PT. Indosat Tbk.
2016 was the year of data price war
Summary
Competition in data services pricing was very though in 2016. All operators competed to offer very
cheap data services price and bundled with various trade marketing program that is very attractive
to win retailers/outlets engagement.
Hutch 3 consistently offered outlets championship/league program on a seasonal basis that was
targeting big outlet segment (wholesales) for a high revenue target with a great prize. Hutch 3
consistently offered Low price in Low quota in the beginning of 2016, then reduce the price further
in mid-2016 due to XL movement in competition.
XL surprisingly changed its move from campaigning value to offering very cheap data prices in
mid-2016. For 1 GB product XL has significantly lowered the trade price 50% in Q3 2016 compared to
the offering in beginning 2016. This was also followed by a decreasing price in 2 GB price.
XL with AXIS Brand has also conducted very significant price reduction data that offered a simple
and low quota. Axis also did a big move with lowering its 1 GB BRONET price ~50%, followed by
its 2 GB reduction. XL and Axis aggressiveness in very cheap data offers was triggering some
responds from competitors including Indosat.
Facing 2017
It seems that facing 2017 all operators began to try to increase the price
of data services.
Hutch 3 has started to increase in offering its 1 GB in Feb 2017. The
same increase also happened for 2 GB package.
XL also increased its 1 GB price, followed by increasing its 2 GB price.
Financial and
FY16 YoY Overview
Consolidated Revenue increased 9.0%
from IDR 26,769 billion to IDR 29,185 billion
EBITDA increased 12.1% from IDR 11,473
billion to IDR 12,864 billion, EBITDA Margin
reached 44.1%
Profit Attributable to Owners of The Parent
increased from a loss of IDR 1,310 billion to
a profit of IDR 1,105 billion
4Q16 QoQ Overview
Consolidated Revenue increased 1.0%
from IDR 7,583 billion to IDR 7,660 billion
EBITDA decreased 0.8% from IDR 3,425
billion to IDR 3,398 billion, EBITDA Margin
reached 44.4%
Profit Attributable to Owners of The Parent
decreased 37.8% from IDR 417 billion to
IDR 260 billion
Operating Revenue
EBITDA
EBITDA Margin
Profit (Loss)Attributable
to Owners of the Parent
29,185
FY-15
FY-16
YoY
9.0%
12,864
12.1%
44.1%
1.2ppt
1,105 184.4%
7,660
3Q-16
4Q-16
QoQ
1.0%
3,398
-0.8%
44.4%
-0.8ppt
260
-37.8%
in IDR billion
26,769
11,473
42.9%
-1,310
Financial Highlights
•
Revenue growth and EBITDA margin meet guidance while profitability strongly
improved
7,583
3,425
45.2%
997 909 989 1,044 1,190
286
228 226
238 266
in IDR billion
+1.0% QoQ
Operating Revenue Breakdown
5,904
Segment Revenue Overview
2Q-16
7,187
5,676
6,813
3Q-16
•
Quarterly cellular revenue in 4Q-16 declined after peak season in 3Q-16
•
Initiative in fixed data segment to provide IT service that was launched back in 1Q-16
continued to deliver a result to support revenue growth.
Voice
SMS
Data
VAS
1.1%
FY-16
YoY
-0.4%
46.7%
39.1%
-1.4%
4Q-16
QoQ
-3.3%
3.0%
0.0%
Digital business initiatives pushed VAS
revenue growth
Cellular Revenue Performance
- Marketing initiative focus on voice service
was able to generate growth in voice
69.7 69.8
80.5 81.6 85.7
4Q-15
+22.8% YoY +4.9% QoQ
Number of cellular customers
in million
4Q-15 in million
0.8
0.1
10.7
1.1
4.0
1Q-16 1Q-16
Net cellular customers additions
•
Number of customer continued to growth, acquiring data and traditional voice users
2Q-16 2Q-16
Cellular Customer Base
ARPU and ARPM
Voice Traffic and MOU
•
A combination of high ARPU in Java and lower ARPU in ex-Java resulting a well
managed ARPU level QoQ.
•
Voice traffic maintained high coming from ex-Java area
76
69 71
66 68
135 137
126 124 123
15.6 14.5 15.6 16.6 16.6
+6.1% YoY
4Q-15
-0.3% QoQ
Voice Traffic in billion minutes
(Voice Traffic)
in minute/subscriber
(MOU)
MOU
27.9 26.4 25.5 24.2 24.5
+1.3% QoQ -12.2% YoY
4Q-15 ARPU in thousand IDR
(ARPU)
ARPM
1Q-16
1Q-16 2Q-16 2Q-16 in IDR
(ARPM)
ARPU maintained
Data Usage
SMS Delivered
•
Increase in data traffic driven by increase in number of data user and consumption
per user
•
SMS traffic continued to decline as trend shifting toward messaging application.
