Bhakti Investama: An Insight

Bhakti Investama (BHIT) is one of the most popular companies today. In the past week alone, BHIT has aissued at least three important information scattered on various media, such as the conversion of bonds, pier construction in Kalimantan, and the finalization of the acquisition of mines in Papua. If the news from its subsidiaries such as Media Citra Nusantara (MNCN), Global Mediacom (BMTR), and others are included, then it would be quite difficult to keep abreast of the BHIT’s latest news. Exactly what company is BHIT? In this article: 1. Business line, 2. Latest performance review, 3. Future prospect.

BHIT was established in 1989. As a holding company, BHIT has lots of subsdiaries. If it is being summed up, then there are three main line businesses of BHIT, namely media, financial service, and transportation.

BHIT’s subsidiary in media service is Global Mediacom (BMTR), formerly known as Bimantara Citra, which was established in 1982. BMTR supervise some of its subsidiary, namely Media Nusantara Citra (MNCN), MNC SkyVision, and Infokom Elektrindo. MNCN, as you know, is the holding company of the three private television stations in Indonesia, which are RCTI, TPI, and GlobalTV. MNCN is also the holding company of several media-based and entertainment companies. While MNC SkyVision, is the holding company of Indovision Cable TV. While the company of Infokom Elektrindo is functioned to meet the infrastructure needs of the MNCN and MNC SkyVision.

It could be said that BMTR’s acquisition is a major leap for Bhakti Group, after which the group then began to acquire to and fro. The first is RCTI and TPI television station. BMTR then being positioned as holding company for those two private television companies. Shortly thereafter, BMTR expands to cable tv business and supporting infrastructure for lot of media companies. Due to a wider scope, then MNCN was established to become the 'subordinate' of BMTR which holds television and other media. Much earlier, Bhakti Group itself already established BHIT as a holding company of BMTR, because Mr. Hary already had plans to explore other businesses, not just the media.

Moreover, the plan began to be realized in 2000, where Bhakti Capital (BCAP) was established. BCAP spaced apart by BMTR because BCAP is engaged in an entirely different sector, namely financial services. BCAP then acquired Bhakti Finance (I do not get certain information, what's the name of Bhakti Finance before it was acquired, and when it’s being  acquired), and founded Bhakti Securities and Bhakti Asset Management.

Feeling quite successful in the financial services business, then BHIT gets into transport business by acquiring Citra Marga Nusaphala (CMNP), which is then placed as the holding company of PT Indonesia Air Transport (IATA) and PT Global Transport Services.

Thereby, BHIT have at least five subsidiaries that also participate in IDX listings, which are the BMTR, MNCN, CMNP, IATA, and BCAP. Additionally, BHIT have had some shares of Mobile-8 (FREN), but the shares have been sold. Another one is the Global Land Development (KPIG), although not yet clear, whether it is owned by BHIT as well, but the management is under BHIT.

Then where are BHIT subsidiaries that are engaged in the mining sector? Isn’t lately BHIT declared that they had bought oil fields in Papua and eight KP coal in Sumatra? Currently, BHIT it is trying to expand in the mining sector, by establishing PT Bhakti Coal Resources, and acquired PT Suma Sarana. In the future, there may be more mining companies to be established and to be acquired. Possibly, later BHIT will establish another company, as a holding of those companies.

But the point is, so far, BHIT indeed still ‘trying’ in this sector. If it goes well, then probably later it will be its main income. But if not? Their focus will be back to media sector. So far, the business media that is headed by BMTR, with its ‘golden boy’, MNCN, is still the largest contributor to BHIT’s revenue, with considerable differences. In First Quarter 2010, BHIT recorded sales of Rp1.5 trillion with composition of Rp102 billion of its financial services business, Rp53 billion of its transportation service business, and the rest is more than Rp1 trillion, from the media. So it seems natural that the financial services business and transportation is functioned only as ‘side job’.

How about BHIT’s performance as a whole?

BHIT’s assets in First Quarter 2010 was Rp17.5 trillion, which is quite large, but fell slightly from First Quarter 2009 of Rp17.9 trillion. However, BHIT recorded positive growth in performance, by recording an increase in sales, operating profit, and net income. BHIT’s net profit was Rp153 billion, from previous loss of Rp124 billion. Although increased, but to be honest Mr. Hary needs to work harder to make BHIT as a really profitable company. What about the share valuation? Maybe for now it is not so important, because BHIT movement is still more influenced by speculation.

Then how about its prospect?

Mr. Hary Tanoesoedibjo is typical of ambitious entrepreneur, and we know it. Having triumphed in the media industry, he then did a lot of expansion into other areas. But for now, it appears that he can not be said to be successful in the field outside the media sector. His choice to go into natural resources sector was simply because following the steps of other entrepreneurs who see good prospects in the natural resources. We do not yet know whether he will be successful in this field like he successfully mastered 36% of television viewers in Indonesia and become a major player in the Cable TV business, or in the end, this sector will only be used as a side job just like the financial services sector and transportation. We'll see!

Original article was written on June 4^th, 2010.