Indonesian companies across various sectors, from telecommunications to consumer goods, have taken a hit from the weakening rupiah, which has lost 14 percent of its value against the US dollar since the start of the year. (Antara Photo/Joko Sulistyo)

Mixed Earnings as Cellular Tower Operators Feel the Pinch From a Weak Rupiah

BY :VANESHA MANUTURI

AUGUST 31, 2015

Jakarta. Cellular tower operators reported mixed earnings results for the first half of the year, with foreign-exchange losses and ballooning costs putting pressure on profits.

Indonesian companies across various sectors, from telecommunications to consumer goods, have taken a hit from the weakening rupiah, which has lost 14 percent of its value against the US dollar since the start of the year.

Net profit at Tower Bersama Infrastructure, a subsidiary of the investment firm Saratoga Investama Sedaya, fell 14 percent to Rp 570 billion ($40.5 million) in the first half of 2015 from the same perid last year. While revenue grew 5.7 percent to Rp 1.67 trillion, the company suffered an 8 percent increase in the cost of revenue to Rp 1.46 trillion.

Tower Bersama also reported a Rp 100 million foreign-exchange loss during the period, compared to a Rp 22 billion gain from foreign exchange in the first half of 2014, despite having hedged up to 90 percent of its dollar-denominated debt.

“We’ve been hedging our dollar-denominated debt since 2010 and we will continue our conservative strategy to minimize the risk from foreign-exchange rates,” Helmy Yusman Santoso, Tower Bersama’s chief financial officer, said in a statement.

Similarly, rival Sarana Menara Nusantara’s profit fell by 19 percent to Rp 473 billion, despite the fact that sales were up 10 percent to Rp 2.1 trillion.

General and administrative expenses at the company climbed nearly 20 percent to Rp 221 billion. It also reported up to Rp 274 billion in foreign-exchange losses compared to a Rp 143 billion gain in the same period last year.

Bucking the trend was Solusi Tunas Pratama, whose profit climbed by 15 percent to Rp 97.6 billion during the half as sales jumped 72 percent to Rp 880 billion.

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