Asahimas: 9-month net profit down 99%

PT Asahimas Flat Glass saw its net profit for the nine months to September 2006 fall 99% to IDR 2.49 billion from IDR 199.54 billion the previous year mainly because of a huge jump in fuel costs and w…

PT Asahimas Flat Glass saw its net profit for the nine months to September 2006 fall 99% to IDR 2.49 billion from IDR 199.54 billion the previous year mainly because of a huge jump in fuel costs and weaker sales, corporate secretary Hendrik Adrianto said. Sales dropped 14% to IDR 1.13 trillion in the first nine months from IDR 1.31 trillion in the same period 2005, while gross profit fell 57% to IDR 201.92 billion from IDR 472.97 billion previously due to higher production costs. A rise in operating expenses further depressed the operating profit to IDR 9.44 billion from IDR 286.70 billion previously. Mr. Adrianto said that since April 2005, the company“s fuel cost has gone up around 120% after the government removed its subsidy on fuel products for industrial users. “Energy cost made up 40% of the cost of goods sold, with fuel accounting for 80% of our energy sources”, he said. Before the fuel price hike, energy costs accounted for just about 25%. Mr. Adrianto also said Asahimas is facing tougher competition in the local market with the entry of cheaper flat glass products from China and weaker demand for safety glass due to declining car sales.