Indosat reports business diversification, high income
JAKARTA (JP): PT Indosat has acquired 15.2 percent of shares in Alphanet Telecom Inc (ATI) of Canada worth C$15.75 million (US$10.5 million) as part of its expansion into international telecommunications.
ATI, publicly listed on the Toronto Stock Exchange, provides international telecommunications services, Indosat's corporate development vice president Safwan Natanagara said here yesterday.
He said Indosat bought the shares from the Alphanet Telecom Corporation in September.
Indosat had also bought convertible bonds worth Rp 150 billion in private television network TPI, Safwan added.
"The bonds have a 7 percent coupon rate and five-year tenure. To enable the bonds to be converted into shares, TPI should be listed by 1999 and become one of the best networks in Indonesia. The contribution expected from this diversification will be about 8 percent to 10 percent of our revenues by 2000," he said.
State-owned Indosat reported yesterday a 23.9 percent increase in its net profit to Rp 447.6 billion ($136.7 million) in the first nine months of this year over the same period in 1996.
Company president Tjahjono Soerjodibroto said here yesterday that in the first three quarters, the earnings per share was Rp 432.2, or $1.30 per American Depository Share.
"The nine-month period in 1997 shows that Indosat was not negatively affected by the recent monetary turmoil. As targeted, we've been able to keep the growth of operating expenses lower than the growth of operating revenues, which has resulted in an income growth of 19.2 percent," he said.
"Although the economy is in turmoil, the international volume pattern appears to be unaffected for this nine-month period in 1997. Strong telephone traffic growth and high-speed leased lines are still evident, compared to the same period in 1996.
"Therefore, looking forward to the end of 1997 with the current achievements and prudent financial management, we are confident that our 1997 projects are achievable," Tjahjono said.
Indosat floated its shares on the New York and Jakarta stock exchanges in October 1994. The company's share price closed Tuesday at $25, lower than $26.25 on Monday, per American Depository Share on the New York Stock Exchange. Yesterday, its share price on the Jakarta Stock Exchange gained Rp 100 to close at Rp 8,200.
In the first half of this year, the company's profits increased by 15.78 percent to Rp 272.2 billion.
Indosat's international telephone traffic was 508.9 million minutes in the first three quarters of this year from 426.6 million minutes in the same period last year.
Indosat's vice president of marketing Bambang Sulistyo said incoming international traffic for the first nine months was 287.7 million minutes, up from 243.2 million minutes in 1996, while outgoing international traffic was 221.2 million minutes, up from 183.4 million minutes.
"Higher growth of outgoing traffic compared to incoming traffic that occurred during the third quarter confirms that traffic volume has not been affected by the recent monetary turmoil," he said.
Besides Indosat, the government has awarded exclusive rights to operate the country's international telecommunications services to PT Satelindo until 2005. Indosat's market share was 91.2 percent in 1996.
"The market share loss to our competitor appears to be slowing down, as shown by our average market share from fixed-lines up to 89.5 percent in September 1997, compared to 89.4 percent at the end June 1997," Sulistyo said.
The result reflected Indosat's successful efforts to maintain the confidence of customers in the company's quality of service compared to its competitor and its ability to win back customers from its rival.
"We are optimistic that we can maintain an average market share for fixed-lines of at least 86 percent for the entire year," he said. (icn)