PGN reports lower profit despite higher sales
Abdul Khalik, The Jakarta Post, Jakarta
Publicly listed gas distribution company Perusahaan Gas Negara (PGN) reported on Friday a lower net profit in 2003 despite higher sales.
PGN president WMP Simanjuntak said that profit for the year was Rp 519 billion (around US$61 million), compared to Rp 1.12 trillion in 2002.
He said that the higher profit in 2002 was mainly attributed to the extraordinary gain of Rp 876 billion from the sale of shares in a subsidiary.
If the 2002 one-time gain is excluded, PGN profit in 2003 would have increased by 17 percent.
PGN enjoyed a 14.1 percent increase in sales last year to Rp 3.6 trillion, while profit from operations rose by 2 percent to Rp 823 billion as the volume of gas it sold increased to 262.1 million cubic feet a day, up 9.9 percent compared to the previous year's sales.
Simanjuntak also said that the company incurred higher expenses last year, up 18 percent to Rp 2.764 trillion due to price increases for raw material.
The increase in sales will make it easier for the company to sell as much as US$350 million in dollar-denominated bonds in October to raise money for expansion. It will be the second bond issue this year.
The company plans to boost its natural gas sales to 600 million cubic feet a day by 2006 and to 900 million cubic feet a day by 2009.
To realize these targets, PNG had previously announced its plan to build a 180-kilometer pipeline linking South Sumatra province with West Java using the money from the planned bonds proceeds.
Simanjuntak said that the company could increase its sales to 27 percent once the new pipeline becomes operational in 2006.
He said that the increase in steel prices might affect the company's projected cost for the planned project but he predicted that the pipe prices would eventually go down by July.
Simanjuntak was optimistic that the company's share price could also jump to over Rp 2,000 by July because a boost in company sales and income is expected at the end of the first semester.
PGN shares, which have dropped by 9.7 percent in value since their initial public offering in December, were unchanged at Rp 1,400 on the Jakarta Stock Exchange on Friday.
As a result of this satisfactory performance, the company also plans to give a maximum dividend of 50 percent to its share holders in the upcoming general shareholders meeting in May.