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AKARTA: State electricity utility announced that it recorded Rp 11.7 trillion (US$1.29 billion) in net profits in 2011, up 16 percent from Rp 10.09 trillion in 2010.

The company said in a press statement that the 8 percent margin the government gave to the company as compensation for distributing subsidized electricity was the main contributor to the profit increase.

“The margin is given so that PLN can have flexibility in looking for funds for investments in expanding the electricity network in Indonesia,” read the statement.

By the end of 2011, the country’s electrification ratio was 72 percent, which meant that 28 percent of the population still had no access to electricity. Therefore, further investments are necessary to provide more power access.

“Subsidies from the government is only enough to cover lack of operational costs because the power price of Rp 720 per kilowatt-hour [kWh] is still below its production cost of Rp 1,267 per kWh,” the company explained.

Last year, the company’s revenues reached Rp 213.9 trillion, soaring 31.7 percent from Rp 162.4 trillion in 2010, while its expenditures hit Rp 192.6 trillion, up 30 percent from Rp 149.1 trillion. The increase in expenditures was caused by growing electricity consumption.

As of Dec. 31, PLN’s total asset value was recorded at Rp 433.8 trillion, rising Rp 64.2 trillion or 17.4 percent from a year earlier.