Ten Billion Dollar Club

Seven companies listed on Indonesia Stock Exchange (IDX) currently have market capitalization over US$10 billion.

They are Astra International (US$19 billion), Telkom Indonesia (US$18.3 billion), Bank Central Asia (US$15.5 billion), Bank Mandiri (US$12.25 billion), Perusahaan Gas Negara (US$11.34 billion), Bank Rakyat Indonesia (US$11.16 billion), and Unilever Indonesia (US$10.4 billion).

Combined, these Seven Giants have market capitalization of US$97.95 billion.

Looks like the 10 Billion Dollar Club will not get new member soon. Why? Because, the eight largest company, United Tractors, only has market cap of US$6.9 billion. Unless this company will grow at least another 45% this year.

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Telkom acquires AdMedika

PT Multimedia Nusantara (METRA), a subsidiary of PT Telekomunikasi Indonesia (TLKM) Tbk has signed conditional sales purchase agreement to acquire 75% shares of PT Administrasi Medika (AdMedika), a foreign-owned company in electronic healthcare network service in Jakarta.
The agreement was signed by Metra CEO Alex J. Sinaga and shareholders of AdMedika, represented by Sofian Sutantio, Ravi Kanason, and Shia Kok Fat. TLKM expects closing of this acquisition by the end of next month. Unfortunately total consideration of this acquisition is not disclosed.
AdMedika is the largest provider of healthcare administration in Indonesia. The acquisition is part of TLKM's transformation to become a TIME (telecommunication, information, media, and edutainment) company.
AdMedika has 1.2 million members with reported market share of 12% in e-health industry. The company works with 717 health providers and 26 insurance companies.

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Telkom continues early retirement program

PT Telekomunikasi Indonesia, Tbk. (TELKOM) announced that 1,252 employees will be retiring as a result of the 2009 early retirement programme. The program is mainly directed to employees aged 48 years old and above, mostly are administrative staff and access network technicians.

Telkom allocated Rp910 billion for the 2009 program, but argued annual saving of Rp300 billion in personnel cost from the program in the longer run. At the moment, Telkom has 23154 employees. About 12568 employees have retired under the early retirement program since 2002. Telkom is the largest company listed on Indonesia Stock Exchange (IDX) with market capitalization of US$20 billion.

Telkom booked net profit of Rp9.3 trillion in Jan-Sep 2009, increased almost 5% from the same period in 2008 (Rp8.9 trillion).

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ICON+ wins USO

PT Indonesia Comnet Plus (ICON+), a subsidiary of state utility firm PT Perusahaan Listrik Negara (PLN), wins two packages of universal service obligation (USO) for telecommunication in several provinces.

According to ICT Ministry, ICON+ wins package 4 (North Sulawesi, Gorontalo, Central Sulawesi, South Sulawesi, South East Sulawesi, Maluku, and North Maluku) with negotiated price of Rp274 billion. ICON+ competitor is PT Indonusa System Integrator.

The company also wins package 5 (Papua and West Papua provinces) with negotiated price of Rp455 billion. ICON+ is the only bidder for this package.

ICT Ministry had earlier named PT Telkomsel, a subsidiary of Telkom, as the winner of five other USO packages with combined offer of Rp1.64 trillion or about US$160 million.

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Arwin resigned, Rinaldi the new CEO

Shareholders finally appointed Rinaldi Firmansyah as the new CEO for PT Telekomunikasi Indonesia (Telkom) Tbk after Arwin Rasyid resigned from the post, Detik.com reported. Other directors, Garuda Sugardo, John Welly, and Guntur Siregar also resigned.

