JAKARTA: Telecommunications firm PT Indosat continues to see its business slide into the red with the company posting up to Rp 388.5 billion (US$28.3 million) in losses in the third quarter of 2015, mostly due to the depreciation of the rupiah against the US dollar.
The third quarter losses constituted a 39.6 percent increase from the Rp 278.2 billion in losses recorded by the company in the second quarter of 2015.
Indosat, a subsidiary of Qatar-based telecommunications company Ooredoo, booked a total loss of Rp 1.1 trillion in the January-September period of 2015.
Indosat chief financial officer (CFO) Caba Pinter said most of the company’s losses came from the forex losses it endured as a result of the weakening of the rupiah against the greenback.
“If we do not count our forex losses, we could have posted a profit of Rp 324 billion. The depreciation toward our fixed assets also had an impact on our performance,” Pinter said on Friday.
Indosat’s forex losses for the third quarter of 2015 stood at Rp. 1.3 trillion, rising up 377.7 percent from Rp 278.9 billion in the second quarter. Over the past nine months, the company’s forex losses have totaled Rp 2.3 trillion.
Indosat corporate secretary and investor relations group head Harsya Denny Suryo added that the company’s efforts to modernize its network and its services, along with various operating expenses, were also to blame for the company’s performance.
Moreover, Pinter said the company had no expectations or relative concerns regarding the state of forex in the future but said that Indosat would continue to consistently hedge its funds by 35 percent every quarter.
Despite the losses, Indosat managed to book revenues of Rp 6.9 trillion in the third quarter of 2015, increasing from Rp 6.5 trillion in the second quarter. The company’s revenues for the last nine months also rose 10.5 percent to Rp 19.5 trillion year-on-year, the biggest contributor of which was their cellular service.
Indosat CEO Alexander Rusli added that the company was still hoping to grow by 7 to 8 percent by the end of 2015 and also to decrease its portion of US dollar-denominated debt to about 15 to 20 percent from the current level of 32 percent.
“Our target for the near future will still be to focus on improving our modernized network and to improve customer service. The development of our LTE platform will also remain a key goal,” he said.
The company plans to also issue conventional and sukuk bonds in December valued at Rp 900 billion to help pay for its debt and frequency fees and to add to Indosat’s capital expenditure for next year.
“We haven’t finalized the bonds yet but we’re looking at releasing 90 percent conventional bonds and 10 percent sukuk bonds,” Pinter said.
Indosat bought back all of its previous bonds in July, worth US$650 million, to minimize currency risks.
As of September 2015, Indosat has 14.8 million users.
