ISAT - Solid 1H23 results, in-line

ISAT's 2Q23 EBITDA grew 14.0% qoq, bringing 1H23 EBITDA to IDR24.7 tn (+24% yoy) or ahead of ours/consensus at 51.5%/51.0%. This also brought an improvement to EBITDA margin from 41.2% in 2Q22 to 47.7 in 2Q23 thanks to better cash costs -2.9% yoy. Excluding one-off gains, ISAT's normalized net profit jumped over 200% qoq in 2Q23 to IDR986 bn. Meanwhile, ISAT's 2Q23 revenue also increased 6.6% qoq to IDR12.7 tn, mainly supported by strong data revenue +7.3% qoq/11.9% yoy, in-line with a growing ARPU +8.5% qoq stemming from ISAT's efforts to rationalize prices especially espeically during Ied festivities. ISAT also managed to add 1.5mn of subs qoq in 2Q23. During the call, management retains revenue guidance with in-line or better than industry growth. Comment : A strong set of results signify ISAT's capability to leverage from synergy, allowing it to increase capacity and achieve service improvement. With the whole industry is moving towards healthier competition, management expects to continue to rationalize price with ARPU targeted to reach 40K in 4Q24. In response to FMC competition, ISAT is to further enforce fixed broadband product, Indosat Hifi to achieve c.10% of market share.