XL says 2016 at least before it gets back in the black

27 Feb 2015

Indonesia’s XL Axiata says it expects to stay ‘neutral’ in FY 2015 but may return to profitability next year, as the full financial ramifications of its acquisition of PT Axis Telekom Indonesia in March 2014 begin to unwind. XL deputy CEO Dian Siswarini told reporters that the company is predicting that the ‘significant impact from the acquisition will be subdued next year’. Indonesia’s second largest cellco by subscribers reported climbing profits between 2007 and 2012, but reversed this in 2014 following its Axis buy – which was further affected by a weakening in the local currency (rupiah) last year. Ms Dian confirmed that as of 31 December 2014 its USD865 million takeover of its rivals had left it with loans of USD1.6 billion and IDR10 trillion (USD778.9 million), while combined debt interest payments stood at IDR29.6 trillion. Additionally, FOREX losses last year leapt 24.8% to IDR1.29 trillion from IDR1.03 trillion in 2013. However, its Axis buyout has also massively boosted the asset sheet, which now stands at IDR63.7 trillion, up from IDR40.3 trillion in 2013, with XL confident that in 2015 its enlarged operation will realise revenue growth of around 7% — in line with the projected forecast for the country’s telecoms industry.

Ms Dian says that to achieve this, XL is putting great store on data and is spending around IDR7 trillion this year, partly to deploy new base transceiver stations (BTS). Having already outlined plans to upgrade as many as 690 BTS in the market of Lombok – the other major island in West Nusa Tenggara besides Sumbawa – XL Axiata is planning to build around 12,400 new BTS, the same number of BTS it built in 2014, countrywide. The firm had a total of 52,012 BTS as of December last year, including those supporting 2G and 3G networks. The official also said that XL had also targeted to deploy its 4G LTE service in eight to ten cities this year, up from the current four cities covered. It launched commercial 4G services in the 900MHz band in Jakarta, Yogyakarta, Bogor (West Java) and Medan (North Sumatra) in December 2014.

Indonesia, XL Axiata