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)