So, Telkom's new BOD line-up is as follows:
CEO: Rinaldi Firmansyah (former CFO)
Director for Network: I Nyoman GW
Director for HR: Faisal Syah
Director for consumer: Ermady Dahlan
Director for Enterprise & wholesale: Arief Yahya
Director of finance: Sudiro Asno
Director for compliance & risk: Prasetyo
Chief Information Technology: Indra Utoyo
Board of Commissioners: Reinstalled & extended till March 2009. WOW!
So, can we conclude this is a big win for Tanri Abeng's gang?
"Arwin actually tried to do good things to clean up Telkom. But you know there are people inside & outside the company that losing out the cakes. They cornered Arwin and kicked him out completely so they could resume their activities," one Telkom executive said.
"It's clear the reshuffle at Telkom is a result of high politics at play. Rinaldi is good, but don't ask whether he is clean or not. Don't look that way. You gotta look at it as part of political deal," an investment banker said.
"The fact that Tanri Abeng's team is firm in their position clearly shown the political deal," an analyst said.
But Arwin has been regarded as President SBY's man. How come that the president let him go while VP Jusuf Kalla's man Tanri Abeng is maintained there until 2009?
"Well, we can't say whether Rinaldi is the president's man or VP's gang. He could probably the man of both guys. He may also has established relationship with MSOE Sugiharto during Bahana years when Sugiharto was CFO at Medco, while Bahana was the advisor. So, we can't simply conclude that way," one political analyst said.
Hm...two years before election, everybody's looking for something!

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Kiskenda dropped, it's Rinaldi Firmansyah?

Latest rumor on Telkom CEO, it's not Kiskenda as I posted last night. President SBY, upon the request of Minister of Finance Sri Mulyani Indrawati, finally picked finance director of PT Telkom Tbk, Rinaldi Firmansyah, as the new CEO of Telkom to replace Arwin Rasyid. Kiskenda was tipped as the strongest candidate, but dropped in the last minutes of high level discussion.

People close to the SBY's inner circle said, initially Kiskenda was the front runner because of his track record at Telkomsel. But Sri Mulyani managed to persuade SBY to select Rinaldi instead. The formal announcement would be made very soon after the shareholders meeting in the couple of minutes.
Below is Rinaldi's CV:

PERSONAL DATA
Name : Rinaldi Firmansyah, CFA, MBA, Ir.
Place and date of birth : Tanjung Pinang, 10 Juni 1960
E_mail : rinaldi_f @telkom.co.id
EDUCATION:
•Chartered Financial Analyst (CFA) – AIMR, Charlottesville, USA, 1998
•Master of Business Administration (MBA) – IPMI Jakarta – Indonesia, 1988
•Graduate of Electrical Engineering (Ir) – Institut Teknologi Bandung (ITB),1985
WORKING EXPERIENCE
- PT Telekomunikasi Indonesia, Tbk. (TELKOM), 2004-2007, Finance Director/CFO
- PT Bahana Securities, 1997-2003
- PT Tirtamas Comexindo (holding company of Hashim Djojohadikoesoemo), 1991-1997
- Citibank, 1988-1991

AWARD
- Best Chief Financial Officer in Indonesia- Asia Money Polls 2004
- Award for highest score during the examination of CFA level – I 1996
Preparation program – IPAF
- The University of Western Ontario Award of Outstanding Performance
1988 in Business Analysis Course – IPMI

ORGANIZATION EXPERIENCE
President, Asosiasi CFA Indonesia (ISIP)
Member of Endowment Fund Committee – Ikatan Alumni ITB, 2003 – present
Member of Boards – Ikatan Alumni Elektro ITB, 2003 – present
Member of Disciplinary Committee – BEJ (Bursa Efek Jakarta), 2003
Head of Research and Development (LITBANG) – APEI, 2002 – 2003
(Asosiasi Perusahaan Efek Indonesia)
President, IPMI MBA’s Class of Eight 1988
Head of Training, Merpati Putih Martial Art Organization – Bandung, 1982 – 1984

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Kiskenda, new Telkom CEO front runner

President SBY as the chairman of Tim Penilai Akhir (TPA or Final Assesment Team) has reportedly picked Kiskenda Suriahardja, CEO of Telkomsel, as the new CEO for PT Telekomunikasi Indonesia (Telkom) Tbk today, people close to The State Palace said. Kiskenda would be formally proposed as Telkom CEO to replace Arwin Rasyid in a shareholders meeting Wednesday. But things could change as other members of TPA proposed Rinaldi Firmansyah, finance director of Telkom, as an alternative candidate.

