Other Expenses Soar, PLN Profit Plunges 72 Percent

PT Perusahaan Listrik Negara (Persero) (PLN)'s net profit plummeted 71.78 percent to Rp 2.25 trillion in the first half of 2017, compared to Rp 7.97 trillion in the same period of the previous year. This decline in PLN's profit was triggered by a surge in other expenses and foreign exchange losses incurred by the state-owned company.

According to the published financial report, PLN's other expenses in the first half of this year increased by 526.65 percent to Rp 4.05 trillion from Rp 646.4 billion previously. This caused a significant drop in the state-owned company's profit. Furthermore, foreign exchange losses of Rp 222.6 billion, compared to a foreign exchange gain of Rp 1.9 trillion in the previous period, also eroded its profit in the first six months of this year.

Currently, there are reports circulating about PLN's potential inability to fund its investments from operating cash flow. There are also concerns about a potential short-term debt default due to the large amount of debt coming due.