Nov 17, 2010

Exclude forex gain, look at BTEL profit!

CDMA-based telephone operator PT Bakrie Telecom Tbk (BTEL) posted a 52.67% jump in net income during the first 9 months ended September 30 2010 compared to the same period a year earlier as higher foreign exchange gain.
Despite a widened financial charges of 97.50%, Bakrie Telecom booked Rp148.59 billion net income from Rp97.33 billion.
In the financial report submitted to Indonesia Stock Exchange (IDX), the operator's revenue slightly increased to Rp2.05 trillion from Rp2.01 trillion. However, operating expenses rose 3.91% to Rp1.86 trillion from a year earlier of Rp1.79 trillion. In return, operating income fell 11.54% to Rp190.72 billion from Rp215.60 billion. 
Margin drop
In quarterly basis, Bakrie Telecom's 3Q performance was not so good. It is right that net income in 3Q 2010 skyrocketed 654% to Rp145.87 billion from Rp26.33 billion net loss in the second quarter (2Q). But, it is merely underpinned by foreign exchange gain of Rp132.33 billion, while financing charges widened nearly 100%. If the forex gain is excluded, Bakrie Telecom's net income was Rp13.54 billion in 3Q 2010.  
In the operational line, Bakrie Telecom's 3Q operating income steeply fell 77.36% to Rp16.13 billion from the second quarter of Rp71.25 billion.
Operating margin continually plunged to 2.40% in 3Q 2010 from 10.66% and 14.59% in 2Q and 1Q respectively.
On the other hand, Bakrie Telecom's operating expenses increased to Rp655.06 billion in 3Q from Rp596.99 billion and Rp605.12 billion in 1Q and 2Q respectively. Does it reflect fierce competition among CDMA telephone operators?
The most important thing is Bakrie Telecom's revenue is flat. In 3Q, revenue slightly up 0.44% to Rp671.17 billion from Rp668.25 billion in 2Q. 

Disclosure: No position at the stock mentioned above.  

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