Indosiar sees 10-15% revenue growth this year<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Publicly listed television company PT Indosiar Visual Mandiri,
\nwhich broadcasts the Indosiar television network, said on
\nThursday that its revenue was expected to grow by between 10
\npercent and 15 percent this year alongside an increase in
\ncorporate advertisements.<\/p>\n
Indosiar finance director Phiong Phillipus Darma said
\nadvertisement spending this year was projected to be higher than
\nlast year, as business activities were expected to remain robust
\namid confidence that the general election would be peaceful.<\/p>\n
Phiong said according to consultant firm AC Nielsen,
\nadvertisement spending last year increased by around 20 percent
\nto Rp 16.79 trillion (US$1.97 billion) and this year, growth in
\nadvertisement spending would be at least the same as last year.<\/p>\n
The company's revenue rose to Rp 1 trillion last year, from Rp
\n980 billion in 2002. However, its net profit plunged by around 50
\npercent to Rp 101 billion.<\/p>\n
Indosiar president Handoko said the decline in profit was
\nprimarily attributable to higher expenses in producing high-
\nrating TV programs in order to maintain its audience share.<\/p>\n
He explained that the company had to come up with better
\nprograms to compete in the television sector, which was jam-
\npacked with 11 television companies that broadcast nationwide.<\/p>\n
\"Our spending for programs surged by 31 percent to Rp 589
\nbillion last year, from Rp 447 billion in 2002,\" said Handoko.<\/p>\n
A decline in audience share will, in turn, negatively affect
\nthe advertising revenue of the company, which was once controlled
\nby the Salim Group.<\/p>\n
In regards the company's plan to delist from the stock market
\nand establish a holding company to accommodate a larger ownership
\nfor foreign investors, Handoko said Indosiar expected the plan to
\nbe realized this year.<\/p>\n
The company is facing difficulties in procuring funds from
\nforeign investors, as the existing regulation limits the maximum
\ndirect ownership of a foreign company in a local TV station to 20
\npercent.<\/p>\n
Indosiar has decided that shareholder PT Indosiar Karya Media
\n(IKM), which currently holds 27.74 percent of its shares, would
\nbecome the holding company.<\/p>\n
Handoko said IKM would be listed on the Jakarta Stock Exchange
\nin place of Indosiar Visual Mandiri. Foreign investors could then
\ninvest in the TV station indirectly through the holding company.<\/p>\n
Many believe that the move aims to pave the way for the Salim
\nGroup to reacquire its controlling stake in Indosiar through its
\nspecial purpose vehicle company, which is registered aboard.<\/p>\n
Phiong did not dismiss the rumors, saying only that: \"We have
\nno idea that the Salim Group has plan to reenter the company. It
\nis not a problem for us (if Salim takes over)\".<\/p>\n
Indosiar, which broadcasts in 130 cities throughout the
\ncountry via 22 relay stations, plans to spend Rp 100 billion in
\ncapital expenditure this year, most of which will be used to
\nbuild new relay stations to cover three additional network
\ncities.<\/p>",
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