Jakarta, 21 February 2022. PT XL Axiata Tbk (XL Axiata) succeeded in improving the company's performance throughout 2021 recording revenue of IDR. 26.8 trillion, an increase of 3% compared to the same period last year (YoY) and net profit of IDR. 1.3 trillion, highest since 2013. In addition, the company is also able to increase its network strength for increasing better customer experiences and digitalization, which will ultimately support the achievement of business efficiency and sales.
XL Axiata's President Director & CEO, Dian Siswarini, said, “We have used more capital expenditure (capex) in 2021 in improving network performance as well as digitalization to provide the best customer experience. Our focus is not price competition, but more in providing and delivering the best customer experience as well as creating values to our customers”.
Dian added, industry consolidation is positive for the competition as it creates more balanced industry structure. This means the focus of market stakeholders will be directed to customer experience rather than tariff game. Therefore, XL Axiata investment on network and digitalization is the strategy of the company to provide the best customer experience.
At the end of 2021, XL Axiata has a total of 162,282 BTS, with 4G BTS reached to 77,204 BTS. Meanwhile, the fiberization has reached more than 50% of site. The area served by the 4G network has also increased to 458 cities/regencies.
The continued strengthening of the XL Axiata network is in line with the increased use of data services by customers. In 2021, XL Axiata data traffic increased rapidly by 34% YoY, to 6,549 Petabytes. This increase is also consistent with the access speed, which has increased by 20% since the beginning of the year.
Faster data access benefits the company's digital applications, such as myXL and Axisnet. Since the start of the pandemic, the two apps, which offer a variety of service packages to customers, have each seen an increase of up to 3.5x in monthly active users. As a result, the increased investment that we have made has proven to be very beneficial to the business, particularly in terms of cost efficiency and opportunities to increase product sales.
In order to achieve the company's vision of becoming the #1 converged operator in Indonesia, the company continues to strive to introduce converged services while increasing its benefits. As a result, the penetration of this converged service has reached 11%, indicating that there is a high demand for this product. The recent acquisition of LinkNet will greatly aid in the future development of this converged product.
XL Axiata made it through 2021 which was challenging. Competition in the industry remains very tight, while people's purchasing power has not fully recovered as the impact of the Covid-19 pandemic continues to loom. However, the company was able to record a good performance. Despite revenue increase, the company also succeeded to obtain a net profit achievement of IDR. 1.3 trillion
In the fourth quarter of 2021, the company's revenue increased by 2% compared to the third quarter of 2021 (QoQ) to IDR 6.96 trillion, of which IDR 6.5 trillion was service revenue. EBITDA throughout 2021 was recorded to have increased by 2% (YoY) to IDR 13.28 trillion, with a margin of 50%.
Throughout 2021, operating expenses increased by 4% (YoY) to IDR 13.47 trillion from IDR 12.95 trillion in the previous year. The increase in operational costs was driven by the increase in Regulatory Costs and Sales and Marketing Costs.
Apart from recording the highest net profit since 2013, the company was also able to increase the contribution of data revenue to 94% and smartphone penetration to 92%, the highest in the industry. Data revenue as of the end of 2021 was recorded at IDR 23.42 trillion, up by 5.4% YoY.
The company also managed to maintain its blended ARPU at IDR 36 thousand, with the number of XL Axiata customers by the end of 2021 as many as 57.9 million and the smartphone penetration rate increased by 4% YoY to 92%. This shows the company's ability to maintain healthy customer development.
From the balance sheet side, XL Axiata was still able to maintain a healthy balance sheet position, even though total debt increased throughout 2021. It was noted that gross debt increased by 9.9% YoY and net debt increased by 19.2% YoY. Free Cash Flow (FCF) is at a healthy level, although it has fallen by -51.3%, to IDR. 3.37 trillion due to an increase in capital expenditure (capex) to support network development and improve customer service.
For the net debt ratio to EBITDA is also still good, reached 0.6x. The company has no USD-denominated debt. As much as 70% of the existing loans have floating interest rates and the payments can still be managed for the next two years.
To finance network development and drive revenue growth, XL Axiata has spent a larger capex. Throughout 2021, capitalized capex increased by 61.2% YoY to IDR 9.92 trillion, and it is planned that in 2022 XL Axiata will also allocate capital expenditures with the same relative value of around IDR. 9 trillion.
Business Opportunity 2022
There are a number of positive opportunities in the Indonesian Telecommunications Industry in 2022 that companies can take advantage of to improve future performance, namely first, economic recovery is estimated to be carried out in line with the estimated easing of Covid-19 in 2022, which means economic growth is ready to recover again. Second, the digital way of working, including in schools and people's daily lives, will create a long-term structural demand for data.
Furthermore, there is a potential increase in demand for fixed broadband (FTTH) services due to the demands of working from home and working in a hybrid manner. Then it is also related to the existence of the Omnibus Law, where this regulation brings positive long-term opportunities for the industry through the efficiency of capex and opex for 5G and other benefits.
We see very broad opportunities of Convergence Services in the future. This service will be able to meet customer needs for products that can provide fast and stable internet access, can be used by one family, and provide many conveniences and additional benefits, such as access to entertainment services. On the other hand, from a business perspective, converged services will also minimize churn rates and increase customer loyalty. With the acquisition of Linknet, it will greatly aid in the future development of this converged business.