Telkom's 1997 profit slides on forex losses

JAKARTA (JP): State-owned telecommunications company PT Telekomunikasi Indonesia said yesterday the monetary crisis had dragged down its net profits by 23.4 percent last year to Rp 1.5 trillion (US$187.5 million).

Company president Asman Akhir Nasution attributed the decline to significant foreign exchange losses, totaling Rp 424.4 billion, resulting from the rupiah's sharp drop on the dollar since the economic turmoil began.

"A large part of our investment came from offshore loans, (and) the rupiah's depreciation against the dollar forced us to carry the burden of foreign exchange losses in a large amount," Nasution said after the publicly listed Telkom's general shareholders meeting here.

The rupiah began to crumble against the dollar last July. It is currently at a level 70 percent lower than it was before the crisis, when it was around Rp 2,450 to the dollar.

Nasution also announced Telkom recorded Rp 295 billion in losses incurred by some of its subsidiary companies.

He refused to disclose which of the 22 subsidiaries suffered the losses.

He said since the monetary crisis reduced purchasing powers of its customers and cut cash flows of many companies, Telkom's earnings from users of its service also declined.

Companies' cost-saving measures of moving from high-rise office buildings to office houses contributed somewhat to the decline, he said.

Shareholders agreed at yesterday's meeting to distribute a dividend of Rp 452.4 billion, or 40 percent of the total net profit, up from 26 percent of the 1996 dividend.

Shareholders will be paid Rp 48.47 a share, the company said.

About 27 percent of the 40 percent dividends would be distributed on July 1, and the remaining 13 percent on Dec. 30. (das)