Indosat profit increases 36% in first half of year

JAKARTA (JP): Publicly listed telecommunications company PT Indonesian Satellite Corporation (Indosat) announced on Wednesday an unaudited consolidated net income of Rp 638.4 billion (US$98.2 million) for the first half of 1999.

The international telecommunications provider said the net profit figure represented a 36.8 percent increase over the corresponding period in 1998.

Earnings per share in this year's January to June period were Rp 660, or 98 U.S. cents per American Depository Share (ADS), using the closing exchange rate of Rp 6,726 per U.S. dollar quoted by Bank Indonesia on June 30.

Indosat's president and chief executive officer Tjahjono Soerjodibroto said in the company's financial statement that sluggish business activity before and after the June general election affected demand for international telephone services.

He said even the year-on-year 10 percent increase in inbound tourist arrivals, one of the main customers for the international direct dial (IDD) business, had dropped off due to a change in the tourist profile.

"However, from the financial point of view, we managed to obtain quite moderate growth on revenues and net income, even though we booked losses due to the rupiah depreciation against the U.S. dollar."

He said the company projected that a stable economic and political environment would lead to increased demand for international telecommunications services during the rest of 1999 and into the future.

Indosat's international telephone traffic was recorded at 319.1 million minutes in the first half of this year, a decrease of 11.9 percent, from 362.4 million minutes in the first half of 1998.

The company said during the first half it experienced constant demand for communication services, including the high speed leased line and Internet services, due to growing demand for data communications services.

In the first half of 1999, Indosat's high speed leased line service was recorded at 636 lines, from 613 lines at the end of 1998.

While its subsidiary Internet service provider IndosatNet increased access services to 34,854 retail subscribers, placing Indosat as the market leader in the Internet business with a 31 percent market share.

Indosat's executive vice president for marketing and sales Bambang Sulistyo said the company recorded outgoing and incoming traffic volumes of 142,2 million minutes and 176.7 million minutes respectively during the first six months of this year.

The new telephone tariff implemented by the government in 1998 has had a positive impact by improving the ratio to 1.24 in the first half of 1999, from 1.09 in the second half of last year, he said.

Indosat's consolidated operating revenues increased by 36.4 percent for the first half of this year to Rp 1.38 trillion, from Rp 1.01 trillion in the same period last year.

International telephone revenue, which is the main contributor to Indosat income, rose by 38.5 percent, or higher than the telephone traffic growth, due to the increase in the international telephone tariff in March.

Revenues from other telecommunications services also went up by 32.5 percent due to an increase in global corporate services and Internet services.

The company said in the future it would focus its business development on basic telephony and data communications, especially Internet services.

Indosat has an exclusive right to provide the IDD service in Indonesia until 2004, and is also providing switched and non- switched telecommunications services.

The company's shares are listed on the New York, Jakarta and Surabaya stock exchanges. (cst)