Barito Pacific's income drops by 62.5 percent
JAKARTA (JP): PT Barito Pacific Timber, a publicly-listed wood-based company, announced yesterday a 62.5 percent decline in net income for the first semester of 1995 and a 13.4 percent fall in revenues.
The company said in a statement made available to The Jakarta Post that the decline in the company's net revenues to Rp 411.16 billion (US$180.89 million) in the first semester of this year was mainly caused by a 9.8 percent decrease in the company's sales volume. They fell to 558,387 cubic meters from 618,955 cubic meters in the corresponding period of last year. He also attributed the decline to a 6.8 percent decrease in the average selling price of its products to $328.47 per cubic meter from $352.49.
The decline in the net income was due to lower net revenues, higher costs of goods sold and increasing expenses for general and administrative affairs.
The company also associated the losses with the introduction of the Statement of Financial Accounting Standards by the government earlier this year.
The new standards, the statement said, have led the company to change its accounting policies in the amortization of pre- operational expenses and in listing unprofitable expenses which cannot be capitalized as losses.
The new standards also stipulate that all general and administrative expenses which are not related to forestry activities should be listed under general and administration expenses, requiring companies to absorb the losses of their affiliates, which are engaged in timber estate development, in proportion to their percentage of equity.
According to the statement, the new regulations have caused the company's expenses for general and administration affairs to increase by 9.2 percent and prompted the company to absorb part of the losses incurred by its subsidiaries, PT Tanjung Enim Lestari, PT Rimba Equator Permai, PT Anangga Pundinusa, PT Kirana Cakrawala and PT Kalpika Wanatama.
The losses and the declining performance of Barito's subsidiaries, PT Sumalindo Lestari Jaya, PT Suryaraya Wahana and PT Enim Musi Lestari, have all contributed to the lower net income.
The price of plywood, the company's major product, fell from $398.91 per cubic meter in the first semester of 1994 to only $346.55 per cubic meter in the corresponding period of this year, reaching their lowest level of $323.4 per cubic meter in January.
According to the statement, the company has managed to lower the cost of logs -- the main raw material for its plywood mill -- by 3.6 percent in spite of a raise in mandatory forest royalties and other operational expenses.
This was made possible by improving the efficiency of the company's logging and manufacturing operations, the statement said. (pwn)