Plywood producer reports 63% profit plunge
JAKARTA (JP): PT Sumalindo Lestari Jaya, a plywood producer controlled by PT Astra International and PT Barito Pacific, said that its net profit dropped again by 63 percent to Rp 11 billion (US$4.6 million) last year.
The management claimed that a decline in interest revenues and a change in accounting standards were the major reasons for the firm's disappointing performance.
"The implementation of a new accounting standard for the treatment of preoperational expenses increased our operating expenses to Rp 36.6 billion last year from Rp 25 billion in the previous year," the company's president, Winarto Oetome, announced yesterday.
The new accounting standard requires the amortization of preoperational expenses over a period of three years instead of the 15 years previously allowed.
"Of the total operating expenses, Rp 6.5 billion was for the amortization of preoperational spending and Rp 2.5 billion was the cost of an initial public offering," Winarto added.
He said the company's interest revenues also dropped significantly from Rp 21 billion in 1994 to only Rp 10 billion last year in line with a decrease in the company's bank deposits.
"We used part of our time deposits to finance the establishment of our medium density fire-board plant in Tanjung Harapan, East Kalimantan, last year," he added.
The company's annual report shows that Sumalindo witnessed a weakening performance in the last two consecutive years.
Its net sales rose from Rp 237 billion in 1994 to Rp 251 billion last year, but last year's figure was still far below 1993's level of Rp 267 billion.
The firm's before-tax profit, which sharply declined from Rp 99 billion in 1993 to Rp 42 billion in 1994, inched up to Rp 49 billion last year.
Revenues from operations dropped from Rp 78 billion in 1993 to Rp 17 billion in 1994 and to Rp 13 billion last year.
Net profits also declined from Rp 36 billion in 1993 to Rp 32 billion in 1994 and to Rp 11 billion last year.
Winarto denied the assumption that the company may have been affected by the shortage of raw material which hit forestry-based industrial firms last year.
"We now manage concession rights of over 710,000 hectares of natural forests and 43,000 hectares of industrial forests," he contended.
Winarto also said that in the first quarter of this year, the company gained net profits of Rp 2.5 billion, the same level as that recorded in the same period of last year, in spite of a 20 percent increase in sales to Rp 64 billion from Rp 53 billion.
Sumalindo was listed on the Jakarta Stock Exchange in March 1994 after raising funds of Rp 213 billion from its initial public offering. (alo)