PLN suffers Rp 15t loss in first-half

JAKARTA (JP): State electricity company PT PLN suffered a net loss of Rp 14.99 trillion (US$1.3 billion) for the first half of this year compared to a net profit of Rp 720 billion in the same period of 1997.

The company's consolidated financial statement for the period from January to June this year shows a foreign exchange loss of Rp 12.84 trillion, much higher than the Rp 85.56 billion loss reported in the first half of 1997.

The 1998 half-yearly financial results were based on a rupiah exchange rate of Rp 14,975 to the dollar, while the 1997 results were based on an exchange rate of Rp 2,474 to the dollar.

Net sales were placed at Rp 6.46 trillion for the first six months of this year, up 25 percent on the Rp 5.17 trillion recorded in the same period last year, the company announced Saturday.

Operating costs soared to Rp 7.3 trillion in the first half of this year, from Rp 4 trillion in the same period of 1997.

The company said its debts totaled Rp 49.8 trillion during the first half of this year, of which Rp 12.4 trillion was held in the form of short-term loans.

The monetary crisis has severely affected PLN because it receives its earnings in rupiah but pays most of its operating costs in U.S. dollars. Its operating costs include the purchase of fuel, power supplied by Independent Power Producers (IPPs) and spare parts for its transmission network and generating plants.

PLN has projected that it will need to spend $590 million on buying gas and another $400 million buying power from IPPs in the current fiscal year which ends in March 1999.

It also expects to spend $79 million on the purchase of geothermal steam from contractors to the state oil and gas company Pertamina, $288 million to purchase spare parts and another $103 million servicing its debts.

The company has projected a loss of Rp 11 trillion in the 1998/1999 fiscal year assuming no power price increases and an average exchange rate of Rp 6,000 to the dollar.

The loss will increase by Rp 1 billion for every Rp 1,000 by which the rupiah's actual U.S. dollar exchange rate exceeds the rate assumed in the forecast.

The government, aware of the company's problems, announced a 20 percent increase in power prices in May and planned follow up increases of 18 percent in August and 20 percent in November.

But the government later annulled the May price increase for domestic consumption following a public outcry and delayed the price increase planned for August.

PLN has tried to renegotiate the price at which contractors supply power and gas prices to improve its financial performance, but its efforts thus far have brought no results.

Minister of Mines and Energy Kuntoro Mangkusubroto has said President B.J. Habibie will issue a decree assigning Coordinating Minister for Development Supervision and Administrative Reforms Hartarto to negotiations with IPPs and gas contractors later this week. (jsk)