Telkom reports a net loss of Rp 1.17 trillion

JAKARTA (JP): PT Telkom Indonesia has reported a net loss of Rp 1.17 trillion (US$100 million) in the first half of this year compared to a net profit of Rp 821 billion in the corresponding period in 1997.

The publicly-listed telecommunications company attributed the massive loss to the fall in the value of the rupiah against the U.S. dollar during the six-month period.

The collapse of the rupiah caused massive foreign exchange losses that devoured most of the company's operating profit during the first half of 1998, the company said in a statement.

"The main cause of the net loss was foreign exchange losses," the company said.

The net foreign exchange loss was Rp 4.46 trillion as of June 30 this year. In the company's income statement, a sum of Rp 2.93 trillion from the total net foreign exchange loss was charged to the other expenses account, while the remaining Rp 1.53 trillion was capitalized to account for construction work in progress in accordance with standard Indonesian accounting practices.

Another factor contributing to the company's alarming financial performance were losses amounting to Rp 162 billion run up on long term investments in affiliated companies.

The company's operating costs rose by 13 percent to Rp 3.24 trillion in the first six months of this year, compared to Rp 2.87 trillion in the corresponding period last year. Operating profits reportedly rose 17 percent to Rp 1.49 trillion, from Rp 1.27 trillion in the first six months of 1997.

The shape of the company's loan portfolio changed significantly over the reporting period as a result of the weak and volatile rupiah.

"44.8 percent of the total loan portfolio was denominated in rupiah and 55.2 percent in foreign currencies as of June 30," the statement said.

In comparison, 88 percent of total loans at the end of the first half of 1997 were denominated in rupiah and the remaining 12 percent in foreign currencies.

The company said the company suffered damage worth an estimated Rp 16.3 billion during the May riots in which over 1,200 people died and thousands of buildings were looted, ransacked and set on fire by angry mobs.

"Damage inflicted on network facilities in this period has had a severe impact on the company's earning performance," the statement said.

PT Telkom, which is listed on the Jakarta and New York Stock Exchanges, is one of 12 state firms scheduled to be privatized in this financial year in a sell off expected to raise US$1.5 billion.

The government, which holds a 65 percent stake in the telecommunications firm, plans to divest an undisclosed part of its stake in the company.

Shares in Telkom's fell Rp 125 to Rp 3,075 yesterday after news of its poor first half results spread through the market. (aly)