16 April 2009 Telkom 50% Profit for Dividend

Ika Krismantari
The Jakarta Post/Jakarta

State-controlled telecommunications operator PT Telekomunikasi Indonesia (Telkom), may allocate half of last year’s profit as dividend.

Telkom president director Rinaldi Firmansyah confirmed Wednesday the allocation “will be around that level”.

However, he refused to give further details, saying the company’s 2008 financial report would be announced soon.

Telkom’s plan is in line with the state enterprises ministry’s request for a dividend of between 50 and 55 percent of Telkom’s 2008 profit.

As of September 2008, the country’s largest telecommunications operator booked Rp8.9 trillion (US$818 million) in net profit, or a 9.2 percent drop compared to a year earlier.

That year, Telkom paid out hefty dividends amounting to Rp 9 trillion (about 70 percent) of its 2007 net profit on the back of solid business growth.

The government controls a majority stake in Telkom, owning 51.19 percent of the company’s shares.

Rinaldi said the company targeted to spend US$2 billion in capital expenditure (capex) this year for network expansion.

He added 70 percent of the capex funds would come from internal cash flow, while the remaining 30 percent would come from bank financing.

So fat, a number of local banks – Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI) and Bank Mandiri, have committed to providing the loans, Rinaldi said.

The company is eyeing partnerships with global operators to strengthen its presence not only in the local market but also abroad.

On Wednesday, Telkom signed an MOU on partnership with French based operator ORANGE. The cooperation is expected to generate Rp100 billion in additional revenue annually. Last month, Telkom also signed an agreement with Telekom Malaysia on coverage expansion.