TOWR booked continuous positive performance in Q3/2020. The company’s income came from an increase in tower tenancy income by 23.5% YoY with PT Hutchison 3 Indonesia (TRI) still the biggest contributor. Meanwhile, tax expenses fell 36.5% YoY, boosting bottom line performance 19.5% YoY to IDR1.9 trillion.
The company’s performance grew, driven by an increase in tower leases by TRI and FREN, which recorded growth of 57.0% YoY and 41.5% YoY. The solid growth in tower rental is due to the telecommunications operator sector, which currently benefits from government policy to subsidize internet quota. This pushed the company’s bottom line to grow by 3.1% YoY.
PSBB impacts the poultry sector, with the decrease of demand for chicken meat and egg resulting in the company’s sales to drop. In 2Q20, after PSBB was implemented, the company’s sales declined (-9.3% YoY, -1.3% QoQ) to IDR13.7 trillion. This would then resulted in the company’s net profit falling to IDR730.7 billion (-20.2% YoY, -20.8% QoQ). We believe that if PSBB continues to be tightened, it will impact sales from the livestock and broiler feed until the end of 2020.
EXCL booked growth in data segment by 16.5% YoY. The segment manages to jump significantly due to PSBB that forces people to do more activities from home, such as: school from home or work from home. Besides, we see that the data segment will still potentially grow until the end of 2020, as demand and need for data traffic continues to rise. The company has also increased cooperation with OTT service providers to increase the network of XL Home users.
The PSBB period was a positive wind for the tower industry. It can be seen that TOWR’s growing revenue was driven by the increase tower rental segment. This happened because the data traffic demand from telecommunication operators were very high during the PSBB. TOWR recorded tower rental revenue during 2Q20 of IDR 1.6 trillion (+ 8.2% QoQ).
The decline in the company’s 1H20 performance, in-line with our estimates, resulted from the impact of PSBB implementation during the second quarter. Revenue from the construction segment fell 72.0% YoY while the toll road segment revenue decreased 17.5% YoY. The company has also made several efficiencies during the PSBB, but this has not been able to boost the company’s performance during the first semester of 2020. During the second quarter of 2020, the company recorded a net loss of IDR482.2 billion.
On YoY basis in 1H20, income of the Internet Data and Indihome segments booked positive growth of 6.8% and 19.1% respectively during the Covid-19 pandemic period. However, the cannibalization by OTT and tight competition with mobile operators made the company’s income from the SMS, Cellular Phone segment down by 27.5%. This caused the net profit of the company to be pressured in the first quarter of 2020.
Along with the high contribution of tower leases from Telkomsel and Indosat of 39.8% and 21.4%, TBIG was able to record revenue growth of IDR2.6 trillion in 1H20, up 13.2% YoY. The OPEX, which was successfully maintained, was able to make the company’s net profit soar to IDR510 billion, up by 33.6% YoY.
JSMR recorded income decline of 45.3% YoY pressured by fall in construction revenue in 1Q20 as much as 71.8% YoY. However, the company’s bottom line is still stable as reflected in the cost of revenue that was successfully down by 57.1% in the first quarter of 2020. Moreover, the company is currently issuing continuous bonds with a total of IDR3 trillion to strengthen liquidity amid the pandemic.