Kiskenda is one of the four candidates proposed by Ministry of State-Owned Enterprises to TPA. Other candidates are Garuda Sugardo (deputy to CEO of Telkom), Sarwoto Atmosoetarno (Head of Infrastructure Division at Telkom), and Rinaldi Firmansyah (finance director of Telkom).
"Except that President would change his mind," he reminded the situation when Rasyid was appointed in June 2005. That time, Garuda almost got the driving seat with strong support from VP Jusuf Kalla.
Kiskenda was appointed CEO of Telkomsel, a subsidiary of Telkom, in March 2005. He was the head of Telkom's Greater Jakarta operation prior to the promotion.
Telkom's strong workers union (with 25,000 members) had suggested to MSOE Sugiharto to give priority to candidates from inside the company.
Other strongest alternative candidate is Rinaldi, currently the CFO.
As for Arwin, he has been tipped as the CEO for Indosat, the second largest telecommunication provider behind Telkom which is controlled by Singapore's Temasek Holdings.

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Telkom reshuffle confirmed,

PT Telkom Tbk finally announced today that the Feb 28 extraordinary shareholders meeting should make decision on management reshuffle; keep Arwin Rasyid as the CEO with other directors replaced (plus new board of commissioners) or kick Arwin out and keep others in place (with new CEO).

The 'me or they' and 'he or us' attitude could be seen in the statements of Arwin Rasyid and Tanri Abeng (President Commissioner) published by Investor magazine this week.
ARWIN INTERVIEW:
Q: What will you do if shareholders reject the board reshuffle?
A: As a pro, I have some options. I can't disclose what options. I just hope that government is consistent and committed.
Q: You had failed to replace the board in the previous shareholders meeting?
A: I got no explanation; you better ask related minister.

TANRI ABENG INTERVIEW:
Q: Arwin once asked for board reshuffle but rejected?
A: It's true, since April he sent the letter to board of commissioner so we ask the shareholders meeting in June. I supported Arwin for the reshuffle, but shareholders didn't approve that.
Q: There is conflict between commissioner & Arwin?
A: Well, we can't have same views all the time, I respect professionalism, but if we can't get along, what can you do? If we can't maintain, you gotta make decision. When the board member felt they can't work together, we might need Arwin in other place.
Q: That's why board of commissioners demanded the replacement?
A: When the board of directors feel that they can't work together anymore. The best for Arwin and the company is to have him in another place.
Q; So, what will happen on Feb 28?
A: One of the issues will be the board of directors replacement. If Arwin could be trusted for the job again, then he could only work if there will be changes according to Arwin's demand. We heard that Arwin also want to have board of commissioners replaced.

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Telkom reshuffle: New BOC & BOD

I got mixed signals from The Inner Circle regarding management reshuffle at PT Telekomunikasi Indonesia (Telkom) Tbk. In contrast to Telkom BOC's claim that BOCs would get extension of their service and brand new BODs (majority new guys), those close to power said it would be fair to have new BOCs & BODs altogether.

Some say Arwin Rasjid will retain his post as CEO with new BOD members, others say Arwin will be replaced not by those who already in the board. "There is discourse to promote Kiskenda, CEO of Telkomsel. We have to replace the BOCs as well, including Tanri Abeng," the source at The State Palace said.
So far, we only knew that government is conducting fit/proper test for BODs, no BOCs? Is it a sign that BOCs would stay?

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Arwin Rasyid's letter to The President

Dear Mr President,
First of all, please accept my apology for writing this letter which may be not proper enough from political or administration point of few. Especially because so many intricating issues that need your fullest attention. I write to you simply because I have nobody to talk to regarding my job as CEO of the most profitable state-owned company PT Telkom Tbk.

