PT. Indosat Tbk. · 4 What we have improved PT Indosat Tbk –1H 2017 Results Deleveraging, USD...

PT. Indosat Tbk.

First Half 2017 Results

2

Data Price is The Heart of The Battle

PT Indosat Tbk – 1H 2017 Results

Freedom Combo

IDR 59k

5 GB

IDR 149k

37 GB

“Flash”

IDR 75k

6 GB

IDR 250k

24 GB

“Xtra Combo”

IDR 59k

6 GB

IDR 239k

42 GB

“Netmax Combo”

IDR 50k

5 GB

IDR 60k

8 GB

“Paket Internet Malam”

IDR 60k

2 GB

IDR 150k

9 GB

Free Unlimited

YouTube

Streaming

Data Roll-Over

and

5GB Stream-On

Free 12 GB

Data Quota

(01:00 – 07:00)

Rp 0.027 / kb

Rp 0.014 / kb

Op. A ISAT Op. C Average

3PT Indosat Tbk – 1H 2017 Results

Data Yield Trend

• ARPKB decline by 47% compared to last year• Indosat Ooredoo’s ARPKB has been stable for the past 3Qs after executing data

yield improvement initiative

2Q-16

2Q-17

4

What we have improved


Deleveraging,

USD debt reduction

Procurement efficiency

(scale and process)

Robust

sales distribution

83%Net Profit

growth

Efficient

Partnership model

Cost optimization

(outsourcing)

Data

Monetization

5

Focusing More in Our Core Business


Telecommunication

Infrastructure

Cellular Services

B2B ICT

Financial and

Operational Highlights

7

1H17 YoY Overview

Consolidated Revenue increased 8.4% from IDR 13,942 billion to IDR 15,112 billion

EBITDA increased 10.5% from IDR 6,040 billion to IDR 6,674 billion, EBITDA Margin reached 44.2%

Profit Attributable to Owners of The Parent increased from IDR 428 billion to IDR 784 billion

Free Cash Flow increased from IDR 1,340 billion to IDR 2,516 billion


8

2Q17 QoQ Overview

Consolidated Revenue increased 7.3% from IDR 7,290 billion to IDR 7,823 billion

EBITDA increased 15.3% from IDR 3,100 billion to IDR 3,574 billion, EBITDA Margin reached 45.7%

Profit Attributable to Owners of The Parent increased 251.1% from IDR 174 billion to IDR 610 billion

Free Cash Flow increased from IDR 1,051 billion to IDR 1,464 billion


Operating Revenue

EBITDA

EBITDA Margin

Profit Attributable to Owners of the Parent

15,112

1H-16 1H-17 YoY

8.4%

6,674 10.5%

44.2% 0.9ppt

784 83.2%

7,823

2Q-17 QoQ

7.3%

3,574 15.3%

45.7% 3.2ppt

610 251.1%

in IDR billion

13,942

6,040

43.3%

428

Financial Highlights

9

• Healthy growth in Revenue and EBITDA supported strong growth in net profit.

7,290

1Q-17

3,100

42.5%

174


989 1,044 1,190998

1,060

226238 266

241

234

in IDR billion

+7.3% QoQ+9.7% YoY

CellularFixed DataFixed Voice

-3.0% / +3.6%

+6.2% / +7.2%

+7.9% / +10.4%

QoQ / YoY

2Q-16

Operating Revenue Breakdown

Segment Revenue Overview

3Q-16

10

4Q-16

• Cellular revenue increased QoQ due to festivity of Ramadan.• Fixed data segment delivered outstanding performance supported by B2B IT services.

1Q-17

5,914

7,129

6,301

7,583

6,204

7,660

6,051

7,290

2Q-17


6,529

7,823

Voice

SMS

Data

VAS

-3.6%

1H-17vs.

1H-16

-10.3%

39.5%

17.8%

3.4%

2Q-17vs.

1Q-17

-2.2%

18.5%

5.4%Gaming and content usage grew in youth segment.

Cellular Revenue Performance

11

- Data revenue continued to outperform legacy services.

- Voice revenue increased QoQ due to better monetization during Ramadan.


80.581.6 85.7

95.696.4

+19.8% YoY +0.8% QoQ

Number of cellular customersin million in million

10.7

1.1

4.0

10.0

0.7

2Q-16 2Q-16

Net cellular customers additions

3Q-16 3Q-16

Cellular Customer Base

12

4Q-16 4Q-161Q-17 1Q-172Q-17 2Q-17


ARPU and ARPM Voice Traffic and MOU

• Higher ARPU and better monetization in voice usage during festivity of Ramadan.

