Indosat H1 net profit falls 15 percent in first half

Indosat H1 net profit falls 15 percent in first half

JAKARTA (JP): The publicly-listed state owned
telecommunications company PT Indonesia Satellite Corp (Indosat)
said on Wednesday its unaudited first-half net profit fell 15
percent to Rp 558.6 billion (US$59.7 million) from Rp 658 billion
in the same period last year.

Indosat said in statement that the drop in profit was mainly
due to the acquisition of indebted mobile-phone operator PT
Telekomunikasi Indonesia, which is carrying some $500 million in
foreign debt.

The takeover of the foreign debt amid the sharp drop in the
value of the rupiah against the U.S. dollar dealt a blow to
Indosat's bottom line.

Indosat said that it suffered a Rp 227.1 billion foreign
exchange loss in the first half due to the rising cost of
servicing the Satelindo foreign debt, compared to a Rp 306.8
billion forex gain in the same period last year.

The rupiah had been under heavy pressure over the past several
months amid domestic political uncertainty and continuing
economic woes.

Indosat acquired Satelindo in May as part of a deal with
another publicly-listed state-owned telecommunications firm PT
Telkom to put an end to the practice of major cross-holdings in
several telecommunications concerns.

Indosat said, however, that first half sales jumped to Rp 3.22
trillion, compared with Rp 1.585 trillion a year ago.

The company said its operating profit also increased to Rp
1.325 trillion in the first semester of this year, compared to Rp
820.9 billion in the same period of last year.

It added that 42 percent of its operating revenue came from
the international direct call business, and 38 percent from
mobile phone services.

Indosat, which is 65 percent owned by the government, is
traditionally dependent on the competitive international call
market to generate revenues.

On the expense side, total operating expenses reached Rp 1.89
trillion in the first half of this year.(05)