Bapak Presiden, you're the one who convinced me to take the job two years ago with target of USD30 billion market capitalization by 2010. But since I started walking into the company's hallway, I never feel secure. I tried to please the board of commissioners & workers with higher salaries/bonuses. I tried to be nice to everybody, but board of commissioners dropped a bomb last August with the vote of no confidence letter. Since then I know that I would never trust them anymore however hard I may try.
Bapak Presiden asked me to clean up the company from KKN practices. Hope you're aware that one of the largest TV station is owned by one of our largest, uniterrupted, supplier for many years. One of Jakarta's governor candidates collected money for campaign from his wife, one of our contractor. A former minister maintain his lucrative business-political power inside the company and is collecting huge money for a president candidate to challenge you in 2009.
I have to admit, we're long way to go to reach the ideals of what Telkom should be. Performance wise, we're blessed with the monopoly, even though legally the competition has been launched several years ago. Most of our fellow citizens still have no access to telephone line.
Market capitalization jumped almost 80% last year, even though that's not a result of significant improvement in fundamentals.
We have nothing to worry about the numbers. I'm sure USD30 billion cap would be easy to get. But I'm deeply worried about future direction of the company. We're heading to shareholders meeting scheduled next month or so. I really have no problem if you ask me to go if that's for the best of the country.
But if you want me to stay, I need your full support. I can't work with those (BOC & BOD) who have no trust in me. Sorry to say that this is a situation of me or them, can't be both. Unless all of us sign an agreement before you that we'll work as a team.
Bapak President, once again, thank you for giving me the trust. Please send my best regards to Ibu Ani.

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SBY vs JK in the brawl over SOEs

Below is the list of brawls between SBY & JK over important issues at state-owned enterprises, including the management selection (member of the board of directors plus commissioners). It's almost similar with their competition in overseas trips (state visits). It's everywhere! Anybody has the original version of SBY & JK memorandum of understanding on how they would share the power when they decided to join forces in 2004 election?

The recent 'mini' reshuffle at the state-owned oil and gas company PT Pertamina could well explain the brawl. "It's clear that the former chairman of board of commissioner Martiono Hadianto couldn't get along with board of directors. Internally, we could sense that," one Pertamina executive told me this morning.
"The replacement is not merely a management issue, it's a political issue. Everybody knows Martiono was seen as VP's man, while his successor has close relationship with the president," said one executive at SOE who happens to be proposed by MSOE Sugiharto as commissioner at Pertamina but failed to get approval from The Final Evaluation Team (TPA, which selects executives for SOEs).
"Now the balance at Pertamina is two VP's men and two president's men, another one represents SOE Ministry who happens to be close confidante of Sugiharto," executive at the MSOE said.
A week before that, major shakeup occured at another giant SOE, PT Perusahaan Gas Negara (PGN) Tbk. This time, Sutikno named as the new CEO, replacing WMP Simanjuntak (appointed president commissioner).
"Some says Sutikno got the position thanks to strong lobby from PAN's chairman Sutrisno Bachir. But don't expect they'll confirm that. Sutikno is known for his close relationship with Amien Rais, key patron leader of PAN. So, this is a political bargaining as well," another SOE executive said.
But where is the brawl?
"Actually, VP proposed other candidate for PGN but TPA picked Sutikno. As a result, there is on-going battle for other posts still vacant," the executive said.
The ugliest brawl is actually at PT Tambang Batubara Bukit Asam Tbk, the state-owned coal producer. TPA has yet to decide the executives and leaving the company in the hands of board of commissioners for almost one month now.
Similar situations have been emerged at other giant SOEs like PT Telkom Tbk and PT PLN. Look at how the board of commissioner of Telkom led by Tanri Abeng (key ally of VP) sent a letter to Sugiharto in late August asking for Arwin's replacement.

