pt indosat tbk 1h 2015 results - assets.indosatooredoo.com · * restated due to implementation of...

PT Indosat Tbk

1H 2015 Results

PT Indosat Tbk - 1H 2015 Results

Agenda


Financial and Operational Highlights

Management Focus and Key Updates

Supplemental Information

Financial and Operational Highlights


2Q15 QoQ Overview

Consolidated Revenue increased 7.1% to IDR 6,527 billion

EBITDA increased 5.9% to IDR 2,758 billion, EBITDA Margin reached 42.3%

Loss Attributable to Owners of The Parent decreased to a loss of IDR 278 billion

Free Cash Flow increased to IDR 1,096 billion


1H15 YoY Overview

Consolidated Revenue increased 8.7% to IDR 12,620 billion

EBITDA increased 6.7% to IDR 5,362 billion, EBITDA Margin reached 42.5%

Loss Attributable to Owners of The Parent decreased to a loss of IDR 734 billion

Free Cash Flow decreased to IDR 1,578 billion


Financial Highlights

Operating Revenue

EBITDA

EBITDA Margin

Loss Attributable to Owners of the Parent

12,620

1H-14* 1H-15 YoY

8.7%

5,362 6.7%

42.5% -0.8ppt

-734 -34.3%

6,527

1Q-15 2Q-15 QoQ

7.1%

2,758 5.9%

42.3% -0.4ppt

-278 -38.9%

in IDR billion

11,613

5,027

43.3%

-1,117

* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015

• Network modernization completion continued to lead the revenue growth YoY • EBITDA start to improve in line with revenue growth


6,093

2,604

42.7%

-456

861 845 887 916 900 935

261 281 292 262 290 271

in IDR billion

3Q-14

+7.1% QoQ +11.8% YoY

4Q-14

5,840 5,773

2Q-14 1Q-14

Cellular Fixed Data Fixed Voice

-6.8% / -3.8%

+4.0% / +10.8%

+8.5% / +12.9%

QoQ / YoY

4,714 4,651 4,925

6,104

1Q-15

5,190

6,368

4,903

6,093

• Cellular and Fixed Data developing well in 2Q compared to same period last year


Segment Revenue Overview

2Q-15

5,321

6,527

Operating Revenue Breakdown

Voice

SMS

Data

VAS

1.5%

2Q15 YoY

3.4%

83.6%

24.4%

6.6%

2Q15 QoQ

9.0%

17.7%

22.6% Increase VAS usage from various gaming & content packages

- Migration to data continues to impact voice and SMS usage and revenue

- Voice and SMS usage increased at the beginning of fasting month

Increase data usage from attractive data offerings related to month of Ramadhan in 2Q

Cellular Revenue Performance


Cellular Customer Base

59.7 54.9 54.2

63.2 66.5 68.5

4Q-14

+24.7% YoY +2.9% QoQ

3Q-14 2Q-14 1Q-14

Number of cellular customers in million

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

in million

0.1

-4.8

-0.7

9.0

3.3 2.0

1Q-15 1Q-15

Net cellular customers additions

• Significant customer additions in the past 3 quarters due to aggressive acquisition campaigns following improved network quality perception


2Q-15 2Q-15


Improving ARPU in 2Q15

ARPU and ARPM Voice Traffic and MOU

• ARPU has improved in 2Q15. It has been declining since 3Q14 in line with increasing customer base

• MOU decreasing in line with expectation and general industry trend

79 80 78 78 67 67

140 143 148 142 140 145

13.5 13.6 13.1 13.6 13.2 13.5

-0.7% YoY

4Q-14

+2.1% QoQ

3Q-14 2Q-14 1Q-14

Voice Traffic

in billion minutes (Voice Traffic)

in minute/subscriber (MOU)

MOU

25.8 26.6 28.3 28.0 24.0 25.3

3Q-14 2Q-14 1Q-14

+5.3% QoQ -5.0% YoY

4Q-14

ARPU

in thousand IDR (ARPU)

ARPM

1Q-15 1Q-15 2Q-15 2Q-15

in IDR (ARPM)

Data Usage SMS Delivered

Strong Data Usage

• Number of data users growing in line with Company’s strategy to acquire customers through data offering stimulated by improved network

60 61 57 59 56 60

15,372 19,185

20,911

29,891

39,880

46,027

in TByte

+15.4% QoQ +139.9% YoY

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

in billion

-1.8% YoY

4Q-14 3Q-14

+6.8% QoQ

2Q-14 1Q-14 1Q-15 1Q-15


2Q-15 2Q-15

Operational expenses


• Moderated operational expense • Impact from accelerated Depreciation has been diminished

Cost of Service (CoS)

Depreciation and Amortization

Personnel

Marketing

as percentage of revenue

General and Administration

Total Expenses

Total Operating Expenses

1Q-14

41.4%

34.4%

7.3%

2.8%

3.4%

89.3%

54.9%

2Q-14*

43.4%

33.6%

7.4%

3.6%

4.1%

115.5%

58.6%

3Q-14*

42.7%

33.4%

7.4%

4.9%

3.0%

91.4%

58.0%

Provision for Legal Case 23.3%

4Q-14*

45.2%

35.1%

6.9%

5.9%

3.8%

96.8%

61.7%

1Q-15

42.9%

33.9%

7.4%

3.0%

3.8%

91.2%

57.3%

2Q-15

42.1%

32.2%

6.9%

4.6%

4.2%

89.9%

57.7%


EBITDA performance

EBITDA and EBITDA margin

2,607 2,420 2,567 2,440 2,604 2,758

+5.9% QoQ +14.0% YoY

4Q-14* 3Q-14* 2Q-14* 1Q-14

EBITDA

in IDR billion

EBITDA Margin

45.1% 41.4% 42.0%

38.3% 42.7%

1Q-15

• 2Q15 EBITDA margin in line with guidance • Revenue development improving with

continued good cost management


2Q-15

42.3%


-734

Net profit Normalized net loss bridge

Normalized net profit

• 1H15 net loss impacted mainly by IDR depreciation

-231

-1,117

-734

+34.3% YoY -383.3% YoY

1H-15 1H-14* 1H-13

in IDR billion in IDR billion 1H-15

Normalized Net –

FX Loss

Reported


-637

-97


2.17

2.54

3.13

Balance sheet

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


• Total debt increased due to Rupiah depreciation and loan facility withdrawal as part of USD bond early repayment preparation

