Krakatau Steel Nets US$117.4mn Loss

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  • TEMPO.CO, Jakarta - State-owned steel producer PT Krakatau Steel (Persero) Tbk. posted a net loss of Rp1.41 trillion (US$117.4 million) in the third quarter of 2014, year-on-year (YOY). The main cause of the profit loss is a 13.3-percent revenue decline to US$1.36 billion, a loss that got bigger after the company posted a net loss of US$88.7 million in the first half of this year.

    President director Irvan K. Hakim said the company's revenues dropped following a 12-percent dip in steel sales in local markets. Revenues from the hospitality and real estate businesses also plunged 64 percent.  

    Because of the poor financial performance, Krakatau Steel's vendors plan to cut the number of its employees. Corporate secretary Iip Arief Budiman said the declining steel demand has resulted in an oversupply of steel products—a trend that has been going on for two years.

    The increases in electricity tariff, gas prices, and labor wages are also weighing the company. "We have to resort to efficiencies in various sectors," IIp said in a written statement to the Indonesia Stock Exchange last August.