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Pan Brothers posts 2023 loss amid cash flow trouble
In March, Fitch Ratings downgraded Pan Brother’s rating from C to restrictive default after the textile firm failed to make a $6.5 million coupon payment on notes.
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Employees work at a garment company in Central Java pictured in an undated photo. (Central Java Regional Government/-)
Publicly listed garment company PT Pan Brothers posted a 15.7 percent decrease in revenue at US$581.6 million last year.
The firm was able to cut its cost of goods sold (COGS) and slash selling and administrative expenses but despite those efficiency measures closed the year with a $1.22 million loss.
That comes after a $3.68 million profit achieved in 2022.
Pan Brothers is one of the country’s largest garment manufacturers with a production capacity of 117 million pieces a year. Exports represent 95 percent of its total sales, with major clothing brands such as Adidas and Uniqlo among its customers.
The firm explained in February that it was suffering under the impact that imports of cheap goods had had on the country’s textile sector.
Similarly, National Federation of Trade Unions (KSPN) president Ristadi said an influx of imported products had eroded sales to the domestic market while at the same time, the country experienced weak export demand.
He claimed that at least 10 textile factories had laid off staff last year, with an estimated 12,000 people put out of work.
