Indosat announces higher profits

JAKARTA (JP): PT Indosat, the state-owned international telecommunications company, announced last night that its net income during the January-September period of this year increased by 9.5 percent to US$ 94.4 million.

The company's president, Tjahjono Soerjodibroto, told a press conference that the company's operating income in the third quarter this year alone was $50.9 million, 11.2 percent higher than that in the same period of last year.

"This was due to a high growth in telephone traffic volume, Indosat Business Services and telecast services, supported by a relatively slower growth in operating expenses," Tjahjono said.

He attributed the profit increase mainly to the 19.6 percent rise of Indosat's international telephone traffic during the third quarter of this year to 109.9 million minutes.

During the third quarter, the number of Indosat's International Direct Dial costumers rose by 91,275 to 290,275.

The growth in the services of high speed lines as of Sept. 30 was 43.5 percent, as compared to the same period of 1993. Meanwhile, the number of telecast minutes during the third quarter of this year increased by 81.9 percent.

The increase in high speed lines and telecast services is contributed to the second informal Asia Pacific Economic Cooperation forum held in Bogor, south of here, a fortnight ago, Tjahjono said.

Decrease

However, Indosat's services in telex and telegraph traffic as well as the low speed leased lines decreased by 29 percent, 22.2 percent and 15.3 percent respectively.

"The decreases resulted from costumers' preference in using high speed lines rather than the lower speed," Tjahjono explained.

He noted that the company's operating expenses for the third quarter of this year grew by 21.5 percent to Rp 121.2 billion ($55.8 million). However, the period recorded a slower rise in operating expenses, compared to the 30.7 percent growth in the first six months of this year.

"Please note that the operating expenses for the third quarter already included bonuses of Rp 5.5 billion for employees," Tjahjono said.

He said further that Indosat's operating revenue during the third quarter increased by 16.3 percent to Rp 232.2 billion and its total assets as of Sept. 30 stood at Rp 833.1 billion, up by 5.6 percent from Dec. 31 last year.

When asked, Tjahjono explained that Indosat had raked in some Rp 650 billion from its initial public offerings on the New York Stock Exchange as well as on two local stock markets -- the Jakarta and Surabaya Stock Exchanges.

Tjahjono said the proceeds from the public offerings has been allocated to finance a number of the company's investment projects.

The projects include the construction of a new gateway exchange in Surabaya, East Java, participation in the procurement of the Asia Pacific Cable Network and establishment of a joint venture company, PT Telkomcell, with the state-owned domestic telecommunications firm PT Telkom.

"The joint-venture company is set up to build a nationwide GSM digital cellular telephone network. Indosat's shares in the company constitute 49 percent of the total shares, while PT Telkom takes 51 percent," Tjahjono said, adding that Indosat's total required equity investment is some $29.6 million.

Tjahjono specified that Indosat contributes some $80 million to the Asia Pacific Cable Network project worth $600 million. The cable will have nine landing points throughout the Asia-Pacific region, one of which will be in Jakarta. (rid)