9:23 Telkom Indonesia's Profit Falls 12% on Rising Costs (Update2)
By Arijit Ghosh April 30 (Bloomberg) -- PT Telekomunikasi Indonesia, the nation's biggest company by market value, reported first-quarter profit fell 12 percent as higher costs of using rivals' networks offset gains in subscribers at its mobile-phone unit. Unaudited net income at the state-owned telecommunications company known as Telkom declined to 3.04 trillion rupiah ($335 million) in the three months ended March 31, from 3.46 trillion rupiah a year earlier, the company said in an e-mailed statement yesterday. Telkom has yet to announce its 2006 earnings. Costs rose after phone carriers adjusted the fees they charge to use each other's networks. Still, a 44 percent increase in subscribers at subsidiary PT Telekomunikasi Selular, Indonesia's largest mobile- phone operator, helped generate revenue that exceeded estimates by Deutsche Bank AG. ``This is strong growth data from Telkom,'' Raymond Kosasih, an analyst a Deutsche Bank in Jakarta, wrote in a note to clients. ``We think with better-than-expected results at the operational level, there could be room for valuation upgrade.'' Operating revenue rose 23 percent to 14.5 trillion rupiah, beating the 13.8 trillion rupiah estimated by Deutsche. Telekomunikasi Selular, the mobile-phone unit, is benefiting as higher economic growth encourages Indonesians to use their services. Telekomunikasi Selular is adding 1 million users a month, CLSA Ltd. said in a note to investors on April 17, citing Telkom President Rinaldi Firmansyah. Still, earnings before interest, depreciation, taxes and amortization, expressed as a percentage of revenue, fell 6.6 percentage points on higher costs at the network and interconnection division, which accounts for 20 percent of the company's sales. ``The new interconnection tariff scheme has resulted in an increase in revenue and at the same time an increase in expenses, which has impacted'' profitability, Telkom said in the statement. The Bandung, West Java-based company didn't provide details on costs. Shares of Telkom, whose market value exceeds the combined market capitalization of the next three largest companies listed on the Jakarta Stock Exchange, fell 0.5 percent to 10,750 rupiah in Jakarta on April 27. To contact the reporter on this story: Arijit Ghosh in Jakarta at [EMAIL PROTECTED] Last Updated: April 29, 2007 21:21 EDT Email this article Printer friendly format Advertisement: You've worked, you've saved, now PROTECT your nest egg. More News Yen Gains as Investors Reduce Carry Trades After China Acts to Cool Growth Orica First-Half Profit Increases 70 Percent on Acquisition of Dyno Assets China Shipbuilders, Rivaling U.S. After Pearl Harbor, to Cut Freight Costs
