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)