'Indosiar's new holding company listed on JSX

'Indosiar's new holding company listed on JSX

Rendi A. Witular, Jakarta

PT Indosiar Karya Media (IKM), a new holding company for the
Indosiar television network, officially listed its shares on the
Jakarta Stock Exchange (JSX) on Monday, to replace its previously
listed subsidiary PT Indosiar Visual Mandiri (IVM), which
operates the TV station.

Via the holding company, foreign investors can indirectly
obtain greater shares in Indosiar as existing regulations limit
the maximum direct ownership of a foreign investor in mass media
companies to 20 percent.

"The holding is expected to help Indosiar procure more funds
from foreign investors to help expand the company's business,"
said IKM finance director Phiong Phillipus Darma during the
listing ceremony.

"Foreign investors can then invest in the TV station
indirectly through the holding company," he said.

IKM shares ended higher at Rp 675 on Monday from Rp 550 during
its pre-opening on the JSX.

At present, IKM shareholders consist of PT Prima Visualindo
with 27.74 percent ownership, PT TDM Asset with 29.02 percent and
the investing public with 43.24 percent. IKM now controls 99.9
percent shares in IVM, which operates Indosiar.

IVM has proposed voluntary delisting to the JSX early this
year to open ways for the listing of IKM in the bourse, by
requesting IVM shareholders to convert their shares for IKM
stocks.

Phiong said less than 1 percent of IVM shareholders still
refused to convert their shares. The shareholders will be given
until Nov. 22 to convert them, or their shares will be bought
back by Prima Visualindo as the standby buyer.

Indosiar, which was once controlled by the Salim Group, has
projected revenue from operations to rise to at least Rp 1.1
trillion (US$122 million) this year, and a net profit of around
Rp 130 billion. The company's revenue rose to Rp 1 trillion last
year, from Rp 980 billion in 2002. However, its net profit
plunged by around 50 percent to Rp 101 billion last year.

The decline in profit was primarily attributable to higher
expenses in producing high-rating TV programs in order to
maintain its audience share.

The company had to come up with better programs to compete in
the crowded broadcast sector, which was jam-packed with 13
television stations that broadcast nationwide.

As for next year, the company, which broadcasts in 130 cities
throughout the country via 22 relay stations, has projected
operating revenues to grow by 10 percent and a net profit of
about 15 percent.

Advertisement spending this year is projected to reach at
least Rp 18 trillion, as business activities were expected to
remain robust amid business confidence following the trouble-free
general election.

Audience shares in all telecast hours (in percentage)

January-August January-July

Indosiar 19.6 23.8

RCTI 18.4 17.7

SCTV 16.6 16.6

Trans TV 11.9 12.5

TPI 10.6 10.9

Lativi 7.2 5.7

TV7 6.1 5.0

ANTV 4.3 3.7

TVRI program 1 1.7 1.5

Metro TV 1.4 1.1

Global TV 1.9 1.0

JTV 0.3 0.4

TV B Semarang 0 0.1

Source: Nielsen Media Research & Corporate R&D