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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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.
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
• 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%
PT Indosat Tbk – 1H 2017 Results
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.
PT Indosat Tbk – 1H 2017 Results
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
17PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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.
PT Indosat Tbk – 1H 2017 Results
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
22PT Indosat Tbk – 1H 2017 Results
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
25PT Indosat Tbk – 1H 2017 Results
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
26PT Indosat Tbk – 1H 2017 Results
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
PT Indosat Tbk – 1H 2017 Results
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 – 1H 2017 Results
• 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
29PT Indosat Tbk – 1H 2017 Results
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