Company Update  / Towers  /  

MTEL

IJ  /   Click here forfull PDF version 
 Author(s):  Giovanni Dustin    ;RyanDimitry 

• Net profit/EBITDA reached Rp521bn/Rp1.8tr (+4%/+10% yoy) in 1Q24, in-line at 24% of our/consensus full-year estimates.
• Revenue grew by +7% yoy in the quarter, also in-line with our/consensus expectations;
  EXCL
  and IOH were the key drivers.
• Tenancy ratio improved marginally qoq to 1.52x. We fine-tune our FY24-25F EBITDA by 1-2% to factor-in latest data points; reiterate Buy.

Net profit and EBITDA met our and consensus expectations supported by solid topline delivery and better cost discipline
Net profit reached Rp521bn (+4% yoy/-10% qoq) in 1Q24 - in-line with our/consensus forecasts (24% of our/consensus FY24 estimates). 1Q24 EBITDA rose to Rp1.8tr (+10% yoy/-1% qoq) and also in-line (24% of our/consensus estimates). EBITDA margin improved to 83.5% (+192bps yoy/+300bps qoq) in the quarter. Notably, cash cost declined by -20% yoy/-4% qoq in the quarter, partly due to lower contribution from the low-margin non-tower businesses.
In-line revenue driven by

EXCL

and IOH
1Q24 revenue came in at Rp2.2tr (+7% yoy/-5% qoq), in-line at 23/24% of our/consensus full-year estimates. Revenue from Tsel declined by -13% yoy/-6% qoq in the quarter likely due to ongoing renewal process. Revenue from

EXCL

rose by +8% yoy/+34% qoq, which we believe was largely driven by its organic rollout in ex-Java. Meanwhile, revenue from IOH rose by +13% yoy/+19% qoq in the quarter, as lease renewals in 2H23 was finally fully recognized in the quarter.
Tenancy ratio improved marginally qoq to 1.52x

MTEL

added 399 new tenants qoq in the quarter, while net tower site addition reached 121 sites qoq. As of 1Q24,

MTEL

had 38.1k tower sites and 57.8k tenants, which implies tenancy ratio of 1.52x (1Q23: 1.46x/4Q23: 1.51x). Blended lease rates declined to Rp11.9mn/month (1Q23: Rp12.2mn/4Q23: Rp12.9mn), optically lower due to the ongoing renewal process.
Reiterate BUY with a lower TP of Rp800
Despite the in-line results, we fine-tune our FY24-25F EBITDA by 1-2%, mainly to factor-in FY23 and 1Q24 data points. We also cut our EV/EBITDA multiple target from 11x to 10x (still +1SD) to better reflect its TTM valuation and sector-related near-term challenges (including potential telco consolidation and higher-for-longer rate environment). In sum, we maintain our BUY rating on

MTEL

with a lower blended valuation-based (DCF and EV/EBITDA multiple) 12-month TP of Rp800 (vs. Rp880 previously). We await more details from

MTEL

's info memo and earnings call on 24thof April. Downside risks: 1) low tenancy growth; and 2) pressure on lease rates.


Sumber : IPS