State power utility PLN is the biggest loser among state firms after more than doubling its losses to Rp 13.1 trillion (US$1.14 billion) from a year earlier.

The biggest contributor to the increased losses was the company's huge foreign exchange loss amid a weakening rupiah, according to Said Didu, the secretary to the State Minister for State Enterprises.

In 2007, the company suffered close to Rp 6 trillion in losses.

"PLN suffered around Rp 10 trillion from currency exchange losses alone, and there's also a problem with the electricity subsidy system," Said told reporters on Wednesday.

The rupiah lost around a quarter of its value last year, weighing heavily on the company's debt-servicing costs, Said added.

Despite the poor figures however, Said stressed that he was still fairly pleased with PLN's performance last year as the company managed to meet the ministry's targets.

"Last year, PLN's operational profits reached Rp 1.5 trillion," he pointed out.

State Minister for State Enterprises Sofyan Djalil, Minister commenting on the overall loss, said that it was not because of mismanagement, but rather reflected electricity pricing policy, in addition to the massive negative impact of the forex losses. These forex losses partly reflected the need to repay overseas loans denominated in dollars.

PLN president director Fahmi Mochtar said that currently, PLN sells electricity at an average price of Rp 650 per kilowatt-hour (kWh), which is a lower price than the company's average production cost.

Fahmi added however that it is possible the company may make a profit this year - which would be the first-ever since its establishment - as it has been able to cut its average production cost to Rp 1,022 per kWh due largely to lower fuel oil prices and reduced consumption of oil-based fuels.

In 2009, PLN plans to produce 136,000 gigawatt-hours (GWh) of electricity, 6.6 percent higher that the 127,600 GWh in 2008.

Of this total production, 17.8 percent will be from oil-based fuel power plants, significantly down from 23 percent last year.

Through converting more oil-fired power plants to generation from coal and gas, PLN expects to be able to cut its oil-based fuel consumption from 11 million kiloliters in 2008 to 7.9 million this year.

With fuel costs declining from Rp 111 trillion last year to Rp 79 trillion in 2009, the company also targets to book a record breaking Rp 1.7 trillion in net profits this year.

Based on the company's business program for 2009, presented earlier this year, it targets sales revenue to rise to Rp 89 trillion from Rp 79 trillion booked in 2008, with operating profits forecast to reach Rp 10.1 trillion from Rp 1.5 trillion last year.

PLN has in the past consistently been one of the biggest loss-making state companies.

With last year's huge losses, it means that PLN contributed more than 90 percent of the losses suffered by all the country's state enterprises during the same period.

"Last year, there were 23 SOEs that suffered losses accumulating to around Rp 14 trillion, of which, PLN contributed about Rp 13.1 trillion," Said explained.

Apart from PLN, there were three other SOEs that made significant losses last year.

"Last year, state airline operator PT Merpati Nusantara booked around Rp 568 billion in losses, state paper company PT Kertas Kraft Aceh booked around Rp 150 billion, while state shipping company PT Jakarta Lloyd suffered Rp 150 billion," Said added.

Overall, aside from 23 loss-making state owned enterprises, state firms booked a total of about Rp 75 trillion in 2008 in unaudited profits, a rather lower performance than the projected Rp 81 trillion.

The estimated aggregated 2008 net profits were only a 4.7 percent increase on those of 2007.

However from 2006 to 2007, state enterprises recorded a 32 percent growth in net profits. (fmb)

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