Excelcomindo expects loss to widen

Excelcomindo expects loss to widen

Naila Firdausi, Bloomberg/Jakarta

PT Excelcomindo Pratama, Indonesia's third-biggest cellular company, expects its net loss to widen this year as a weakening rupiah makes its dollar-denominated debt more expensive to repay.

Jakarta-based Excelcomindo said net loss in 2005 may widen to Rp 204.63 billion (US$20 million) from Rp 45.3 billion in 2004, the company said in a statement to the Jakarta Stock Exchange published on Wednesday by the exchange.

The company may post a currency loss of Rp 311 billion this year from Rp 274 billion last year. Sales will probably rise to Rp 3.7 trillion from Rp 3.13 trillion in 2004 as the number of subscribers grows, the company said.

Excelcomindo, partly owned by Malaysia's Khazanah Nasional Bhd., must spend more in rupiah for the $350 million in bonds its unit sold in 2004 as the currency declines against the dollar. The rupiah has lost 7.8 percent this year, Asia's second-worst performing currency, extending its 9.2 percent decline in 2004.

Excelcomindo assumes the rupiah will average 10,000 to the dollar this year and the next two years, the statement said.

Still, Excelcomindo expects the rising number of subscribers and a more stable rupiah to help the company return to a profit next year, which will end two years of losses.

The Indonesian rupiah may gain 4.1 percent to 9,700 by the end of this year, Standard Chartered Plc's foreign exchange strategy team, headed by Callum Henderson, wrote in a report. For next year, an Indonesian parliamentary budget panel on Sept. 26 approved a 2006 budget assumption of 9,900 to the dollar, Seputar Indonesia newspaper reported on Sept. 27.

Excelcomindo expects to post net income of Rp 198.3 billion next year, assuming the rupiah trades at 10,000 to the dollar, as sales are expected to rise to Rp 4.9 trillion.

The company expects its subscriber base to rise 48 percent to 5.6 million users in 2005, and increase to 7.9 million next year and 10.4 million in 2007.