Telkom's first half profit drops 18.7%<\/p>\n
Tony Hotland, Jakarta<\/p>\n
Publicly listed telecommunications firm PT Telkom said on Friday
\nfirst half net profit dropped by 18.7 percent compared to the
\nsame period last year due to foreign exchange losses and a higher
\ninterest rate burden.<\/p>\n
Telkom president Kristiono said that net profit in the first
\nsemester ending June 30 declined to Rp 2.87 trillion (US$312.46
\nmillion) from Rp 3.53 trillion in the first half of 2003.<\/p>\n
"The drop in profit is largely caused by the depreciation of
\nthe rupiah as we have debts in foreign currencies, mostly in the
\nU.S. dollar," Kristiono said after the company's shareholders
\nmeeting.<\/p>\n
Telkom suffered some Rp 869.81 billion in foreign exchange
\nlosses during the semester.<\/p>\n
The firm's outstanding debts in foreign currencies are
\nestimated at $800 million.<\/p>\n
"However, the loss is just seasonal as our total revenue
\nincreased by 27 percent to Rp 16.1 trillion, so the company is
\nshowing good performance. We believe the loss would have been
\nmuch less if the rupiah had strengthened against the U.S.
\ndollar," he explained.<\/p>\n
The rupiah has been under pressure due to a combination of
\nrising political uncertainty at home amid the elections and a
\nrising interest rate trend in the U.S., which had prompted some
\npeople to switch investments from local assets to dollar-based
\nassets.<\/p>\n
Telkom's total revenue surged by 27.9 percent to Rp 16.1
\ntrillion in the first half, led by big gains in its fixed-line
\nand cellular services.<\/p>\n
The shareholders meeting also approved the company's plan for
\na two-for-one stock split (one old share splits into two new
\nshares). The split will double the number of the firm's shares to
\n80 million shares. The split will also halve the nominal value of
\na share to Rp 250.<\/p>\n
"The split is expected to increase the liquidity and the trade
\nvolume of Telkom's shares, which has been declining over the last
\nyear, as the shares will be more affordable for people." said
\nKristiono.<\/p>\n
The meeting also approved Telkom's 2003 financial report.
\nProfit dropped by 24.29 percent to Rp 6.09 trillion from the
\nprevious year.<\/p>\n
Half of the profit will be used to pay dividends, which means
\nRp 301.94 per share, and the rest will be allocated for
\ninvestment (48 percent) and internal cash reserves (2 percent).<\/p>\n
Telkom management had previously proposed a 40 percent
\ndividend payout, but the government as a major shareholder
\ndemanded a 50 percent dividend.<\/p>\n
Kristiono said that Telkom's planned capital expenditure for
\n2004 was about Rp 8.9 trillion, with some Rp 3.9 trillion to be
\ncontributed by Telkom's long-term investments with its joint-
\noperation (KSO) partners.<\/p>\n
Telkom's shares remained unchanged on Friday from the previous
\nday, closing at Rp 7,750.<\/p>",
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