Posted on 06 Nov 2015
State-run steel maker Krakatau Steel
announced on Wednesday that the publicly listed company had revalued its assets
and increased its book value by more than US$1 billion.
Krakatau Steel, according to a statement published in the Indonesia Stock
Exchange (IDX), gained $1.1 billion after revaluing its assets. Its fixed and
other assets stood at $1.13 billion as of the end of September, far above the
$33.55 million before the revaluation.
The gains, the company said in the statement, came from revaluing Krakatau
Steel and its subsidiaries’ land assets located in Cilegon, Banten and in other
areas in Greater Jakarta.
The move was made on the heels of a tax relief offered for any companies that
revalued their assets during certain periods, as stipulated in the government’s
fifth economic package announced last month.
Those that apply for the asset revaluation before year-end will be eligible for
a 3 percent tax rate, down from the current 10 percent. The tax rate will be
set at 4 percent for those that apply for the revaluation between January and
June 2016, and at 6 percent for the period of July to December 2016.
By revaluing their assets, companies and individuals can expect to see the
value of their assets increase, thus creating greater room or leverage for them
to access external financing.
Krakatau Steel is heading to end in the red for four consecutive years,
recording $160.25 million of net losses during the first nine months of this
year, up from $114.73 million last year, as steel prices remain weak and new
subsidiary Krakatau Posco has yet to book positive cashflow. The company’s
revenue slipped by 26.96 percent year-on-year to $993.38 million by the end of
September.
