PLN?s net profit drops on lower electricity selling price

State-owned electricity company PT PLN saw its net profit last year fell by 32.69 percent to Rp 10.5 trillion from Rp 15.6 trillion in the previous year primarily due to lower selling price of electricity.

?This (the lower net profit) is mainly because PLN continues to provide competitive (electricity) tariff to the public and businesses,? PLN said in a statement on Wednesday unveiling its 2016 audited financial report.

The company said that its average electricity selling price last year fell to Rp 994 per kWh from Rp 1,035 per kWh in the previous year. PLN, however, said that various efficiency measures including substituting fuel oil with coal and other cheaper source of energy have managed to prevent massive erosion of the profit.

PLN said that the lower net profit last year was also because the company participated in the government?s tax amnesty program, which resulted in significant increase in the 2016 tax burden.

PLN, however, reported improving operating performance last year. Electricity sales value last year increased by 2.05 percent to Rp 214.1 trillion from Rp 209.8 trillion in the previous year. This was contributed by a 6.49 percent increase in sales volume to 216 TWh from 202.8 TWh.

The higher sales volume was in line with the success by PLN in providing 3,714 MW of additional power capacity, comprising of 1,932 MW from own power plants, and 1,782 MW from power plants operated by independent power producers. PLN also managed to complete the development 2,859 kms of transmission lines and 14,123 MVA of substations.

Meanwhile, PLN said that the number of customers last year increased to 64.3 million from 61.2 million in the previous year. This has increased the national electrification ratio to 91.16 percent by end of 2016 from 88.3 percent in 2015, exceeding the 90.15 percent target set in the 2015-2019 electricity procurement business plan (RUPTL).

PLN said that EBITDA last year increased to Rp 57.99 trillion from Rp 51.49 trillion in the previous year, reflecting improving capacity of the company in making new investment with internal funds and capacity in repaying debts.

Elsewhere, PLN said that asset revaluation measure conducted by the company has expanded room for it to make new borrowings to help finance the development new power plants set under the government?s 35,000 MW five-year program. PLN?s portion in developing the new power plants under the program will require investment of about Rp 600-700 trillion.

Editing by Reiner Simanjuntak