PT Indosat Tbk 1H 2014 Results · 2015-11-12 · Telkomsel • Network ... data services and...

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PT Indosat Tbk 1H 2014 Results

2 Indosat Presentation 1H 2014 Results

2

Agenda

Financial and Operational Highlights

Management Focus and Key Updates

Supplemental Information

3

Financial and Operational Highlights


4

1H14 YoY Overview

Consolidated Revenue decreased 0.8% to IDR 11,613 billion

EBITDA decreased 5.3% to IDR 5,032 billion, EBITDA Margin of 43.3%

Profit Attributable to Owners of The Company increased to IDR 226 billion

Free Cash Flow increased to IDR 2,195 billion


5

2Q14 QoQ Overview

Consolidated Revenue increased 1.2% to IDR 5,840 billion

EBITDA decreased 7.3% to IDR 2,421 billion, EBITDA Margin of 41.5%

Profit Attributable to Owners of The Company decreased to a loss of IDR 574 billion

Free Cash Flow decreased to IDR 876 billion


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Financial Highlights

11,708 Operating Revenue

EBITDA

EBITDA Margin

Profit /Loss Attributable to Owners of the Company

11,613

1H-13 1H-14 YoY

-0.8%

5,311 5,032 -5.3%

45.4% 43.3% -2.0ppt

-231 226 197.9%

5,773 5,840

1Q-14 2Q-14 QoQ

1.2%

2,611 2,421 -7.3%

45.2% 41.5% -3.7ppt

800 -574 -171.1%

in IDR billion

• Improved revenue growth QoQ. • EBITDA margin YTD in line with guidance.


780 820 833 833 861 845

257 280 350 328 261 281

7

Segment Revenue Overview

Operating Revenue Breakdown

in IDR billion

1Q-14

+1.2% QoQ -1.4% YoY

2Q-14

5,773 6,056

4Q-13 3Q-13 2Q-13 1Q-13

Cellular

Fixed Data

Fixed Voice

7.9% / 0.6%

-1.9% / 3.0%

1.4% / -2.2%

• Improved cellular performance after network modernization expected to be seen in 2H14 • Continued strong demand for fixed data services & connectivity

QoQ / YoY 5,788 5,920 6,091

4,908 4,820 4,751 4,651 4,895 4,714

5,840


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Cellular revenue performance

Voice

SMS

Data

VAS

-6.4%

2Q14 YoY

1.5%

11.0%

72.1%

2.4%

2Q14 QoQ

1.9%

-0.9%

26.7% Improved execution and performance in VAS

Migration to data continued to impact voice usage

Higher effective SMS rate paid

Significant traffic increase in the modernized network; focus on data customer acquisition


55.9 56.5 53.8

59.6 59.7 54.9

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Cellular customer base

2Q-14

-2.7% YoY -8.1% QoQ

1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

Number of cellular customers

in million

2Q-14 1Q-13 1Q-14 4Q-13 3Q-13 2Q-13

Net customer additions

in million

• Rotational churn from 4Q13 and 1Q14 acquisition campaigns

-2.5

0.5

-2.7

5.8

0.1

-4.8


95 92 96 89

79 80 127 136 133 137 140 143

16.0 15.2 15.6 14.8 13.5 13.6

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ARPU stable

Voice traffic and MOU

-10.9% YoY

2Q-14

+0.4% QoQ

1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

Voice Traffic

in billion minutes in minute/subscriber

MOU

• ARPU stable on improved pricing environment • Voice traffic continued to migrate to data (VoIP)

ARPU and ARPM

26.5 27.3 28.5 27.7 25.8 26.6

1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

+3.1% QoQ -2.7% YoY

2Q-14

ARPU

in thousand IDR (ARPU) in IDR (ARPM)

ARPM

in IDR/minute


67 69 71

67 60 61

5,257 5,904 6,485

12,871

15,372

19,185

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High data usage growth

Data usage

in TByte

+24.8% QoQ +224.9% YoY

2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

SMS delivered

in billion

-11.7% YoY

2Q-14 1Q-14

+1.8% QoQ

4Q-13 3Q-13 2Q-13 1Q-13

• Modernized network enabling greater data experience and data usage growth • Increased focus on monetization in 2H14


12

Operational expenses

Cost of Service (CoS)

Depreciation and Amortization

Personnel

Marketing

as percentage of revenue

General and Administration

Total Expenses

1Q-13 2Q-13

• CoS increased due to higher network operational costs. • Increased go to market expenses following completion of modernization in Java • D & A declining in line with expectation and guidance