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Telcos social responsibility: Lower tariff please!

Three major telecommunications players, PT Telkom Tbk, PT Excelcomindo Pratama Tbk, and PT Bakrie Telecom Tbk reported sharp rises in profit in the first nine months, The Jakarta Post reported. Good news for shareholders and investors. But significantly lower telecommunication tariff would be a better news to read!

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Telkom accomplish Bukaka SingTel acquisition for US$256 million

Giant telecommunication operator PT Telkom Tbk has accomplished the acquisition of assets and operation of PT Bukaka SingTel Indonesia (BSI) through reverse agreement mechanism at around US$256 million.

Arwin Rasyid, Telkom CEO, said yesterday that the acquisition has been completed. He didn't disclose the acquisition price. But Telkom finance director Rinaldy Firmansyah said BSI deserved to get fix investor revenue (FIR) of Rp55.6 billion per month from October 2006 to June 2007 plus Rp44.25 billion/month from July 2007 to December 2010 as compensation. It means Rp2.358 trillion or somewhere around US$256 million.
BSI was established in October 17, 1995 to build telecommunication infrastructure in eastern part of the country under a cooperation agreement with Telkom as the monopolist for the span of 15 years. Shareholder composition was PT Bukaka Telekomindo International/BTI (51.5%), SingTel (40%), and Transpac Capital Pte Ltd (8.5%). BTI is a wholly-owned subsidiary of Bukaka, a group of business controlled by VP Jusuf Kalla's family. Muhammad Abduh, VP's special staff, was once the chairman of BSI with Kalla brothers (Achmad & Suhaeli) as commissioners.
But in July 5, 2002, Green View Finance Offshore Ltd bought all shares Bukaka in BSI at undisclosed price. No information available about Green View Finance Offshore. Whoever, BSI clearly got the deal, with income of Rp44.25 per month in 51 months while Telkom will take care operation, maintenance, and development of the contract. BSI is reportedly invested US$300 million in the project. High return, right?

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Telkom buyout Bukaka-SingTel

Investor Daily reported that PT Telkom Tbk has concluded the negotiation on the acquisition of telecommunication assets developed and owned by PT Bukaka SingTel Indonesia at US$200 million.

The newspaper quoted Arwin Rasjid, Telkom CEO, admitting the negotiation has been done and both parties are drafting the agreement to be signed next month.
Bukaka SingTel is a JV between Bukaka Group, a company controlled by VP Jusuf Kalla's family and SingTel--a company controlled by Singapore-government's investment arm Temasek Holdings.
For backgrounds, read my previous post: Telkom & Bukaka SingTel buyout.
See, that's why Telkom squeeze customers all the time, keep increasing the tariff and block the competition. Wake up!

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Telkom build up profit, when the tariff will go down?

It's kind of boring to put a note on PT Telkom Tbk's financial report. For years, the company has built up huge amount of profit at the expense of ordinary citizens who pay higher and higher telephone cost.

Today, Telkom published its first half financial result in which the state-owned company booked net profit of Rp5.8 trillion, jump 53% from first half 2005. This is a good news for investors. Good news for government to collect more taxes. But telephone users?
The company also reported impressive revenue growth of 23.8%. Cellular contributes the largest growth, followed by data and internet. But, interconnection increased significantly as well from Rp3.63 trillion to Rp4.116 trillion. Ah, that's why Telkom as the incumbent has no willingness to cut the interconnection tariff that would open up competition in the market.
Anyway, when Telkom will cut the cost for fix telephone service or boost teledensity in areas like my hometown in Flores?
Indonesia, according to many studies, already the most expensive nation in South East Asia when it comes to telephone costs, yet the lowest in terms of teledensity. These are also the reason why it's so difficult to lure in investment, including in the remote, yet beautiful areas, like Flores or other areas in Eastern part of the country.

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Executive salaries & bonuses

This is an ongoing work on salaries and bonuses for Indonesian executives. Competitive enough to shopping frequently at the up-coming high-class Harrods store in Jakarta.



