ISAT core earnings to reach $130.3m in FY23: Nomura

It is expected to grow further to $169.5m in FY24.

Indonesian telecommunications firm Indosat (ISAT) is expected to see its core earnings projection to reach around $130.3m (IDR2t) for the financial year (FY) 2023 due to the projected revenue growth from data services.

In a report, Nomura said its core earnings projection for ISAT increased by 35% from its previous estimate on the back of the higher revenue expected from data services which are projected to grow by 8% to 12% for FY23 to FY24 due to volume increases of 24% to 27%.

It also raised its forecast for FY24 by 18% from the prior estimate to $169.5m (IDR2.6t).

Nomura added that these forecast increases resulted in a rise in earnings before interest, taxes, depreciation and amortisation (EBITDA) by 8% to 10% for FY23 to FY24, whilst the margin is seen to expand 43.4% for FY23, and 44.3% for FY24.

It is expected to deliver the most EBITDA growth, mainly from an expected increase in revenue market share and a projected margin uptrend.

“Further out, we see room for margin expansions for ISAT stemming from price increases, better spectrum utilization as well as the reaping of more benefits from greater network integration post-merger,” the report read, adding that its revenue market share is expected to grow as it has the second-most spectrum bandwidth which can be used to gain market share outside of Java.

Nomura added that the company plans to focus on core assets and divest passive tower infrastructure to translate into a healthier dividend.

$1=IDR15,343.25

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