Indosat Reports Second Quarter Loss of IDR573.8 Billion

KATADATA ? PT Indosat Tbk posted poor financial results for the second quarter of 2014. Despite a revenue increase compared to the first quarter, the company reported a net loss of IDR573.8 billion. These results are in striking contrast to the previous quarter when the company reported a net income of IDR800.1 billion.

According to its financial statements, the company gained IDR5.84 trillion in revenue for the second quarter, which marks an increase of 1.2 percent from the first quarter.

In contrast, its operating expenses have increased by 14.1 percent to IDR5.45 trillion, which is due to rising telecommunication service costs of 6.1 percent, and depreciation and amortization expenses as well as labor costs of 98.8 percent.

As a result, its Q2 operating income has plummeted to 61.4 percent, to only IDR381.2 billion which is in striking contrast to the first quarter when the company reported an operating income of IDR987.5 billion. The loss on foreign exchange of IDR672 billion has put extra pressure on the company?s Q2 operating income.

The company reported a gain on foreign exchange of IDR800 billion in the previous quarter, which became the main contributor to the company?s total net income for the first quarter.

The company?s Q1 net income is much higher than its loss. As a result, the company was able to post a net income of IDR226 billion for the first semester. This figure is much better than the first semester of 2013 when the company reported a net loss of IDR231.2 billion.

?We realize that our performance is still affected by our network modernization process, but in term of profitability, the company showed an overall improvement compared to the same period of 2013,? Indosat?s CEO Alexander Rusli said in a statement on Friday (9/5).