Total Operating Expenses

4Q-13

41.2%

36.5%

7.0%

3.7%

2.8%

91.2%

54.7%

3Q-13

41.6%

37.0%

7.2%

2.9%

2.8%

91.5%

54.6%

41.7%

37.8%

6.8%

4.2%

3.7%

94.2%

56.4%

42.4%

38.9%

8.6%

4.0%

5.2%

99.1%

60.2%

1Q-14

41.4%

34.4%

7.2%

2.8%

3.4%

89.2%

54.8%

2Q-14

43.4%

33.6%

7.3%

3.6%

4.1%

92.2%

58.5%


2,629 2,682 2,655 2,410 2,611 2,421

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Overall stable EBITDA

EBITDA and EBITDA margin

-7.3% QoQ -9.7% YoY

2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

EBITDA

in IDR billion

45.3% 45.4%

EBITDA Margin

• YTD EBITDA margin in line with guidance

43.6% 39.8%

45.2% 41.5%


Normalized net profit bridge

-180 -231

226 226 236 286

34

310

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Normalized net profit*

Net profit

+197.9% YoY -28.1% YoY

1H-14 1H-13 1H-12

in IDR billion in IDR billion 1H-14

• Net profit up on positive FX and sale of TBIG shares

Normalized Net– FX

Loss

Reported

* Net profit is Profit Attribution to Owners of the Company

Change in

Useful Life

Sale TBIG

Shares


2.72

2.17

2.54

27,099 23,931

25,598

2.23

2.01

2.32

22,224 22,133 23,379

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Balance sheet

Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA

1H-13 1H-12 1H-14

+7.0% YoY

Gross Debt

in IDR billion

Gross Debt/EBITDA

1H-14 1H-12 1H-13

+5.6% YoY

Net Debt Net Debt/EBITDA

in IDR billion

• Debt level stable, weakening IDR YoY increased debt level.

* IDR 3.8tn and IDR 3.4tn of obligation under finance lease are included in 1H13 and 1H14 respectively


45.1 46.5 41.3

24.0 27.5 28.6

2,612 2,750 2,516

1,452 1,590 1,669

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Free Cash Flow & Capex

Free cash flow

in IDR billion

-499

390 479

-1,045

1,319 876

2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

Capex and Capex/Revenue

2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

Capex

in IDR billion

Capex/Revenue

• Free cash flow positive in 2Q14 due to higher generated operating cash.


452 389

426

276 233 226

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Network Development

Number of BTS

17,452 17,668 18,214 18,871 19,892 20,585

4,645 4,781 4,993 5,409 6,363 13,328

+29.2% QoQ +51.1% YoY

2Q-14

22,097

1Q-14 4Q-13 3Q-13 2Q-13 1Q-13

2G 3G

Cellular Revenue per BTS

In IDR million

1H 2014 1H 2013

XL

Indosat

Telkomsel

• Network modernization completed for key cities in Java + Bali. • Modernization outside of Java to be finalized soon.

22,449 23,207 24,280 26,255

33,913


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Q2 in summary

19

Management Focus and Key Updates


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Developing adjacent and new businesses

People and culture

Improving cost efficiencies to enable investments for growth

Driving strong uptake, usage, monetization of our data services and developing our data ecosystem

Executing well on network modernization to improve network quality and customer experience

Our Focus


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Digital Business Snapshot

Commercial

Partnerships

Dedicated

Digital Unit

Incubation and Investments

Incubator Venture Fund

• Invest in innovative apps

and startups to capture

value beyond arpus

• Secure growth from

adjacent businesses

• Stimulate data

ecosystem through

enabling platforms

• Grow data revenue

through commercial

partnerships

1

2

3

Driver Pillar Execution

Influential global partners (Telco Operators and OTT players)


22

2014 Guidance

FY 2013 Actual FY 2014 Guidance

Consolidated Revenue Growth 6.4% Low single digit

EBITDA Margin 43.5% Low-Mid 40’s

Cash CAPEX IDR 9.33 trillion IDR 8-9 trillion


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Thank You

Any further questions?

