Company Update / Towers / IJ / Click here for full PDF version
Author(s): Giovanni Dustin ;Ryan Dimitry
- Net profit grew by +6% yoy in 1Q24 while EBITDA rose by +4% yoy, broadly in-line with our/consensus estimates.
- 1Q24 revenue rose by +6% yoy, forming 24/25% of our/consensus FY24F, mainly driven by robust non-tower revenue growth (+20% yoy).
- Tenancy ratio slipped down further to 1.74x. The company saw net tenancy loss of 114 likely due to non-renewals from IOH; reiterate Buy.
Net profit and EBITDA met our expectations
recorded 1Q24 net profit of Rp797bn (+6% yoy/-4% qoq), broadly in-line with our/consensus estimates at 22% of FY24F (3yr average 1Q run-rate: 23%). Meanwhile, 1Q24 EBITDA rose to Rp2.5tr (+4% yoy/-1% qoq), forming 23/24% of our/consensus FY24F - also in-line vs. 3yr average: 24%. EBITDA margin declined to 83.5% (-160bps yoy/-130bps qoq) in the quarter. Notably, cash opex grew by +18% yoy (vs. revenue growth of +6% yoy) on higher maintenance (+8% yoy) and G&A expenses (+18% yoy).
In-line revenue supported by robust non-tower revenue
1Q24 revenue came in at Rp3.0tr (+6% yoy/+1% qoq). As expected, tower revenue only slightly improved by +1% yoy (first yoy growth since 4Q22) though still declined by -1% qoq, likely due to non-renewals from IOH. Meanwhile, non-tower revenue growth remained robust (+20% yoy/+5% qoq), primarily driven by its fiber business, as its revenue-generating fiber increased to 186.5k km in the quarter (1Q23: 162.3k km/4Q23: 178.3k km). Utilization ratio also rose to 1.88x (vs. 1.86x in 4Q23).
Lower tenancy ratio, likely due to non-renewals from IOH
Tower site increased by 491 sites qoq in 1Q24 but tenancy fell by 114 tenants, likely due to some non-renewals from IOH. Thus, tenancy ratio declined to 1.74x in 1Q24 (1Q23: 1.81x/4Q23: 1.78x). Blended lease rates was flattish at Rp12.8mn/month (1Q23: Rp12.8mn/4Q23: Rp12.9mn). As of 1Q24, had 31.0k tower sites and 54.2k tenants.
Reiterate BUY with a lower TP of Rp1,100
We await more details from earnings call (2ndof May), but overall, the results met our expectations. We fine-tune our FY24-25F EBITDA by -1%, to factor-in FY23 and 1Q24 data points, and cut our EV/EBITDA multiple target from 10x to 9x to better reflect its TTM valuation and sector-related near-term challenges (including potential telco consolidation and higher-for-longer rate environment). Maintain Buy on with a lower TP of Rp1,100 (vs. Rp1,300 previously). Risks: 1) low tenancy growth; and 2) pressure on lease rates.
Sumber : IPS
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