XL Revenue Rose 10% in 2014

Dian Siswarini (dok)

JAKARTA (IndoTelko)  – PT XL AxiataTbk (XL)  announced its audited results for the full financial year ended 31 December 2014.

XL posted an increase in gross revenue of 10%YoY to Rp23.6 trillion primarily driven by a surge in Data and VAS revenue of 42% and 50%YoY respectively. Data revenue contributed 29% to XL’s total usage revenue compared to 23% in the preceding year. In addition, XL achieved a 3% growth YoY in Voice and SMS revenues respectively.

Deputy CEO of XL, Dian Siswarini explained that the healthy growth in Data revenue was fuelled by higher Data traffic and an increase in smartphone penetration.

Dian said, “Our focus in making mobile internet services more assessable and convenient resulted in an increase of Data traffic of 127%YoY as we continuously offer customers a wide variety of affordable devices and service bundles. Smartphone adopters increased to 16.1 million or 27% penetration rate in FY14.”

An extension to the success seen in XL’s Internet Unlimited package, a new starter pack Internet Super Unlimited was introduced to target new Data entry users with a simple data package within fair usage limits before managing these users upwards towards bigger volume packages tailored to their specific needs.

Throughout 2014, XL continued to collaborate and offer handset bundling packages with smartphone manufacturers such as Apple, ASUS, Samsung, Blackberry, LG, Sony and Nokia. These bundling packages; coupled with XL’s network coverage and quality, offers a compelling value proposition to XL’s subscribers to experience an affordable and enhance internet experience.

As part of XL’s mandate to ensure exceptional data experience and coverage to its customers, XL deployed over 7,000 new sites in 2014 or a 16% increase YoY.

Over 16,000 Node Bs were strategically positioned to cater consumer’s demand for Data. At the same time, XL continues to modernize its network in key cities and this is expected to deliver greater stability, expand network capacity and improve quality for both voice and data services to our consumers.

Dian explained, “A testament to our commitment, XL has added 4G services in four major cities which are Jakarta, Yogyakarta, Bogor and Medan as part of its overall suite of internet service offerings to meet consumer’s demand for high speed internet connection. XL is taking proactive strategies by introducing new bundledplans with 4G enabled devices and free digital content to take the forefront data position and capture the growth from internet.”  

The acquisition of Axis is a strategic one to enhance XL’s competitiveness in the mobile industry of Indonesia.
Following the completion of the transaction in March, XL had set out a clear timeline of 12 months for integration.

The Axis integration was successfully completed well ahead of schedule with minimum disruption to our customers. In the recent months, XL had delivered cost reduction and will continue to focus on improving its cost structure through various initiatives including redeployment of Axis’s assets to optimize network coverage and capacity.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was stable atRp8.6 trillion with EBITDA margin at37%.
Lower margin was due to the integration with Axis after taking into account the negative EBITDA since its acquisition on 19 March 2014. However, XL’s focus on improving cost savings and business performances resulted in significant improvements to EBITDA margin in the fourth quarter FY14.

Loss for the financial year 2014 amounted to Rp891 billion as a result of the Axis acquisition and weaken Rupiah. Excluding the impact from unrealised forex transactions, XL would have recorded a net loss of Rp57 billion.
XL continues to expand its business beyond traditional telecommunication services to provide rich digital content and applications.

In 2014, Digital Service’s revenue contribution to XL increased 52% YoY through the eight lines of Digital service which are Digital Entertainment, Mobile Advertising, Mobile Payment, Mobile Banking, Machine to Machine, Cloud, Business Development and Elevenia which experienced an increase in all areas including active subscribers, corporate clients’ partnerships, applications, transactions and products.

On 23 December 2014, XL completed the 3,500 tower sale to PT Solusi Tunas Pratama Tbk. (“STP”) and will lease back these towers from STP under favorable conditions for a period of 10 years, in line with XL’s ambition to focus on its core business. The proceeds received of Rp5.6 trillion will be used to pare down debt and improve its capital position.

During the year, XL had a paid capex of Rp7 trillion on efforts to expand its Data infrastructure and mobile services which was funded via a combination of internally generated funds and debt.

Total debt increased to Rp29.6 trillion from Rp17.8 trillion primarily due to the Axis acquisition which led to an increase in Net Debt/EBITDA from 1.9x to 2.6x as the end of FY14.

On the recent management reorganization, Dian Siswarini, the newly appointed XL’s Deputy CEO, brings with her a wealth of experience in the mobile industry having been with XL for last 19 years.

She has been a Director of Network Services / Chief Technology Officer at XL since 2007 alongside WillemLucas Timmermans and Hasnul Suhaimi.

Prior to her appointment, she served as the Director of Digital Services at XL and recently as the Axiata Group Chief Marketing and Operating Officer overseeing Strategic Marketing & Operations of the vast portfolio of the Axiata Group of Companies in the region.

Also, Willem Lucas Timmermans, one of XL’s anchors takes on a new strategic role as the new Chief Strategic Transformation Officer.

A familiar face to the investment community, Wim’s role is vital to the transformation of XL into the digital era. With over 25 years of experience in the telecommunications industry in a myriad of strategic roles, Wim is best fit to help take
XL forward by building solid foundations to the future and delivering long term shareholders’ value. This includes strategic focus on the data transformation, carrier collaboration, business digitization and digital services.

The transformation of XL into a leading mobile internet provider in Indonesia amidst the changing business landscape is further strengthened with the reorganization in the management team. Long term sustainability and stability of management is viewed as a critical element in the ability to execute in a dynamic market and as such a clear succession planning roadmap is developed for critical roles long before any transition is needed.(es)