June 16, 2020 Read More →

Weakening rupiah leads to $2.8B loss in first quarter

The Jakarta Post:

State-owned electricity company PLN’s bottom line has plunged into the negative in this year’s first quarter after the rupiah exchange rate fell to a record low in March.

PLN booked a net loss Rp 38.9 trillion (US$2.76 billion) in the January to March period, down from a net profit Rp 4.12 trillion in the same period last year, the company’s financial report showed.

The net loss was driven by first quarter foreign exchange losses of Rp 52 trillion, down from a gain of Rp 4 trillion in the same period last year.

The rupiah fell as low as Rp 16,575 against the United States dollar in March, the lowest level since the 1998 financial crisis, before rebounding to around Rp 14,000 in June. [Max Hall]

Meanwhile, expenses rose by a steeper 7 percent to Rp 78.89 trillion, led by higher payments to Independent Power Producers (IPP), particularly those that operate large coal-fired power plants (PLTU).

“Payments to IPPs will rise, especially if more large-scale PLTUs begin commissioning this year,” added Elrika, a researcher with the Ohio-based Institute for Energy Economics and Financial Analysis (IEEFA).

PLN guaranteed buying power from IPP-owned coal plants to incentivize electrification, at the behest of the government. However, the incentive has become a burden for PLN as the electricity company struggles to sell the electricity.

[Norman Harsono]

More: PLN books $2.8b loss in Q1 amid weakening rupiah

Posted in: IEEFA In the News

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