1) Arwin Rasjid, CEO of TELKOM: Net salary for 2006 = Rp108 million/month (USD12,000). Bonus for 2005 = Rp1.58 billion (US$176,000). Other members of BOD/BOC of Telkom get salary and bonus with the following formula: Deputy CEO = 95% of CEO, directors = 90%, president commissioner = 40%, other commissioners = 36%. You can calculate yourself of how much Mr Tanri Abeng (president commissioner) get or commissioners such as economist Arif Arryman.

2) Dwi Sutjipto, CEO of SEMEN GRESIK: Net salary : Rp95 million/mo (USD10,500) and bonus = Rp1.068 billion (USD118,000). Other members of BOD/BOC as follows: Deputy CEO = 100% of CEO, directors = 90%, president commissioner = 40%, deputy = 40%, and commissioners = 36%. Total management bonus = Rp14.31 billion (inc for subsidiaries).

3) Saiful Imam, CEO of ADHI KARYA: Net salary: Rp42 million/mo (USD4,600). Bonus = Rp220 million. Directors = 90% of CEO, president commissioner = 40%, commissioners = 36%. Total management bonus = Rp1.459 billion.

4) President commissioner INDOSAT : Rp1.7 billion (total package)/year; commissioners (average): Rp1.567 billion/year. Name of commissioners: Roes Aryawijaya (deputy minister of SOEs), Eva Riyanti Hutapea (former INDOFOOD CEO), Setyanto P. Santosa (former TELKOM CEO), and Soeprapto (former assistant to Army Chief of Staff).

5) Dedy Aditya Sumanagara: CEO of Aneka Tambang (ANTAM): Salary: Rp47 million/mo plus bonus (2005 FY) = Rp983 million (USD108,000). Formula of salary + bonus for BOD and BOC is similar to ADHI KARYA.

Remember that the actual amount of money these guys take home might well above that.
But the above list could answer my previous question of why Harrods eager to open its outlet in Jakarta while it failed in Singapore.

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No management reshuffle at Telkom

Despite earlier calls for a management shakeup, the shareholders meeting of PT Telkom Tbk, the largest company at Jakarta Stock Exchange (JSX) by market caps, on Friday decided not to do that.

MSOE Sugiharto, on behalf of the government as the biggest shareholder at the telecommunication giant, in his letter to the shareholders meeting argued against the shakeup and additional directors as proposed by the management.
Both president commissioner Tanri Abeng and CEO Arwin Rasyid maintaned in their position.
Representative from Telkom's workers union attending the meeting urged the management to be solid as they sensed disharmony between them. Competition between directors is reportedly behind the shakeup issue emerged late last week.

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Telkom management reshuffle

Government as the largest shareholder will likely to reshuffle the management of PT Telkom Tbk, the largest company at Jakarta Stock Exchange by market capitalization, at the meeting scheduled June 30, Antara news agency reported today.