Upcoming events 9M – 2014 Results

Indosat Investor Relations Jl. Medan Merdeka Barat No. 21 Jakarta - 10110 Tel: +62 21 30442615 [email protected]


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Disclaimer

• PT Indosat Tbk ( “Indosat” or “Company” ) cautions investors that certain statements contained in this document state its management's intentions, hopes, beliefs, expectations, or predictions of the future are forward-looking statements

• The Company wishes to caution the reader that forward-looking statements are not historical facts and are only estimates or predictions. Actual results may differ materially from those projected as a result of risks and uncertainties including, but not limited to:

• The Company’s ability to manage domestic and international growth and maintain a high level of customer service

• Future sales growth

• Market acceptance of the Company’s product and service offerings

• The Company’s ability to secure adequate financing or equity capital to fund our operations

• Network expansion

• Performance of the Company’s network and equipment

• The Company’s ability to enter into strategic alliances or transactions

• Cooperation of incumbent local exchange carriers in provisioning lines and interconnecting our equipment

• Regulatory approval processes

• Changes in technology

• Price competition

• Other market conditions and associated risks

• The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information, or otherwise

• Please be also advised that the information provided herein are merely issued to coincide with the release of Ooredoo QSC (formerly known as Qatar Telecom QSC) results for the year ended 31 December 2013, as the Company’s indirect majority shareholder that consolidates Indosat’s results in its financial statements. Subject to the completion of, including but not limited to the audit by the Public Accountant Firm on the Company’s consolidated financial statements which are prepared in accordance with the Indonesian Financial Accounting Standards (IFAS), Indosat expects to file and release its consolidated financial statements for the year ended 31 December 2013 on 30 April 2014 at the latest (“Indosat’s Official Release”). Accordingly, the information provided herein may differ from what is contained in Indosat's Official Release.

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Supplemental Information


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Credit ratings maintained

On 2 April 2014: Fitch Ratings has affirmed PT Indosat Tbk's (Indosat) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BBB'. The agency has also affirmed the Indonesia-based company's National Long-Term Rating at 'AAA(idn)'. The Outlook is Stable on the IDR and the National Long-Term Rating. Fitch has also affirmed the foreign-currency senior unsecured rating of 'BBB'.

On 14 July 2014, Standard and Poor’s (“S&P”) has affirmed its rating and outlook on PT Indosat Tbk. (BB+/Stable/NR; axBBB+/--). The stable outlook reflects the outlook on the sovereign credit rating on Indonesia (BB+/Stable/B; axBBB+/axA-2). S&P says that Indosat has adequate cushion in its covenants to absorb a more than 15% decline in EBITDA and Indosat has good financial flexibility due to its strategic relationship with parent Ooredoo, good banking relationships, and access to local and global financial markets.

On 12 March 2014, PEFINDO has affirmed its “idAA+” ratings for PT Indosat Tbk (ISAT) and its Bonds V/2007 Serie B, Bonds VI/2008 Serie B, Bonds VII/2009, and Bonds VIII/2012. PEFINDO has also affirmed the “idAA+(sy)” ratings for ISAT’s Sukuk Ijarah IV/2009 and Sukuk Ijarah V/2012. PEFINDO likewise affirmed its ratings of “idAA+” and “idAA+(sy)” for the Company’s IDR1.23 trillion Bonds V/2007 Serie A and IDR0.4 trillion Sukuk Ijarah II/2007, respectively, which will be internally financed upon their maturity on 29 May 2014. The outlook for the rating is “stable”.

On 4 March 2014, Moody's Investors Service says that PT Indosat Tbk's operating performance for

FY2013 was weaker than expected, but can be accommodated within its Ba1 rating with a stable

outlook.


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Debt maturity profile

Debt maturity profile*

In IDR trillion

0.41 0.83 0.74 0.48 0.24 0.24

7.78

0.83

3.27

1.92 1.52 0.50 1.50

1.50

2020 2019 2018 2014 2022 2017 2016 2015

IDR

USD in IDR

* Excluding obligation under capital lease


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Spectrum overview for top 4 cellular operators

10.0

900 Mhz

7.5

7.5

Indosat

Telkomsel

XL Axiata

20.0

1800 Mhz

22.5

22.5

10.0

2100 Mhz

15.0

15.0

in Mhz

Hutchison - 10.0 10.0

3.6

850 Mhz

5.0 – 7.5*

-

-

* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas

15.0**

2300 Mhz

15.0**

-

-

** Indosat: West Java Area ; Telkom/Telkomsel: Central & East Java, Papua, North Sulawesi

PT Indosat Tbk 1H 2014 Results · 2015-11-12 · Telkomsel • Network ... data services and...

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Transcript of PT Indosat Tbk 1H 2014 Results · 2015-11-12 · Telkomsel • Network ... data services and...