Indosiar suffers 50% drop in profit<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
Publicly listed television company PT Indosiar Visual Mandiri,
\nwhich runs Indosiar television network, reported on Tuesday over
\na 50 percent decline in unaudited net profit for 2003, mainly due
\nto higher operating costs.<\/p>\n
In its report to the Jakarta Stock Exchange (JSX), the company
\nsaid that its profit plunged to Rp 101 billion (US$11.8 million)
\nlast year from Rp 205 billion in 2002, although it enjoyed
\nrelatively strong revenue from its operations.<\/p>\n
The company's revenue went up to Rp 1 trillion from Rp 980
\nbillion. However, its operating income dropped to Rp 201 billion
\nfrom Rp 346 billion.<\/p>\n
Indosiar first went on air in 1995.<\/p>\n
The company's corporate secretary Andreas Ambessa said the
\nmanagement would make a public announcement to investors and
\nmedia on Thursday to explain the company's performance.<\/p>\n
Analysts have previously projected that Indosiar would book a
\nlower net profit in 2003 because it had to spend more money to
\nbuy or produce high-quality programs, which were expensive, in
\norder to maintain its audience share.<\/p>\n
A decline in audience share will, in turn, affect the
\nadvertising revenues of the company, which was once controlled by
\nthe Salim Group.<\/p>\n
The analysts said that Indosiar had to come up with better
\nprograms to deal compete in the country's television sector,
\nwhich was jam-packed with 11 television companies that broadcast
\nnationwide, and four television firms with provincial coverage.<\/p>\n
Indosiar, which has eight studios in Jakarta, Purwakarta and
\nCikampek, has a coverage in 130 cities throughout the country via
\n22 relay stations.<\/p>\n
In a bid to increase profits this year, the company said in
\nits report that it planned to launch a cost containment program,
\ndevelop new artists, undergo operation restructuring and broaden
\ncoverage areas.<\/p>\n
The company's shares on The Jakarta Stock Exchange ended down
\nby Rp 25 to Rp 550 on Tuesday's trading.<\/p>\n
Since last year, several TV stations have reported lower
\nprofit due to the stiffer competition. In fact, some of them
\nhave planned to invite foreign investors in a bid to strengthen
\ntheir performance, but existing regulation limits foreign
\nownership in local TV station at 20 percent, a factor that is
\ndiscouraging foreign investment in the sector.<\/p>",
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