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Focusing to improve Customer Experience and Digitization XL Axiata revenue grew 8% YoY in Q1 2022
• Net profit Rp. 139 billion
• Revenue Rp 6.75 trillion, grew 8% YoY
• EBITDA grew 2% YoY to Rp. 3.17 trillion, Margin reached 47%
• Data revenue contribution reached 96% of total service revenue
• Data Revenue grew 10% YoY
• Smartphone penetration reached 93%
• Services traffic increased 34% YoY
• Total BTS 2G & 4G meningkat 40% YoY, BTS 4G above 83 thousand

Jakarta, May 10th, 2022. The financial performance of PT XL Axiata Tbk (XL Axiata) continued growing in the first quarter of 2022 despite facing tough competition and the national economy that has not yet fully recovered as a result of the Covid-19 pandemic. The Company managed to record revenue growth of 8% higher than the same period last year (YoY), with the contribution of data services becoming increasingly solid. During this period, the company also managed to achieve a net profit of Rp. 139 billion. This achievement was partly the result of efforts to improve customer experience and digitization supported by continuous improvement of network quality.


XL Axiata's President Director & CEO, Dian Siswarini commented, "Improving customer experience is now one of our main focuses that will help improving company performance. We believe that, rather than responding to service tariff competition, this strategy fits best to deal with ongoing business competitiveness. The results can now be felt, where in the first quarter of every year which is always tough, XL Axiata's revenue continues to grow YoY, with the contribution of data service revenue now reaching 96%, meaning that, on average, customers are getting more and more comfortable with the services we provide."


Until end of March 2022, the total number of XL Axiata 2G & 4G BTS exceeded 133 thousand units from 94 thousand in end of March 2021, with 4G BTS increasing to more than 83 thousand. The 4G network's coverage area has also increased to 460 cities/districts. In line with the government's program to close 3G BTS, the company also succeeded in closing 3G BTS faster than other operators; where there were 52 thousand 3G BTS at the end of March 2021, only 4,566 BTS remained in March 2022, with the hope that all of them will be completed by the second quarter of 2022.


The XL Axiata network's strength has been steadily increasing in line with consumers' increased use of data services. During the first 3 months in 2022, XL Axiata's data traffic increased rapidly, increasing by 34% YoY from 1,391 Petabytes to 1,857 Petabytes. This is also in line with improved customer experience, due to increased User Throughput and improved Latency during the first quarter of this year.


Faster internet access improves the usage of digital apps, such as "myXL" and "Axisnet," owned by the corporation. Since the beginning of the pandemic, both applications have seen  tremendous surge in monthly active users, offering various service packages as well as customer service options to these consumers. Thus, the increased investment that XL Axiata has implemented has proven to be very supportive for improving business performance, especially on cost efficiency and the opportunity to grow sales revenue.


In line with the company's vision to become the no. 1 Converged Operator in Indonesia, XL Axiata continues to strive to introduce converged services to the Indonesian people, while increasing its benefits. As a result, the penetration of this converged service has reached 19%, which means that the demand for this product is strong. The recent acquisition of Linknet will further support the development of this convergence product in the future. 


In first quarter of 2022, data revenue was Rp 5.91 trillion, grew 10% YoY. While EBITDA for first quarter 2022 grew by 2% YoY to Rp 3.17 trillion with EBITDA margin at 47%.


Throughout the first quarter of 2022, operating expenses increased 14% (YoY) to Rp 3.57 trillion from Rp 3.13 trillion in the same period the previous year. The increase in operational costs was driven by the increase in Regulatory Costs and Sales and Marketing Costs.


The company also managed to increase its blended ARPU to Rp 36 thousand from Rp. 35 thousand in the same period the previous year, with the number of XL Axiata subscribers also increased to 57 million and the smartphone penetration rate increasing by 3% YoY to 93%. This shows the company's ability to maintain healthy customer development.


From the balance sheet side, XL Axiata was able to maintain a healthy and controlled balance sheet position, even though the amount of debt increased in the first quarter of 2022 on a YoY basis. It was noted that gross debt increased 12% YoY and net debt increased 16% YoY. Free Cash Flow (FCF) is at a healthy level, increasing by 59%, to Rp. 1.94 trillion.


The ratio of net debt to EBITDA remains good, at 2.7x. The company has no USD denominated debt. As much as 81% 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 boost revenue growth, capitalized capex decreased 35% YoY to Rp 1.23 trillion. This decrease is due to the implementation schedule of capital expenditure despite remains the same annually. It is planned that in 2022, XL Axiata will also allocate capital expenditures with a relatively similar value to last year, around Rp. 9 trillion.


Business Opportunity in 2022


In the Indonesian Telecommunications Industry in 2022, There are a lot of opportunities in the 2022 Indonesia Telecommunications Industry chances that the company may leverage to improve their future performance. These opportunities include the following: first, economic recovery is predicted to be carried out in line with the predicted easing of Covid-19 in 2022, which means economic growth is ready to recover again. Second, the digital way working will produce a long-term structural demand for data, including in schools and in people's daily lives.


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. Furthermore, related to the existence of the Omnibus Law, where the regulation brings long-term positive opportunities for the industry through the efficiency of capex and opex for 5G and other benefits.


We see very broad development opportunities for Converged Services in the future. On the one hand, this service will be able to meet customer needs for products that can provide fast and stable internet access, can be shared by a family, and offer a variety of conveniences and other 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, this will greatly support the development of the convergence business in the future.

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