* IDR 3.4tn, IDR 3.8tn and IDR 4.0tn of obligation under finance lease are included in 1H13, 1H14 and 1H15 respectively

23,931 25,598

32,437

2.01

2.32 2.22

22,133 23,379 23,017

1H-14 1H-13 1H-15

+26.7% YoY

Gross Debt

in IDR billion

Gross Debt/EBITDA

1H-15 1H-13 1H-14

-1.6% YoY

Net Debt Net Debt/EBITDA

in IDR billion

Free cash flow & Capex

Free cash flow Capex and Capex/Revenue


• FCF strengthening with improved operating CF generation and moderating capex • Capex to revenue trend improving

in IDR billion

1,319

876

356

-206

481

1,096

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

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

Capex

in IDR billion

Capex/Revenue 1Q-15

1Q-15

27.5 28.6 25.7 25.4 23.2

21.1

2Q-15

2Q-15

1,590 1,669 1,566 1,618 1,414 1,372

Network development

Number of BTS Cellular Revenue per BTS


• Network modernization is completed • Strong network performance in already modernized areas

394 365

276 238 226 195

19,892 20,585 21,420 22,166 22,212 22,902

6,363 13,328

15,962 18,063 18,544 20,067

+5.4 QoQ +26.7% YoY

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

2G 3G

In IDR million

1H 2015 1H 2014

XL

Indosat

Telkomsel

26,255

33,913 37,382

1Q-15

40,229 40,756

2Q-15

42,969

2Q in summary


http://www.google.co.id/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCIbuzKTDgscCFdIHjgodEZkISg&url=http://icity.indosat.com/t5/Bank-Solusi-ICITY/Promo-Ketupat-Keuntungan-Berlipat-Ramadan-Indosat/ta-p/282211&ei=Nuy5VYb7INKPuASRsqLQBA&bvm=bv.99028883,d.c2E&psig=AFQjCNGvfF7KQFOtb3CJP6f8IBAMzMwXUg&ust=1438334311255153

Management Focus and Key Updates


Our Focus

Develop adjacent and new businesses

Increase cost efficiencies enabling continued investments

Improve monetization on the strong growth of data users and increasing traffic

Leverage modernized network and improved customer experience driving revenue growth

LTE roll out to further enhance data experience


2015 Guidance


FY 2014 Actual FY 2015 Guidance

Consolidated Revenue Growth 1.0% In line with market

EBITDA Margin* 41.7% Low to Mid 40’s

Cash CAPEX IDR 6.4 trillion IDR 6.5 - 7.5 trillion


Thank you


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

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.

Supplemental Information


IM2 case development


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 officialy registered at the

Corruption Court under No.

08/AKTA.PID.SUS/PK/TPK/2015/PN.Jkt.Pst.

Credit ratings


On 25 May 2015, Standard and Poor’s (“S&P”) revised its outlook on eight Indonesian companies and two Indonesian financial institutions to positive from stable. They revised the outlook on Indosat to reflect the prospect for exceptional support from Ooredoo Q.S.C. following the outlook revision on the sovereign credit rating on Indonesia. They consider Indosat to be a strategically important subsidiary of its parent but they do not consider parental support as a basis for a rating above the sovereign foreign currency rating for strategically important subsidiaries.

On 3 February 2015, PEFINDO has affirmed “idAAA” rating of PT. Indosat Tbk’s Bond VI Year 2008 Seri B amounting to IDR320 billion that will mature on April 9, 2015. ISAT should be able to repay the maturing bond using its internal fund. At the end of 2014, it had cash and cash equivalent amounting to IDR3.5 trillion and unused credit facilities totalling almost IDR3.0 trillion.

On 1 April 2015, Moody's Investors Service says that PT Indosat Tbk's (Ba1 stable)

overall FY2014 financial performance is in line with expectations, with an improved

operating performance in the second half of the year offsetting a weaker first half.

On 5 May 2015: Fitch Ratings Indonesia has assigned National Long-Term Ratings of

'AAA(idn)' to PT Indosat Tbk's (Indosat; BBB/AAA(idn)/Stable) IDR1.75trn senior

unsecured bonds and IDR250bn sukuk ijarah issues. The issues are from Indosat’s

IDR9trn bond programme and IDR1trn sukuk ijarah programme - affirmed at 'AAA(idn)' on

27 March 2015 - and are consequently rated at the same level as the programmes.

Debt maturity profile*


In IDR trillion

2019 2018 2022 2017 2016 2015

IDR

USD in IDR

2021 2025

Number of BTS

* Excluding obligation under capital lease

9.13

1.49 2.53 2.13

0.27

1.00

1.81

2.53

1.36

2.27

0.65 0.36 1.88

0.36 0.60

2020 2024

Spectrum overview


Number of BTS

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

2.5

850 Mhz

3.5 – 5.0*

-

-

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

15.0**

2300 Mhz

15.0**

-

-

** Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku

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