Mon, 11 Jun 2001

Ailing Indoexchange takes further cost-cutting step

JAKARTA (JP): PT Indoexchange Dotcom, one of the few dotcom companies listed on the local stock exchange, has taken major cost-cutting measures to cope with acute financial problems.

Company president Eddie Daradjat said here over the weekend that Indoexchange would cut employee salaries as part of its business consolidation measures.

He said that the company had also relocated its office to Jalan Iskandarsyah in South Jakarta from Jalan Sudirman, one of the capital's most expensive area.

The measures were made following a 64 percent increase in the company's losses amounting to Rp 1.8 billion (US$162,000) during the first quarter of this year from Rp 1.1 billion in December last year, he said.

"We have to do it to help the company meet this year's profit target," he was quoted as saying by Antara news agency, following a meeting with officials of the Jakarta Stock Exchange (JSX).

Eddi said that details of the company's consolidation measures would be announced during an annual shareholders meeting on June 26.

Although the company suffered a big loss during the first three months, he said he was optimistic the company was still able to reach this year's financial target .

"It (the loss) doesn't indicate that we will not be able to reach the target because we are still receiving orders" he added.

IndoExchange, which commenced operation in September 1996, listed its shares on the JSX and the Surabaya Stock Exchange (SSX) on May 17, 2001.

The company provides a financial news portal service, web solutions and a business-to-business (B2B) portal as its main businesses.

Its portal, launched in September 1996 as its first service, now claims to have more than 92,000 registered users, 60 percent of which are from Indonesia, 14.5 percent from the U.S. and the rest from other parts of the world.

The B2B division, launched last year, is represented by NexiaOnline and MiningIndo. NexiaOnline is targeting the textile industry, while MiningIndo is a mining portal for business and news exchange on the Indonesian mining industry and related organizations.

At present, the company provides information technology consulting to several companies including Dana Wibawa, Bahana, Japan Foundation, Makes Law Firm and Lippo Securities.

The JSX suspended trading of the company's shares on Friday due to the company's worsening financial performance.

Commenting on the suspension, Eddie said the disciplinary measure would obviously damage the company's image.

Clients might terminate their contracts due to the suspension, he said, adding that if the penalty was not lifted, the company's financial problems might worsen. (05)