DEPOK (eNBe Indonesia) - Cellular service provider XL Axiata (EXCL), third largest behind Telkom and Indosat, booked profit attributable to owners of Rp201 billion in the first quarter (Q1) of 2023, grew 44.6% year on year (y/y), as revenues rose 12% y/y to Rp7.5 trillion.
That said, revenue growth had a positive impact on Ebitda (recorded as operating profit in the table), which grew 13% y/y with a margin (OPM in the table) of 47% to Rp3.58 trillion.
Still, EXCL’s net profit margin (2.7%), while improved from 2.1% in Q1/22, was nothing compared to Indosat (7.8%) and Telkom (17.4%).
Earlier its peer, Indosat Ooredoo Hutchison (ISAT), which merged with Hutchison 3, recorded 9.8% growth in sales revenue to Rp11.94 trillion.
Effect of consolidation might have contributed to 94% jump in operating profit to Rp2.36 trillion, while net profit soared by 620% to Rp925 billion.
On expenses for XL, infrastructure expenses rose 21% y/y to Rp2.3 trillion, depreciation expenses increased 8% to Rp2.74 trillion, interconnection and other direct expenses rose 39% to Rp649 billion, salaries and employee benefits expenses increased 12% to Rp331 billion, and finance cost grew 15.6% to Rp682 billion.
On revenues, data and digital services contributed Rp6.9 trillion (up 11.3%), voice and SMS contributed Rp258 billion (flat), and interconnection & other telecommunication services (bundled packages) contributed Rp255 billion (down 3%).
XL closed the Q1 of 2023 with a total of 57.9 million subscribers, while blended average revenue per user (ARPU) increased from Rp36,000 in Q1 of 2022 to Rp40,000, in line with XL’s focus on acquiring and retaining productive customers.
Until the end of March 2023, the total number of XL Axiata BTS reached 147,516, with a total of 94,380 4G BTS units.
The number of 4G BTS grew 12.5% y/y, with the level of connectivity with fiber optic networks reaching 55% (fiberized).
XL’s financial condition was healthy as of the end of March 2023 with gross debt recorded at Rp8.83 trillion, with a gearing net debt to EBITDA ratio (including finance leases) of 2.73 times.
Meanwhile, net debt was recorded at Rp7.09 trillion. XL Axiata is recorded as having no US dollar-denominated debt.
That said, 56% of existing loans have floating rates and 44% have fixed rates. Free Cash Flow (FCF) is at a healthy level, with an increase of 12% to Rp2.17 trillion.
XL allocates capex of Rp8 trillion for this year, mostly used for network development.
It also strengthened the synergy with Link Net (LINK), which will accelerate the provision of 8 million home passes for the next 5 years, to be utilized by XL Axiata.
Unfortunately that LINK suffered net loss of Rp58.86 billion in the first quarter on squeezed margins and higher finance costs. LINK’s revenues also declined 7% in the quarter.***
