Textile firm loses Rp 25 billion
Textile firm loses Rp 25 billion
JAKARTA (JP): A fire, high interest on loans and a decline in
operating income have brought losses of Rp 25.2 billion (US$11.7
million) to PT Pan Brothers Tex, a garment manufacturer listed on
the Jakarta Stock Exchange.
The company's president, Jimmy Sumitro, told shareholders at
an annual meeting here yesterday that the fire in June 1993
inflicted damages amounting to Rp 23.4 billion.
He said the company's spending for debt interest increased to
Rp 5.7 billion last year from Rp 4.23 billion in 1992, while its
operating income fell sharply to Rp 3.89 billion from Rp 15.87
billion.
In response, the shareholders approved the company's proposal
to issue rights shares to generate Rp 80 billion in fresh funds
for the purchase of new facilities for the production of woven
garments, to establish domestic retail outlets and to increase
working capital.
Jimmy refused to specify the time for the rights issue because
it is still under discussion.
He projected that with the new production facilities, the
company will be able to increase its sales revenues from Rp 108.6
billion last year to Rp 161.3 billion next year and its before-
tax profit from Rp 11.7 billion to Rp 30.3 billion.
The rights issue is also expected to speed up the company's
financial recovery and improve its capital structure.
Sales
The fire also made it impossible for the country to reach the
1993 sales target of Rp 93.75 billion. Its sales revenues reached
only Rp 65.3 billion, a sharp decrease from Rp 82.9 billion in
1992.
Jimmy said that the fire loss was the reason the company
postponed the payment of a dividend for 1993 operations. He
pledged that dividends will be paid for 1994 because the total
loss from the fire was accounted for in the bookkeeping for the
1993 fiscal year.
The fire accident has also delayed the company's plan to enter
the domestic garment market.
Established in 1980, Pan Brothers produces garments with
international brand names such as Christian Dior, Esprit, Adidas
and Van Heussen. It has become a supplier of some world renowned
department stores like J.C. Penney and Marks & Spencer.
Pan Brothers, with its 4,209 workers, has an annual production
capacity of one million dozen garments, most of which are
exported to the United States and western European countries.
In 1993, 39.3 percent of the company's products were exported
to West Europe, 35.7 percent to the United States, 19.1 percent
to Japan, 2.6 percent to Canada, 8 percent to East Europe and the
remaining 2.9 to other countries.
The total assets of the company, which gained a profit of Rp
8.54 billion in 1992, decreased from Rp 131 billion in 1992 to Rp
96 billion in 1993. (03)