Pages

Thursday, March 10, 2011

PT. Indosat Tbk

by Samuel Securities

Highlights:

ISAT’s FY10 net profit dropped by 56.8% YoY to only Rp647.2bn vs Rp1.498.2bn in FY09. On the other hand, the company’s revenue grew by 5.2% YoY to reached Rp19,79tn compared to Rp18.82tn in FY09 and EBITDA also rose by 9.7% YoY to Rp9.62tn.
Net margin eroded by 4.7 bps to only 3.3%, while EBITDA margins managed to improve by 2 bps to 48.6% from 46.6%.

Cellular revenue managed to grow by 12.1% YoY to Rp16.02tn while the non-cellular declined by 16.7% YoY to Rp3.77tn. Total cellular subscriber grew significantly by 34.2% YoY to 44.3mn units compared to 33.0mn units in FY09.


Comments:

The company’s revenue and EBITDA came relatively in-line within our estimate while its bottom line was largely below ours and consensus’ as it only accounted for 69.7% and 67% from the estimates. ISAT’s cellular revenue also came in-line within our estimate.

The management cited that the lousy bottom line figure was largely due to lower forex gain, higher interest expense and heightened depreciation & amortization (D&A) expense. While, we had only anticipated higher D&A expense in our assumptions.

The company had also refinanced Rp5.9tn of its debt comprised of Rp2.6tn bank loan and Rp3.3tn early repayment of its bond, using the proceed from its global bond issuance.

Action & Recommendation:

We still maintain our recommendation on ISAT as it is still unclear the exact cause of the company’s lower than expected earnings. However, we anticipated potential downgrade on our earnings estimate due to escalating interest expense. The company will release its full financial report on 24th March. Maintain HOLD

No comments:

Post a Comment