Muhammad Said Didu, secretary of the ministry of state-owned enterprises (MSOEs), said besides the replacement of BOD and BOC, number of directors would also be added three to make it 10.
The reshuffle has also something to do with the prosecution of two members of BOD in a VoIP scandal that led to corruption charges. But others simply on political reasons.
Antara quoted parliament member Syafrin Romas (National Awakening Party/PKB) saying he heard of the plan to oust Arwin Rasyid and Tanri Abeng, both president of BOD and BOC at Telkom. Arwin was appointed Telkom CEO in a shareholders meeting June 2005 along with other BOD members such as Garuda Sugardo (deputy president), Rinaldi Firmansyah (finance), Abdul Haris Matondang (infrastructure & network), Aris Yahya (corporate and wholesale), Guntur Siregar (consumer), and John Welly (human resources and development). Police detained Welly early this year on VoIP scandal. Siregar has been named a suspect in the case as well.
In the last few weeks, some groups have been bussy to launch maneuvers to reshuffle Telkom's management. Some political parties are reportedly not happy with the current officers and working hard to install their guys at the company including to push additional positions at directorship level.
Telkom's Workers Union had warned shareholders not to lift the risk management to director level as that would only add bureaucracy in the company. But political parties love the idea so they could share the directorships between them.
Seminars have been conducted in the last few weeks to pressure government to reshuffle Telkom management, including Arwin, an outsider at the company. (Arwin, a banker, was president director of Bank Danamon and vice president of BNI---the state owned bank).
Appointment of BOD and BOC at SOEs have always been subject to political pressures. During Soeharto years, it's he himself who appoint the BOD/BOC and the appointees only need to loyal to him. But 1998 reform has changed the political landscape in the country with nobody has clear power in hands and as a result they share the positions in SOEs as part of political calculations and games. And to maintain a position in the BOD/BOC, people have to have loyalty to some powerbrokers.
So, who will be the new CEO at Telkom? Some mentioned Garuda Sugardo and Abdul Haris Matondang. "People close to the State Place wanted Garuda to replace Arwin, while Arwin will be appointed Indosat CEO after Hasnul resigned this month," people close to the issue said. Garuda is reportedly close to president SBY's inner circle.
How about BOC?
The current Telkom BOC is consisted of Tanri Abeng (Chairman), Anggito Abimanyu (government economist), Gatot Trihargo, P. Sartono, and Arif Arryman (economist from Econit).
Tanri is a close friend to Vice President Jusuf Kalla and coordinating minister for people's welfare Aburizal Bakrie. Tanri has been named a suspect in a corruption case but managed to maintain his position at the company. No names tipped so far, but we'll know in the next few days.

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State-owned enterprises: From bad to worse

Most newspapers quoted Sugiharto, minister for state-owned enterprises (MSOEs), today on the performance of SOEs in 2005 with different tones. The largest newspaper Kompas, for example, put as the headline about the loss-making SOEs (31) with total losses of Rp6.11 trillion in 2005 against Rp4.84 trillion in 2004 (27 companies). Meanwhile, number of SOEs that booked profit decreased from 113 to 108.

There's always excuse, as usual, that MSOE claimed higher net profit at Rp40.68 trillion against Rp37.79 trillion. In fact, if we look at the details, as available at Kompas, overall performance were decreased. Why? Because three companies, Pertamina, Telkom, and Semen Gresik booked higher profit of Rp7 trillion in 2005. Should other companies recorded the same performance as 2004, total profit from SOEs should have increased by minimum Rp7 trillion, right?
But the problem with Sugiharto's report is the data is not valid yet, especially because no valid data on Pertamina's performance. MSOEs put Pertamina's profit at Rp15.44 trillion as projected data, not actual profit. Even the 2004 profit is still listed as projected profit.
Unfortunately, no newspapers published the data about total assets of SOEs in 2005 against 2004. But some says total SOEs assets were around Rp1,000 trillion and that would translate to around 4% ROA.

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PGN directors get Rp7bn bonus

This is the time to calculate the bonuses for the management of our state-owned companies. Let me start with PT Perusahaan Gas Negara (PGN) Tbk, the third largest company at Jakarta Stock Exchange (JSX) by market capitalization (Rp46 trillion or around US$5 billion), the second biggest listed SOE behind PT Telkom Tbk.

The shareholders meeting last week agreed to give Rp7 billion bonus to the management. Here's the breakdown:
President director WMP Simandjuntak: Rp999 million (US$108,500);
Directors: 90% of the president
President commissioner: 40% of the president director
Commissioners: 36% of the president director
How much is the salary? PGN's president director net salary: Rp55 million (US$6,000) per month. Others follow the formula for bonus payment. But don't ask how much these guys really make each month...it's totally different issue. We have to add the benefits, including Golf memberships, and hopefully no more under-the-table payments from suppliers or business partners...But if they still make money from such practices...the amount could be multiplied hundreds times.

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