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Recent news : Indosat (ISAT) had to lose up to Rp. 2.40 trillion last year

The year 2018 seems to be a tough year for PT Indosat Tbk (ISAT) because the halo-halo company must suffer a net loss of Rp 2.40 trillion. Whereas in the previous year, ISAT still posted a net profit of Rp 1.13 trillion.

Based on ISAT's financial report on the Indonesia Stock Exchange (IDX) website, on Tuesday (5/3), ISAT's revenue had to decline considerably to 22.68% year on year (YoY) to Rp 23.16 trillion from the previous year of Rp 29, 92 trillion.

Telecommunications operators began to discuss consolidation

The three sources of income from ISAT are compact, namely cellular revenues, multimedia revenues, data and internet communications, and fixed telecommunications revenues. As for each income of IDR 18.02 trillion, IDR 4.38 trillion and IDR 729.4 billion. ISAT cellular revenue dropped 26.38%. Multimedia, data communication, ISAT internet revenues fell 3.10%, and telecommunications revenues remained down 20.12%.

Even if we see the total burden, ISAT experiences the efficiency of 8.84% to IDR 23.60 trillion compared to the previous year of IDR 25.89 trillion.

ISAT loos of Control

ISAT also recorded profits associated with the loss of control over subsidiaries amounting to Rp 924.89 billion. This is the profit from the sale of shares of PT Artajasa Pembayaran Elektronis owned directly through PT Aplikanusa Lintasarta.

However, the decline in income caused the cost of expenses and financial costs of Rp. 2.12 trillion to not be covered. As a result of the loss, the equity of the company had to decline to Rp 12.13 trillion from the previous year of Rp 14.81 trillion.

On the other hand, ISAT's liabilities also increased to Rp. 41.0 trillion from Rp. 35.84 trillion in the previous year. Short-term liabilities of Rp 21.04 trillion contributed to the increase in majority liabilities.

Dealing with Funding

Dealing with funding, ISAT has also just issued bonds worth Rp 1.5 trillion and Sukuk ijarah of Rp 500 billion at the beginning of 2019.

Citing research by Krishna Sekuritas analyst Etta Rusdiana Putra on Wednesday (6/3), his party recommended holding ISAT shares. Besides, it also predicts ISAT's share target of Rp. 2,570 per share, down 19.2%. The current ISAT shares are still at Rp 3,160 per share.

According to him, 2018 was a year that was quite disappointing for ISAT. Even this has been following previous predictions, which were thought to be the ISAT acquisition, which could only touch Rp. 22.5 trillion.


Furthermore, according to him, ISAT losses were mainly contributed by financial burdens. This expense exceeds expectations of Rp 1.6 trillion. On the other hand, quarterly, ISAT's income still increased by 17.7%, and this is a good sign.

"Companies should be able to maintain this performance so that revenues can rise to Rp. Twenty-four trillion to Rp. 25 trillion," Etta wrote in his research. Even so, the net profit can only be achieved if the company can raise revenues to Rp. 26.5 trillion to Rp. 27 trillion assuming the same burden.

According to him, ISAT must accelerate the increase in 4G services that can drive revenue. ISAT performance is generally still relatively unattractive, but ISAT has an essential role in the issue of consolidation in the telecommunications industry that could have happened and changed this industry.

"We are pessimistic that consolidation will occur in 2019, waiting for the new frequency regulation, while the 5G frequency auction is estimated to only begin in 2022," Etta wrote.

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