Telkom reports 65.7% rise in profit

JAKARTA (JP): State-owned domestic telecommunications operator PT Telekomunikasi Indonesia (Telkom) has reported a net profit of Rp 1.5 trillion (US$630.8 million) in 1996, a 65.76 percent increase from Rp 795 billion in 1995.

The company announced yesterday that earnings per share rose to Rp 161.07 in 1996 from Rp 106.44. The earnings per American Depository Share rose to $1.35 from $0.92.

Telkom said that its total operating revenues decreased last year 0.6 percent to Rp 5.07 trillion from Rp 5.1 trillion the previous year.

Telkom, which listed its shares on the New York, London, Jakarta and Surabaya stock exchanges in November 1995, recorded a 14 percent increase in net profit and 26 percent increase in operating revenue in 1995.

"The increases in the net income and operating revenue (in 1996) were largely attributable to the one time charge for the Golden Handshake Program in 1995 of Rp 340.5 billion, the company's continued growth in number of lines in service and corresponding increased call volume on the fixed line network," Telkom said in a statement.

The company operated 4.2 million lines by late last year, 27 percent more than the previous period. The telephone penetration ratio increased by 23.52 percent to 2.1 per 100 people by the end of 1996 from 1.7 12 months previously.

Of the 4.2 million lines, 2.3 million were located in the greater Jakarta area and East Java, Telkom said.

Telkom signed 15-year joint-operation contracts worth $3 billion in 1995 with five joint ventures. The overseas partners include Cable & Wireless of Britain, Telstra of Australia, NTT of Japan, France Telecom, US West of the United States and Singapore Telecom.

The five firms are required to install, manage and operate telecommunications networks in Sumatra, West Java, Central Java, Kalimantan and Indonesia's eastern provinces until 2010.

Decline

Telkom said that total revenue decreased 0.6 percent resulting from a 34.1 percent decrease in telephone operating revenue and a 10.9 percent decrease in revenue from other telecommunications services.

"The decline in telephone operating revenue was attributable to the accounting treatment for the joint operation divisions, the revenue from which is recorded under a new item, revenue under the joint operation scheme.

"Revenue under the joint operation scheme of Rp 1.49 trillion offset the Rp 1.42 trillion decrease in telephone operating revenues for 1996."

The company reported that telephone revenue from its two divisions was Rp 2.76 trillion in 1996, while revenue from the five privatized regions totaled Rp 1.36 trillion in Minimum Telkom Revenue and Rp 121.5 billion in Distributable Telkom Revenue.

Telkom said yesterday that its total assets increased by 11.7 percent to $7.46 billion; property, plant, and equipment by 25.5 percent to $5.4 billion; while its long-term debts by 8.9 percent to $2.01 billion last year and stockholders' equity by 20 percent to $3.72 billion.

Shares

Telkom's shares have been under pressure in the last few days following media reports that a consortium, involving businessman Sudwikatmono, President Soeharto's brother-in-law, planned to enter the domestic telecommunications sector.

Telkom's share prices continued losing ground yesterday to close at Rp 3,725.

State-owned international telecommunications provider PT Indosat has also expressed an interest to enter the domestic market.

Company president Tjahjono Soerjodibroto said recently that Indosat was planning to offer a long-distance (domestic) service by 2005 and a local service by 2010.

Under decree No. 6/102 implemented in 1995, the government granted exclusive rights to Indosat and PT Satelindo to run international telecommunications services until 2005.

In 1995, the government also granted a 10-year monopoly on long-distance calls to the state-owned domestic telecommunications provider Telkom. Long-distance calls are Telkom's largest source of income.

There is no guarantee, however, that Telkom, Indosat and Satelindo will continue to hold their service rights after these privileges expire. The decrees are also subject to termination before the expiry date. (icn)