Indosat, Indonesia’s second-ranked cellco, has reported an 89% slump in quarterly profit thanks to ballooning depreciation charges.
These are the first results from the company’s new executive management team, led by Qatar Telecom – owner of 65% of Indosat – which moved into the driving seat on September 1.
The new management took a strict line on depreciation, with charges rising 34% to 1.8 trillion rupiah ($197.4 million), forcing profits down 89% to just 48 billion rupiah.
Strong top line growth however began to work in Indosat’s favour with ebitda recovering sharply from Q3.
Ebitda rose 20% quarter on quarter to 2.4 trillion rupiah, with revenues growing 11% to almost 5 trillion.
Cellular revenues grew 12.2% to IDR3.9 trillion in Q4 after Q3’s 5.6% revenue growth.
The impressive-looking 4Q09 cellular growth, driven by a 7.4% quarter on quarter increase in the average subscriber base together with a 4.5% increase in ARPU, outpaced rival Telkomsel’s 5% quarterly growth and XL Axiata’s 10.2% growth.
Among the other business lines, IDD revenue declined by 6.5% but the MIDI corporate data business delivered 16.2% revenue growth.
“Looking across FY09 as a whole, the damage done by the transition in management in 1H09 was still evident, with cellular revenue having declined by 1.8% year on year and total revenue declining by 1.4%,” comments Credit Suisse.
“However, this was already factored into our forecasts, and the strength of the 3Q09 and 4Q09 recovery resulted in Indosat exceeding our cellular revenue and total revenue forecasts by 0.7% and 0.3%respectively.”