Indosat's net income rises 22 percent

JAKARTA (JP): PT Indonesian Satellite Corporation (Indosat) announced yesterday a 22 percent increase in its consolidated net income for 1997 to Rp 636.5 billion (US$136.9 million) from Rp 521.7 billion the previous year despite the country's monetary crisis.

Company president Tjahjono Soerjodibroto contributed the increase to the strong growth in telephone traffic and high speed leased lines.

The company's earnings per share were Rp 6,146 or $1.30 per American Depository Share, he said.

"This is the best that we can do with this recent monetary turmoil," Tjahjono said.

Indosat's international telephone traffic increased to 683.9 million minutes last year from 576.6 million minutes in 1996.

The company also recorded strong growth in high speed leased line service of 572 lines and telecast service last year, up 110,400 minutes over the previous year.

"Although the 1997 economy was in turmoil, the international traffic pattern appears not to be affected," Tjahjono said.

Indosat's vice president for marketing said its market share loss to competitors appeared to be slowing down.

"Our average market share from fixed lines in 1997 was 89.3 percent compared to 91.2 percent in 1996," Bambang said.

The company said its consolidated operating revenue last year increased to Rp 1.45 trillion from Rp 1.22 trillion in 1996.

It contributed the increase to a 15.4 percent increase in revenue from international telephone calls and a 56 percent increase in other telecommunications services revenue, including Rp 34.5 billion in revenue from its subsidiary Sisindosat.

The growth of telephone call revenue was lower than traffic growth due to the impact of accounting rate reductions and lower collection rates for Batam and Singapore border traffic and the sharp depreciation of the rupiah against the U.S. dollar, it said.

Indosat maintained an average accounting rate reduction of about 7 percent which affected only 1.4 percent of Indosat revenue from telephone calls, the company said.

The company said its 1997 consolidated operational expenses were Rp 763.5 billion, up 19.9 percent from 1996. It said compensation payments to state-owned PT Telkom increased by 8.2 percent.

The company's vice president of finance and administration, Herman Simandjuntak, said general and administration, other costs of telecommunications and maintenance expenses, increased last year, reflecting the rise in the number of circuits used and the collapse of the rupiah.

Personnel expenses increased due to a personnel optimization plan which would increase personnel productivity by 5 percent in the future, he said.

"We have successfully maintained and controlled our revenue growth to be more than our expenses growth for Indosat which enables us to achieve an operational margin of about 45 to 50 percent for the full year of 1997," he said. (das)