Jamsostek net profit drops sharply in 2003

The Jakarta Post, Jakarta

The net profit of state-owned PT Jamsostek fell drastically by almost 95 percent to Rp 535.2 billion (US$55.7 million) in 2003 from Rp 982.6 billion in 2002 due to the country's prolonged economic hardships and recent change in the company's accounting system.

Jamsostek president Achmad Junaidi said here on Wednesday that the increase in the number of new participants in social security programs reached only 1.5 million, only 30 percent of the 2003 target, while thousands of workers had quit the programs following their dismissal as many companies either closed down or shrank their operations due to the current weak economic conditions.

"More than 90 percent of the thousands of workers dismissed in 2003 quit the social security programs and took back their contributions to the provident fund program (JHT)," he said during a press conference after the company's shareholders meeting.

He said further that the management had changed the company's accounting system to put aside a larger part of annual profits for workers who were actually the main shareholders in the social security programs.

"The company decided to return the greater part, or almost Rp 2.5 trillion, of its 2003 gross profit of around Rp 3 trillion to the workers," he said, citing that the company had returned only Rp 1.8 trillion of its 2002 gross profit, which had reached Rp 2.8 trillion.

He added that with the new accountancy policy, Jamsostek was paying less in dividends to the government in its capacity as the main shareholder of the company.

Jamsostek paid only 25 percent, or Rp 130 billion, of its 2003 profits as a dividend to the government.