Telkom profit jumps 11%

Telkom profit jumps 11%

Dow Jones, Jakarta

PT Telekomunikasi Indonesia (Telkom) said on Wednesday its first quarter net profit jumped 11 percent on year, thanks to higher revenue from its cellular unit and from fixed-phone operations.

Telkom's net profit rose to Rp 1.660 trillion (US$191 million) from Rp 1.499 trillion, beating analyst forecasts of between Rp 1.4 trillion and Rp 1.5 trillion.

"They are good earnings," said Sjed Al-Idid, an analyst with ING in Singapore.

Telkom shares were up 1.3 percent in the afternoon session at Rp 4,050, rebounding from a low of Rp 3,975 hit earlier as the market worried Telkom would book a lower net profit.

ING's Al-Idid said he is still recommending investors buy shares in Telkom given its sound fundamentals and promising growth outlook.

Telkom's total revenue during the quarter grew 34 percent to Rp 5.945 trillion from Rp 4.431 trillion last year.

Telkom said its fixed phone revenue, which accounted for 34 percent of total revenue, jumped 21 percent to Rp 2.007 trillion from Rp 1.664 trillion last year.

Higher fixed phone revenue came on the back of an increase in average fixed phone revenue per user, or ARPU, to Rp 173,384 per month from Rp 144,344.

As of March 31, Telkom had 7.82 million fixed telephone lines.

Telkom said revenue from its cellular services contributed 30.2 percent to total revenue, thanks to a higher contribution from its leading cellular unit, PT Telekomunikasi Selular Indonesia, or Telkomsel.

In the first quarter, Telkomsel booked revenue of Rp 2.319 trillion, up 52 percent from Rp 1.524 trillion last year. Its net profit leapt 51 percent to Rp 1.266 trillion from Rp 840.49 billion during the same period last year.

Telkomsel's subscribers rose 77 percent to 6.6 million people from 3.732 million last year.

During the first quarter of this year, Telkomsel invested IDR1.173 trillion to build base transceiver stations in Indonesia to support its cellular network.

Telkom has a 65 percent stake in Telkomsel, while the rest is owned by Singapore Telecommunications Ltd.

Analysts said Telkomsel will become a key earner for Telkom in the future given Indonesia's low cellular market penetration.

Only around 6 percent of Indonesia's 220 million population have cell phones, allowing huge room for growth in coming years. Analysts forecast the number of cellular customers will grow to around 15 million next year from around 12 million currently.

"Given its promising growth, Telkomsel will become the main driver for Telkom's revenue in the coming years," said Bernardus Irawan, head of the equity sales at Mandiri Sekuritas.

The government has a 51.19 percent stake in Telkom, while the rest is owned by the public.