XL cuts Q3 losses by 40%

28 Oct 2015

Indonesian cellco XL Axiata, which is 66.5%-owned by Malaysia’s Axiata Group through Axiata Investments (Indonesia), says that the transformation measures put in place by its management team started to bear fruit in the third quarter of 2015. The subsidiary managed to trim its losses by 40% to IDR506 billion (USD37.1 million), when compared to the loss of IDR838 billion in the year-earlier period. The firm also reported that the bottom line was impacted by FOREX losses of IDR3.026 trillion due to the strengthening of the US dollar. Adjusted for the impact, the carrier said it would have returned a net profit normalised at IDR74 billion. Commenting on the results, XL President Dian Siswarini said: ‘The transformation agenda that we launched in April 2015 is now increasingly showing the results of a positive development. We will continue to focus on running the entire transformation agenda to strengthen our business in the future’.

XL booked 9M15 revenue of IDR16.986 trillion, a 4% decline from IDR17.636 trillion in the corresponding period of 2015, with voice call services contributing IDR6.084 trillion (up 2%), SMS a further IDR2.982 trillion, and data and VAS sales rising by 12% year-on-year to IDR5.095 trillion. ‘Other’ telecoms services, meanwhile, which includes its tower rentals business, saw sales slump 30% to IDR778 billion from IDR1.117 trillion – in part the result of the sale of assets to Solusi Tunas Pratama last year. Additionally, the cellco reported a strong upturn in third-quarter EBITDA which climbed 10% y-o-y to IDR2.200 trillion; EBITDA margin of 38% was a two-point improvement on 2014 as XL increased its focus on targeting ‘more profitable customers’. Nine-month EBITDA, however, was down 4% at IDR6.073 trillion, with an unchanged EBITDA margin of 36%.

In terms of operations, the cellco closed out September 2015 with a total of 41.5 million mobile users, down 9.8% y-o-y, as blended ARPU reached IDR32,000 (up 14%), impacted by strong sales of mobile data packages. XL reported that 20 million customers, or 49% of its total base, are now data users and smartphone penetration now stands at 39% of all users; XL smartphone ownership grew 7% y-o-y and reached 15.6 million at end-September. Furthermore, XL Axiata says it is continuing to invest in its networks and services, spending IDR3 trillion in the first nine months of this year. With a strong emphasis on mobile broadband, XL deployed almost 18,000 3G base stations in 9M15, and boosted the number of 4G sites to 1,018, taking its overall total to 56,300 base stations by the end of the period under review.

Indonesia, XL Axiata