'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