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Despite Challenging Industry Conditions XL Axiata Successfully Maintains A Strong Performance
• Net Profit 9M Rp. 1.02 trillion
• Revenue grew by 1.5% QoQ in Q3
• EBITDA Margin at 50%
• Data revenue contribution reached 95% of total service revenue
• Smartphone penetration reached 92%
• Service traffic increased by 9.5% QoQ
• Total number of BTS 153 thousand, BTS 4G above 69 thousand

Jakarta, 9 November 2021. PT XL Axiata Tbk (XL Axiata) recorded its second quarter of sequential revenue growth, while maintaining a positive performance throughout the third quarter of 2021. Thus, revenue grew by 1.5% compared to the previous quarter (QoQ) while EBITDA also increased by 1.5% QoQ with a healthy margin level above 50%. Positively, the total number of subscribers increased by 1.2 million during this third quarter, while maintaining a healthy blended ARPU at Rp 37 thousand.


The proportion of data revenue to service revenue increased to 95%, with an increased smartphone penetration to 92% of total subscribers. Both continue to be industry-leading metrics. XL Axiata also continued to sustain investment in the development of broadband data networks. Currently, XL Axiata's 4G network has reached 458 cities/regencies supported by 69 thousand 4G BTS. The total BTS (2G/3G/4G) currently owned by XL Axiata is 153 thousand.


President Director & CEO of XL Axiata, Dian Siswarini said, "We had to work hard during the third quarter of 2021 due to challenging market conditions. However, we continued to focus on our business transformation by end-to-end digitalization of our business processes, while also implementing artificial intelligence-based analysis to improve operational efficiency. In addition, to this, we have sustained our network investment for improved service quality to support increased traffic. On the product side, in this period we have launched the first convergence product in Indonesia, named “XL Satu Fiber”, which offers both home and mobile benefits for our subscribers.”



XL Axiata recorded total revenue during the third quarter of 2021 of Rp 6.8 trillion, of which Rp 6.3 trillion was service revenue. Meanwhile, the total revenue for the nine months of 2021 was recorded at Rp 19.8 trillion, of which Rp 18.3 trillion was service revenue. EBITDA for the third quarter of 2021 was recorded at Rp 3.4 trillion, with a margin of 50%. EBITDA for nine months was recorded at Rp 9.9 trillion.


XL Axiata continued to record sustained net profits. The net profit for nine month of 2021 was recorded at Rp 1.02 trillion, while the normalized net profit was recorded at Rp 835 billion.


Throughout the third quarter of 2021, operating costs increased by 1% from the previous quarter (QoQ), including increased sales and marketing costs due to investment in growing the distribution footprint. Furthermore, infrastructure costs have also increased due to ongoing network expansion efforts. Regulatory costs increased due to increased frequency fees while overhead costs increased due to higher consulting fees as a result of ongoing projects. On the other hand, employee costs decreased, as well as interconnection and other direct costs.


Revenue from data in the third quarter of 2021 continued to grow, and reached Rp 6 trillion, an increase of 2% from the previous quarter (QoQ). This achievement also increased the contribution of data to total service revenue to 95%, an increase compared to the previous quarter of 94%. This data income is linked to higher usage as evidenced by strong traffic growth throughout the third quarter of 2021, of 10% QoQ, from 1,572 PB to 1,722 PB. If using the calculation over a nine-month period, data traffic increased by as high as 34% compared to the same period last year.


XL Axiata was able to maintain its balance sheet in a healthy and controlled position, even though total debt increased in the nine-month period. It was noted that gross debt increased by 25% YoY and net debt increased by 28% YoY. Free Cash Flow (FCF) is at a healthy level, although it has decreased by 26% to Rp 3.6 trillion, but this is positive due to the increased capex for network rollout to deliver better service to customers.


The ratio of net debt to EBITDA is also still good, reaching 0.5x. The company has no USD denominated debt. Of existing loans, 70% has floating interest rates while repayments are manageable over the next two years.


To improve network quality and performance, XL Axiata has increased capex spend on a YoY basis. Thus for the first 9 months of 2021, capitalized capex increased by 25% YoY to Rp 6.4 trillion, while committed capex increased by 24% YoY to Rp 4.5 trillion.



Business opportunities


There are several positive opportunities in the Indonesian Telecommunications Industry. One of them is related to the merger between operators which could create a more balanced competition in the industry. Then, regarding the easing of PPKM has increased economic activity. Furthermore, the continuation of the third phase of the education quota program by the government provides an opportunity for operators to participate.  


Furthermore, the continued development of the digital way of working, schools, and everyday life has created a long-term demand for data. Another opportunity is an increase in demand for fixed broadband – fiber to the home (FTTH) services, where XL Home services are available with an increasing service area. In addition, the existence of the job creation law is also positive in the long term, including for the efficiency of capex and opex in providing 5G services.


On the other hand, there are a number of challenges that must be faced throughout the nine months of 2021. One of them is the continued intense competition between operators. The increasing intensity of competition since the end of 2020 has had an impact on the growth of the industry. Regarding the Covid-19 pandemic, which continues to overshadow and have a direct impact on the general economic recovery. Furthermore, there are also challenges related to the impact of the global supply chain that can affect raw material supplies and production.


Handling Covid-19


In facing the Covid-19 pandemic, the company has implemented a number of initiatives to protect employees and business continuity. These initiatives include vaccinating over 99% of employees and more than 95% of employees' family members, providing in-house doctors to serve Covid-19 tests for more than 8,000 employees, and continuing the work from home (WFH) policy that has been implemented since March 2020. Furthermore, a 24-hour hotline is also provided for employees who need company support, implement daily health protocols, provide PPE for front-liners, implement active digital work methods for all activities, and organize Lets Learn Program (LLP) for pandemic situations.


The company has also carried out a number of initiatives to facilitate subscribers, including providing data quota subsidies for students to support the government’s programs, providing free access to Hotlines 112, 117 & 119, and increasing capacity at 6,000 BTS 4G around referral hospitals for Covid-19. XL Axiata also provides a 15% discount for upgrading XL Priority plan up to 100GB. Furthermore, the company also ensures the availability of SIM cards at 15,000 credits kiosks/MSMEs, and adds digital sales channels and for top up.


Meanwhile, initiatives for the community include organizing the Indonesia Bangkit Vaccination Centre to help inject vaccines for almost 90 thousand residents in Greater Jakarta and Medan, as well as vaccinations through the AXIS program for students. In addition, in various provinces the company also organizes other social programs, including donations of smartphones for underprivileged students, supporting virtual learning for underprivileged students in West Java & West Sulawesi, as well as donations for communities affected by natural disasters in various regions. There are also support programs for SMEs.

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