Barito Pacific's income drops by 62.5 percent
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)