Indosat reports 89.4% rise in net profit

JAKARTA (JP): PT Indonesian Satellite Corporation (Indosat) announced on Wednesday consolidated net income of Rp 847.7 billion (US$79.2 million) for the first nine months of 1998, representing an 89.4 percent increase over the same period of last year.

Earnings per share were Rp 818.6 or 77 U.S. cents per American Depository Share (ADS) using Bank Indonesia's Sept. 30 closing exchange rate of Rp 10,700 per U.S. dollar.

Indosat's international telephone traffic increased by 34.7 million minutes in the first three quarters of 1998 to 543.6 million minutes, up from 508.9 million minutes in the same period of 1997 and the number of high-speed leased lines, as part of its global corporate service, grew to 583.

Indosat's president and chief executive officer, Tjahjono Soerjodibroto, said the sharp drop in the rupiah against the U.S. dollar boosted international telecommunications services demand in Indonesia.

"Compared to last year, our traffic volume grew at a slower pace which forced us to be more cautious in all of our operational activities and in managing our cash flow, especially foreign currency, because of previous investment commitments that are due", he said.

Bambang Sulistyo, Indosat's executive vice president for marketing, said that during January to September 1998, Indosat's outgoing and incoming telephone traffic volume was 244.1 million and 299.5 million minutes respectively, an increase of 10.3 percent and 4.1 percent compared to the traffic volume at same period in 1997.

Significantly slower growth in incoming traffic was mostly due to the reduction of international business activities as a result of the economic crisis and political instability following the May riots in Jakarta.

"Most overseas businessmen lost their contact points in Jakarta. Nevertheless, our market share loss to our competitor appears to be slowing down," he said, indicating that the estimated average market share for telephone service, including fixed and cellular lines rose to 87.6 percent from 86.2 percent at the end 1997.

"Currently, Indosat is still projecting that year on year telephone traffic growth will be positive for 1998," he said.

The government, which owns 65 percent of Indosat, which is listed on the Jakarta and New York stock exchanges, is preparing a competitive tender for the divestment of about 14 percent of its shares in the international telecommunications provider. (hen)