Higher profit of $751.5m expected at PT Telkom
Higher profit of $751.5m expected at PT Telkom
JAKARTA (JP): ING Baring Securities Ltd. expects state-owned
telecommunications firm PT Telkom to post a net profit of Rp 1.8
trillion (US$751.5 million), up from Rp 1.49 trillion last year.
Next year, it predicts that Telkom will gain Rp 2.22 trillion
in net profit, ING Baring said in its latest report Asian
Telecommunications Reviews.
Telkom, listed on the New York, London, Jakarta and Surabaya
stock exchanges, posted a net profit of Rp 907 billion in 1995,
increasing 14 percent from Rp 795 billion in 1994.
ING Baring predicted that Telkom's earnings per share would
increase significantly to Rp 273.9 next year, from Rp 193 this
year and 160.7 last year.
The higher profits are expected to come from increasing
domestic demand for telecommunications services, especially after
the introduction of joint operation projects for the installation
of at least 2.25 million telephone lines by private firms in five
regions by 1999.
The government adjusted phone-call tariffs on Dec. 30 last
year. The new tariffs structures went into effect Jan. 1 and
include the 4.5 percent increase in domestic call rates from Rp
110 to Rp 115 per pulse.
One telephone pulse lasts for three minutes (for calls made
within a 20-kilometer radius) and for two minutes within a 20 km
to 30 km radius.
Domestic and long-distance calls account for about 61 percent
of Telkom's total revenue. An estimated one-third of the pulses
are generated from long-distance calls and the remaining two-
thirds come from local calls.
The government cut long-distance call tariffs by 2 percent to
Rp 108 from Rp 110 per pulse (between four seconds and seven
seconds, depending on distances). The new installation fees were
reduced by 15 percent on average, while leased line circuit costs
were cut by an average of 52 percent.
Cellular air time charges were lowered 2 percent to Rp 270
from Rp 275 per minute.
The government last year also revised tariffs for
international calls, including charge reductions to 209 countries
(ranging from 1.1 percent to 38.5 percent) and charge increases
to 21 countries (ranging from 9.6 percent to 25.3 percent).
ING Baring's predictions for Indosat's financial performance
in 1996 were almost in line with the actual results.
Indosat
Indosat, the state-owned international telecommunications
operator, reported last week a 14 percent increase in its net
profit last year to Rp 523.5 billion from Rp 459.4 billion in
1995.
Indosat announced that its sales grew by 17.1 percent to Rp
1.22 trillion in 1996, from Rp 1.04 trillion in 1995. The
company's profit represented a net income of Rp 505.6 per share,
or $2.12 per American Depository Share. The company's 14 percent
profit growth in 1996 was much lower than 59 percent increase
recorded in 1995.
ING Baring had predicted that Indosat would gain Rp 565
billion in operating profit and Rp 495 billion in profit, while
its earning per share was predicted to stay at Rp 478.
ING Baring projected that Indosat's operating profit would
reach Rp 648 billion this year and Rp 754 billion in 1998, its
net profit would reach Rp 563 billion this year and Rp 688
billion next year, and its earnings per share would increase from
an estimated figure of Rp 544 this year to an estimated Rp 664
next year. (icn)