7166 68

5753126 124 123 125 131

15.6 16.6 16.6 15.3 15.6

+6.5% YoY +2.0% QoQ

Voice Traffic

in billion minutes (Voice Traffic)

in minute/subscriber (MOU)

MOU

25.5 24.2 24.5 21.7 22.5

+3.7% QoQ-11.8% YoY

ARPU

in thousand IDR (ARPU)

ARPM

2Q-162Q-16 3Q-16 3Q-16

in IDR (ARPM)

ARPU and voice usage indicator

13

4Q-16 4Q-161Q-17 1Q-172Q-17 2Q-17


Data Usage SMS Delivered

• Quarterly data revenue grew faster than traffic growth, continued better data monetization.• SMS traffic continued to decline as trend shifting toward messaging application.

5549

4437

32

93,641

146,060

188,101

209,591

246,862

in TByte

+17.8% QoQ+163.6% YoY

in billion

-42.4% YoY -13.3% QoQ

2Q-16 3Q-16 2Q-16

Strong Data Usage

3Q-16

14

4Q-16 4Q-161Q-17 1Q-172Q-17 2Q-17


• Higher marketing expense in line with activities during Ramadan festivities.• Moderated operational expenses relative to revenue.

Cost of Service (CoS)

Depreciation and Amortization

Personnel

Marketing

as percentage of revenue

General and Administration

Total Expenses

Total Operating Expenses

Operational expenses

15

2Q-16

41.4%

31.3%

7.3%

4.9%

3.2%

88.1%

56.8%

3Q-16

40.6%

29.9%

6.8%

4.0%

3.5%

84.8%

54.9%

4Q-16

40.9%

29.4%

7.2%

3.5%

4.0%

85.1%

55.6%

1Q-17

42.6%

30.5%

8.2%

3.6%

3.1%

88.0%

57.5%


2Q-17

7.2%

4.2%

3.2%

39.6%

28.2%

82.5%

54.3%

3,0803,425 3,398 3,100 3,574

EBITDA and EBITDA margin

+15.3% QoQ+16.1% YoY

EBITDA

in IDR billion

EBITDA Margin

2Q-17

EBITDA and Net Profit performance

2Q-16

16

45.7%

3Q-16 4Q-16

43.2%45.2% 44.4%

1Q-17

42.5%

Net profit

-734

428

784

+83.2% YoY+158.3% YoY

1H-171H-161H-15

in IDR billion

• EBITDA margin inline with guidance.• Profitability maintained.


3.13

2.03

1.66

32,437

24,69022,365

2.22

1.85

1.48

23,017 22,438 19,960

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

• Lower debt level and improved leverage ratio continued, followed by lower interest expense.

* IDR 4.05tn, IDR 3.61tn and IDR 3.14tn of obligation under finance lease are included in 1H15, 1H16 and 1H17 respectively

1H-161H-15 1H-17

-9.4% YoY

Gross Debt

in IDR billion

Gross Debt/EBITDA

1H-171H-15 1H-16

Net Debt Net Debt/EBITDA

in IDR billion

Balance sheet

-11.0% YoY


1,057 1,147

3,616

622 1,078

Free cash flow Capex and Capex/Revenue

• Capex for 1H-17 was in line with guidance.

in IDR billion

8771,307

-186

1,0511,464

Capex (Spent)

in IDR billion

Capex/Revenue

2Q-16 2Q-173Q-16 2Q-16

Free cash flow & Capex

18

4Q-16 3Q-16

in %

1Q-17 4Q-162Q-17 1Q-17


14.8 15.1

47.2

8.5

13.8

Number of BTS Data User

• 4G coverage has reached 143 cities in Indonesia, 31 cities addition during 1H-17.

23,793 23,859 24,042 24,219 24,235

25,816 26,273 27,724 28,510 29,255

3,724 4,080 4,717 5,446 5,533

+1.5% QoQ+10.7% YoY

3Q-16

2G3G

In million

59,023

2Q-17 2Q-172Q-16

35.139.4 40.5 41.1 41.1

+0.0% QoQ+17.1% YoY

Network & Data User

2Q-16

4G

19

3Q-164Q-16

53,333

4Q-16

54,212 56,483

1Q-17

58,175

1Q-17


Management focus

& Key updates

Management Focus

21

● Continue to transform Indosat Ooredoo to

become the leading digital telco in

Indonesia by having the best digital touch

points as the way it interacts with its

stakeholders

● Continue to build operational excellence

and efficiency as part of the company

culture at the core of telco business

● To explore industry synergies to become

more efficient and effective

● To further strengthen the corporate (B2B)

offering to build a stable base through

connectivity and services.


FY-16 Actual

2017 Guidance

Consolidated Revenue Growth 9.0% In line with market

EBITDA Margin 44.1% Low to Mid 40’s

CAPEX IDR 7.3 trillion(Cash out)

~ IDR 6 trillion(Spent)

2017 Guidance


1H 2017 Actual

8.4%

44.2%

IDR 1.7 trillion(Spent)

Thank YouInvestor Relations & Corporate SecretaryJl. Medan Merdeka Barat No. 21Jakarta - 10110Tel: +62 21 [email protected]

Supplemental

Information

On September 16, 2014, the South Jakarta Attorney Office (“Kejaksaan

Negeri Jakarta Selatan”), without preliminary notification, executed the

Supreme Court’s Decision on Mr. Indar Atmanto. The execution was

done based on a quotation of the Supreme Court’s Decision, which

states, among others, that (i) Mr. Indar Atmanto is found guilty and

sentenced to eight years imprisonment and charged with penalty of

Rp300,000,000,- (if the penalty is not paid, Mr. Indar Atmanto would

serve an additional six months imprisonment), and (ii) IM2 pay the

losses sustained by the State amounting to Rp1,358,343,346,674,-.

