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Axiata Group Berhad | Annual Report 2016
OPERATING COMPANIES BUSINESS REVIEW
040
BUSINESS REVIEW
Indonesia, including Sumatra and Kalimantan,
in line with the Indonesia Broadband plan to
expand digital access in remote areas of the
country.
In 2016, XL was the first telecommunications
operator in Indonesia to commercially launch
4.5G on the 1,800 MHz spectrum, covering
Jakarta, Bogor, Depok, Tangerang and Bekasi
(Jabodetabek), Bandung, Surabaya and Denpasar.
In line with its Transformation Agenda, the
Company conducted a range of balance
sheet management initiatives with the aim of
strengthening its balance sheet and reducing
the effect of foreign currency fluctuations. This
included a rights issue in the first half of 2016
offering 2.14 billion new shares, the proceeds
of which were used to repay a loan from the
parent company. XL also completed the sale and
leaseback of 2,500 towers, and the proceeds
were used to pare down debt. Consequently,
the Company has improved its gearing ratio
and strengthened its financial position. XL’s
diligent focus on cost management resulted in
an increase in EBITDA margins to 37.6% in 2016
compared to 36.6% a year ago.
Financial Performance
In 2016, XL recorded revenue of IDR21.4 trillion,
lower by 7% YoY due to the shift in customer
behaviour which resulted in a decline in Legacy
Services revenue. Service revenue however, only
declined by 4% YoY to IDR18.3 trillion as the
decline in Legacy Services revenue was offset by
stronger growth in data revenues. Service revenue
now accounts for 86% of total gross revenue.
EBITDA reduced by 4% YoY to IDR8.1 trillion due
to the decline in revenue but was offset by cost
efficiencies achieved during the year. As a result,
EBITDA margin improved to 37.6% in 2016 from
36.6% in 2015.
XL recorded a net profit of IDR376 billion in
2016 compared to a net loss of IDR25 billion in
2015. This was driven by gains from the sale and
leaseback of towers conducted during the year
as well as the strengthening of the value of the
Indonesian Rupiah.
Outlook for 2017
Moving forward into 2017, XL will continue
focusing on the execution of its 3R
Transformation Agenda to position the business
to be more data-centric as Indonesia continues
to see explosive growth from data services
due to rapidly increasing demand. XL has laid
strong foundations with the strengthening
of both its 4G LTE network and the roll out of
UMTS900 improving quality and coverage for 3G
services. Customers are beginning to recognize
these benefits which have resulted in increased
smartphone penetration of 63% across its
subscriber base being the highest amongst
operators in Indonesia.
In 2017, XL will persist with its strategy to
acquire data savvy smartphone customers by
further improving and widening the coverage of
its data network. The Company will also ramp
up marketing and communications efforts to
educate the market on its stronger network
proposition as well as increase its innovative
data-focused bundled offerings to entice
smartphone customers. XL continues to be at
the technological forefront with the testing and
implementation of 4.5G, the first operator in
Indonesia to do so. As the Company seeks to
build a stronger, more profitable and sustainable
business, it will continue to focus its efforts
on cost efficiencies to improve returns to all
stakeholders.
BLENDED ARPU
TOTAL TRAFFIC
34
196,341
35
515,304
2015
2015
2016
2016
Rp ‘000
TB
Key Highlights
• Double-digit revenue growth for
the 2nd consecutive year
• Data revenue continued to grow
exponentially by 52%
• Strong EBITDA growth of 23%
• Commissioned Bay of Bengal
Gateway (BBG) Submarine Fibre
Optic Cable
• Demonstrated South Asia's 1st
4.5G Demo
PAT
(25)
376
2015 2016
SUBSCRIBERS
41.9
46.5
2015 2016
+11%
>100%
(normalised > 100%)
RP Billion
Million
REVENUE
22,876
21,341
2015 2016
-6.7%
-4%
EBITDA & EBITDA
MARGIN (%)
36.6%
37.6%
8,393
8,058
2015 2016
RP Billion
RP Billion
XL
About Dialog
Dialog Axiata PLC operates Sri Lanka’s largest
and fastest growing mobile telecommunications
network. The Company is one of the largest listed
companies on the Colombo Stock Exchange in
terms of market capitalisation. Dialog is also Sri
Lanka’s largest Foreign Direct Investor (FDI) with
investments totalling over USD2 billion.
Dialog, a winner of six GSMA Mobile World
Awards has the distinction of being voted by
Sri Lankan consumers as the Telecom Service
Provider of the Year for the sixth successive
year as well as the Internet Service Provider of
the Year at the SLIM-Nielsen People’s Choice
Awards for the sixth successive year. Dialog has
topped Sri Lanka’s Corporate Accountability
rankings for the past six years in succession and
is an ISO 9001 certified company.