Indosat reports business diversification, high income
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)