Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PT Indosat Tbk (PTITF, Financial) reported a 12% year-on-year revenue growth for the first nine months of 2024.
- EBITDA increased by 15% year-on-year, outpacing revenue growth.
- Net profit, when normalized for one-offs, grew by 73% year-on-year.
- The company achieved USD450 million in recurring annualized synergies from its merger, exceeding initial expectations.
- Digital app users increased by 5 million year-on-year, with app users generating 50% higher ARPU than the overall base.
Negative Points
- Subscriber base declined by 0.7 million over the nine-month period.
- Quarter-on-quarter ARPU showed weakness, declining sequentially.
- Revenue decreased by 2.2% in the third quarter due to seasonality, impacting EBITDA and NPAT.
- Marketing expenses increased by 40% year-on-year due to a new business model, although normalized growth was 6%.
- Challenges in consumer demand and macroeconomic conditions, particularly during government transition, affected performance.
Q & A Highlights
Q: What factors are contributing to the decline in subscriber base despite expanding coverage in rural areas, and what is the outlook for ARPU and EBITDA margin?
A: Vikram Sinha, CEO, explained that the decline is due to SIM consolidation amid softening consumer demand and macro challenges, particularly during government transitions. ARPU has declined due to seasonal factors and SIM consolidation. The company remains confident in improving EBITDA margins through cost optimization and expects to get closer to a 50% margin in the current quarter.
Q: Can you provide an update on the broadband user growth and revenue momentum?
A: Ritesh Singh, CCO, noted that home broadband revenue grew by 1% despite IT transformation challenges. Subscriber base growth has been positive in recent months, and price increases implemented in August will have a more significant impact in Q4.
Q: What is the status of the fiber restructuring and its expected impact?
A: Vikram Sinha, CEO, stated that there is strong interest in the fiber project, with completion expected in the first half of next year. This strategic transaction will support the growth of their FTTH business.
Q: How is the GPU as a Service offering progressing, and what is the outlook for this business?
A: Vikram Sinha, CEO, reported that they have signed over 10 multiyear contracts within the first month of launching the service. They expect to close the year with a monthly revenue of $6 million, translating to $50-$72 million locked for next year. The business is expected to have high EBITDA margins.
Q: What is the impact of macroeconomic challenges on consumer purchasing power, and what are the expectations for the future?
A: Vikram Sinha, CEO, acknowledged that macroeconomic challenges, particularly during government transitions, have impacted consumer purchasing power. However, they expect improvements in Q4 as government transitions stabilize and consumer demand recovers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