59
52 55 49
44
57,276 63,987
93,641
146,060
188,101
in TByte
+28.8% QoQ +228.4% YoY
4Q-15
in billion
-26.7% YoY -11.1% QoQ
1Q-16 2Q-16 4Q-15 1Q-16
Strong Data Usage
2Q-16
•
Moderated operational expenses
•
Continued improvement in operational process
Cost of Service (CoS)
Depreciation and Amortization
Personnel
Marketing
as percentage of revenueGeneral and Administration
Total Expenses
Total Operating Expenses
2,906 2,961 3,080 3,425 3,398
EBITDA and EBITDA margin
-0.8% QoQ +17.0% YoY
EBITDA in IDR billion
EBITDA Margin 4Q-15
EBITDA margin in line with guidance
1Q-16
EBITDA performance
2Q-16 40.4% 43.5%
Net profit
Improvement in operational level combine
with stable currency movement and low
USD debt resulted positive net profit
-2,008
-1,310
1,105
+184.4% YoY +34.8% YoY
FY-16 FY-15
FY-14* in IDR billion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
2.73
23,866 24,098 21,874
Gross debt* and gross debt/EBITDA
Net debt* and net debt/EBITDA
•
Currency mixed has improved and shall continue toward lower USD debt portion
followed by further downward debt level
* IDR 4.05tn, IDR 3.97tn and IDR 3.51tn of obligation under finance lease are included in FY14, FY15 and FY16 respectively
FY-15
FY-14 FY-16 -14.4% YoY
Gross Debt in IDR billion
Gross Debt/EBITDA
FY-16 FY-14 FY-15
Net Debt Net Debt/EBITDA in IDR billion
Balance sheet
37.6
1,663 2,117 1,910 1,603
Free cash flow
Capex and Capex/Revenue
•
Capex disbursement for FY-2016 was in line with guidance
in IDR billion-1,392
in IDR billion
Capex/Revenue 1Q-16
1Q-16 2Q-16
2Q-16
Free cash flow & Capex
3Q-16
3Q-16
in %
4Q-16
4Q-16
Number of BTS
Data User
•
4G coverage has reached 112 cities and counting
•
Data users are steadily growing with 1.7Gb/month usage on average.
23,596 23,714 23,793 23,859 24,042
23,730 25,068 25,816 26,273 27,724
3,361 3,544 3,724 4,080 4,717
1Q-16 4Q-15 1Q-16 2Q-16
34.0 31.2 35.1
39.4 40.5
+2.8% QoQ +19.1% YoY
Network & Data User
Management Focus
●
Continue to transform Indosat Ooredoo to
become the leading digital telco
in
Indonesia, both from a product offering
perspective as well as the way it interacts
with its stake holders
●
Continue to build operational excellence
and efficiency as part of the company
culture
●
To explore industry synergies to become
more efficient and effective
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)
Thank You
Investor Relations & Corporate Secretary
Jl. Medan Merdeka Barat No. 21
Jakarta - 10110
Tel: +62 21 30442615
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
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 1 December 2016, PEFINDO has affirmed its “idAAA” rating for PT Indosat Tbk
(ISAT)’sBonds VII Year 2009 Serie B of IDR600 billion and its “idAAA(sy)” rating forISAT’s Sukuk Ijarah IV Year 2009 Serie B of IDR172 billion that will mature on December 8, 2016. ISAT should be able to repay the maturing Bond and Sukuk Ijarah using its internal fund. As of September 30, 2016, it had cash and cash equivalents amounting to IDR2.4 trillion. On 13 December 2016, Moody's Investors Service has affirmed Indosat Tbk. (P.T.)'s Ba1 corporate family rating, combines The company's standalone credit strength, which reflects its established market position, their expectation of moderate growth in the cellular market, and an improving macro environment. However, competition, especially in mobile data space, will continue to pressure EBITDA margins although we expect them to remain high for the rating level around 50%.
On 9 August 2016, Fitch Ratings Indonesia has assigned National Long-Term Ratings of 'AAA(idn)' to PT Indosat Tbk's (Indosat Ooredoo: Long-Term IDR BBB/National Rating AAA(idn)/Stable) IDR3,172bn senior unsecured bonds and IDR288bn sukuk ijarah issues. The issues are launched from Indosat Ooredoo's IDR9trn bond programme and IDR1trn sukuk ijarah programme - affirmed at 'AAA(idn)' on 15 March 2016 - and are consequently rated at the same level as the programmes.
1.88
0.27 0.27
5.94
2.56
3.62
0.95 1.10
2.08
0.12 0.36
0.81
0.26
In IDR trillion
2020
2019 2022 2018
2017 IDR
USD in IDR
2021 2024
* Excluding obligation under capital lease
2023
Debt maturity profile*
Number of BTS
* Indosat/IM2: West Java exclude Bogor, Depok & Bekasi
