Jan 31, 2011

XL Axiata FY10 operating profit up 109%

Indonesia's third biggest cellular operator PT XL Axiata Tbk (EXCL), controlled by Malaysian Axiata, today reported a 109.76% jump in operating profit last year as revenue rose 27.35%.
In 2010's financial statement submitted to Indonesia Stock Exchange (IDX) today, XL Axiata posted Rp5.16 trillion operating profit last year from Rp2.46 trillion.
In return, the operator's operating margin surged to 29.55% in 2010 from 17.94% in 2009.
XL Axiata's operating expense increased 9.34% to Rp12.29 trillion in 2010 from Rp11.24 trillion in 2009. Revenue grew 27.35% to Rp17.46 trillion in 2010 from Rp13.71 trillion in 2009.
The operator posted a 69% increase in net profit to Rp2.89 trillion or Rp340 per share last year from Rp1.71 trillion or Rp237 per share in 2009.
Mandiri Sekuritas, in a morning notes today, said XL Axiata FY10 result, with revenue up to Rp17.5 trillion, is in line with its estimate. Meanwhile, bottom line was stronger than expected with net income surged to Rp2.9 trillion.
"This is above our estimate due to better than expected cost efficiency."
All segments showed robust growth with voice, SMS, and data grew by 20%, 29%, and 85% year on year (yoy), respectively.
Subscribers base continued to grow to 40.4 million (+28% yoy), while ARPU declined slightly to Rp34,000 (-6% yoy) due to intensive ‘Rp 0’ tariff promo in late 2010 and also striking international roaming tariff cut.
"We like XL Axiata and still believe they will continue to outperform this year although not as better as 2010 as Indonesian cellular market experiences stagnancy. For FY11F, EXCL expected 11-12% subscriber growth."
At Rp5,200, EXCL is currently traded at PER 11F 11.7x, PBV 11F 3.0x. "We still maintain our buy recommendation on EXCL at target price of Rp7,300."
Disclosure: No position at the stock mentioned above.

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