fell 18 percent to S$53 million, due to declines in Singapore's highly competitive market where sales are under pressure as Singapore struggles to emerge from its worst economic downturn in nearly 40 years.

However, economic stability in Indonesia allowed Astra to post a creditable earnings contribution of S$185 million, up 74 percent from a year ago, as demand improved.

Shares in C&C ended up four cents at S$3.64.

The stock has fared poorly in the past 12 months, falling 27 percent and underperforming a 21-percent drop in Singapore's benchmark Straits Times Index . Stock in Astra, meanwhile, is up three percent over the same period.

Analysts in Jakarta said Astra's picture had brightened after the maker of Toyota cars in Indonesia managed to raise about US$158 million from a rights issue and successfully restructured US$820 million in debt in December.

On Thursday, Astra said it would sell the manufacturing part of its Toyota joint venture in Indonesia to its Japanese partner while retaining control of the distribution business -- a deal that analysts said could fetch up to US$200 million.

The moves would help lower its debt burden and allow the group to start paying out a dividend this year.

A mismatch between rupiah-denominated revenue and dollar-denominated borrowing hit Astra when the Asian financial crisis caused the Indoneisan currency to plummet.

Astra, which also controls more than half of Indonesia's motorcycle market, is an Indonesian conglomerate with significant interests in palm oil plantations and heavy equipment.

C&C proposed a final dividend of S$0.12 per share, bringing the total dividend for 2002 to S$0.15, unchanged from 2001.

($1=1.746 Singapore dollars)