Subsequently, on January 16, 2015, Mr.Indar Atmanto and/or his

lawyer or IM2 received the document on the Supreme Court’s decision

regarding the litigation case. As of the issuance date of the

consolidated financial statements, Mr. Indar Atmanto and IM2 plan to

conduct further legal act by submitting a reconsideration request

peninjauan kembali (”PK”).

On March 16, 2015, Mr. Indar Atmanto’s submission of Judicial Review

[Peninjauan Kembali (”PK”)] was officially registered at the Corruption

Court under No. 08/AKTA.PID.SUS/PK/TPK/2015/PN.Jkt.Pst.

On November 4, 2015, the Supreme Court’s official website announced

that the Judicial Review filed by Mr. Indar Atmanto was rejected based

on Supreme Court’s decision dated October 20, 2015. However, no

detailed information regarding the exact content of such Supreme

Court’s decision was available. As of the issuance date of the interim

consolidated financial statements, the official copy of such Supreme

Court’s decision hasn’t been received.

IM2 case development


On January 17, 2017, S&P Global Ratings affirmed its 'BB+' long-term corporate credit

rating on PT Indosat Tbk. The outlook remains positive. At the same time, they affirmed

their 'axBBB+' long-term ASEAN regional scale rating on the Indonesia-based

telecommunications company.

On 17 March 2017, PEFINDO has affirmed its “idAAA” ratings for PT Indosat Tbk (ISAT)

and its Shelf Registration Bond I/2014-2016, Bond VIII/2012, and Bond V/2007 Serie B.

PEFINDO has also affirmed its “idAAA(sy)” ratings for ISAT’s Shelf Registration Sukuk

Ijarah I/2014-2016 and Sukuk Ijarah V/2012. PEFINDO has also assigned its “idAAA” and

“idAAA(sy)” ratings to ISAT’s Shelf Registration Bond II/2017-2019 of a maximum of IDR9

trillion and Shelf Registration Sukuk Ijarah II/2017-2019 of a maximum of IDR1 trillion,

including the first phase issuance of IDR2.7 trillion Shelf Registration Bond II/2017 and

IDR0.3 trillion Shelf Registration Sukuk Ijarah II/2017.

On 12 May 2017, Moody's Investors Service has has upgraded to Baa3 from Ba1 the

issuer rating of Indosat Tbk. (P.T.) (Indosat Ooredoo). The outlook for the rating is stable.

At the same time, Moody's has withdrawn the company's Ba1 Corporate Family Rating.

The rating upgrade reflects the continued strengthening of Indosat Ooredoo's operational

metrics as well as the ongoing stabilization of its financial profile, including lower leverage

levels.

On 10 March 2017, Fitch Ratings has upgraded PT Indosat Tbk's (Indosat Ooredoo) Long-

Term Foreign-Currency Issuer Default Rating (IDR) and foreigncurrency senior unsecured

debt rating to 'BBB+' from 'BBB' and simultaneously affirmed its LongTerm Local Currency

IDR at 'BBB+'. Fitch Ratings Indonesia has also affirmed the National LongTerm Rating at

'AAA(idn)'. The Outlook is Stable.

Credit ratings


0.19 0.53 0.27

2.75

3.02

3.90

2.13

1.10

2.55

0.12

1.00 0.81

0.26

In IDR trillion

20202019 202220182017

IDR

USD in IDR

2021 2024

* Excluding obligation under finance lease

2023

Debt maturity profile*

27

2025 2026


2H17

Number of BTS

2 x 10.0

900 Mhz

2 x 7.5

2 x 7.5

Indosat

Telkomsel

XL Axiata

2 x 20.0

1800 Mhz

2 x 22.5

2 x 22.5

2 x 10.0

2100 Mhz

2 x 15.0

2 x 15.0

in Mhz

Hutchison - 2 x 10.0 2 x 10.0

2 x 2.5

850 Mhz

2 x 4.5

-

-

15.0*

2300 Mhz

15.0

-

-

* Indosat/IM2: West Java exclude Bogor, Depok & Bekasi

Spectrum overview

28

2020 2020 2020 2019 & 2026 2019Valid until


• 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

Disclaimer


PT. Indosat Tbk. · 4 What we have improved PT Indosat Tbk –1H 2017 Results Deleveraging, USD...

Documents

Transcript of PT. Indosat Tbk. · 4 What we have improved PT Indosat Tbk –1H 2017 Results Deleveraging, USD...