Barito's profits drop by over 50 percent

Barito's profits drop by over 50 percent

JAKARTA (JP): The net income after tax of timber giant PT Barito Pacific Timber plunged by over 50 percent to Rp 147.17 billion (US$67 million) last year, from Rp 310.15 billion in 1993.

The company announced yesterday that, as a consequence of the 1994 result, net income per share would be more than halved to Rp 105, down from Rp 253 in the previous year.

The company attributed the sharp drop in net earnings to a lower gross profit margin resulting from lower prices, higher costs for logs, and higher expenses generally.

"At the same time, the company's tax rose, with the effective rate up 43.3 percent, reflecting the combined impact of no more tax losses carried forward and a reduction in the tax write-off attributable to the amortization of the go-public expense," the company said in the statement.

Excluding the sum of Rp 13.39 billion generated by Barito's non-timber subsidiary, PT Griya Idola Real Estate, net revenues from the timber sector for 1994 totaled Rp 861,98 billion, a decrease of 11.92 percent over the previous year.

The decrease was mainly due to a 14.67 percent decrease in the average selling price of all products from US$391.87 per cubic meter in 1993 to $334.4 per cubic meter in 1994, and partly due to a drop in sales volume, from 1.18 million cubic meters in 1993 to 1.17 million cubic meters in 1994.

Plywood prices were sharply corrected in 1994 after reaching record highs in the previous year. The drop was triggered by weaker demand and increasing competition in Barito's major overseas markets.

The price of Barito shares, which are listed on Jakarta and Surabaya stock exchanges, have dropped more than 30 percent from Rp 3,600 in January to Rp 2,675 early this week on the company's weakened performance.

The company's management, however, is confident that 1995 will be a better year, in line with an improvement in market conditions in Japan.(hen)