Indosat operating profits up 34%

Indosat operating profits up 34%

JAKARTA: PT Indonesian Satellite Corp. (Indosat) said over the weekend that its unaudited net profit fell 23 percent in the first half of the year to Rp 402.1 billion from Rp525.1 billion a year earlier mainly due to a new accounting policy on amortization of goodwill.

The company said that as of Jan. 1 this year, it changed the amortization period of goodwill as a result of acquiring cellular company PT Satelit Palapa Indonesia, or Satelindo, to 15 years from five years. Indosat bought Satelindo last year.

The extension of goodwill over the longer period reflects the company's view that the cellular business in Indonesia is expected to grow over a longer period than five years, the company said.

Indosat said that its operating revenues rose 27 percent to Rp3.882 trillion from Rp3.067 trillion, driven by a 53 percent increase in cellular revenues, which is largely attributed to a rise in the number of subscribers.

The cellular business contributed 57.5 percent to the company's revenues in the first half of the year, international calls 25.4 percent, multi media 15.9 percent, and other services the remaining 1.2 percent, the company said.

Operating income rose 34 percent to Rp1.244 trillion from Rp925.9 trillion.

Singapore Technologies Telemedia owns a 42 percent stake in Indosat, the Indonesian government 15 percent, and public investors the remaining 43 percent.--Dow Jones