Indosat books Rp1.3 billion net profit in 3rd quarter

JAKARTA (JP): State owned and publicly listed long distance call operator PT Indosat announced on Wednesday consolidated unaudited net profit of Rp 1.35 trillion (about US$151.6 million based on the current exchange rate) for the third quarter of this year, up 13 percent compared to the same period last year.

"Overall, our international telecommunication traffic remains stable and survived in a very difficult situation," Indosat president Hari Kartana said in a press statement.

The company's consolidated operating income rose by 1.8 percent to Rp 2.18 trillion from Rp 2.14 trillion in the same period last year.

Revenue from its international telephone service remained its largest contributor, although it grew by only 0.4 percent, the company said.

As rates remained unchanged, the revenue increase was proportional to the volume increase in its international telephone traffic, Indosat explained.

During the same period, Indosat booked higher growth in other services, in particular multimedia services which grew by 39.1 percent.

However, Indosat's own operating income in the third quarter of this year fell by 4.5 percent compared to the same period last year.

Other income rose by 74.3 percent to Rp 749.5 billion from Rp 430 billion during the same period last year.

"This very strong growth was mainly due to the significant increase in foreign exchange gains of 406.1 percent to Rp 325.2 billion from Rp 64.3 billion," the company said.

Indosat earns U.S dollars for any incoming call, which according to Indosat, grew by 2.32 percent in the third quarter of this year.

"Continuing growth in Indosat's IDD (international direct dialing) traffic, even in adverse economic conditions, and a solid Indosat IDD market share of 86.1 percent are indications that our services are continuously meeting customers' needs," the company's marketing executive Guntur Siregar said.

In this year's third quarter, investment income also booked a solid growth of 26.6 percent to Rp 255 billion from Rp 202 billion last year.

Indosat's subsidiaries contributing to investment revenues were led by PT Telkomsel with Rp 303.3 billion, PT Lintasarta with Rp 16.6 billion and Rp 15.4 billion from PT Intelsat.

However, in the same period, the company suffered a hefty Rp 90.1 billion in equity loss from its subsidiary MGTI.

As part of Indosat's cellular business strategy, the company planned to increase its ownership in Telkomsel, which is the largest GSM-900 operator in Indonesia.

Indosat said that it would spend between Rp 11 trillion to Rp 15 trillion in the next five years, for expansion in four other businesses.

The largest portion, Rp 6.74 trillion, will be spent next year, mainly to expand its mobile phone business.

To help finance the plan, Indosat will issue bonds in the near future.

The company said it had appointed four financial advisors to help restructure its businesses.

Danareksa and CSFB will restructure Indosat's cellular operations, while Rothschild and Booz Allen Hamilton will restructure the company's noncellular operations.

Indosat is listed at The Jakarta Stock Exchange, and its American Depository Shares are listed on The New York Stock Exchange.(bkm)