TBIG - In-line 1Q23 revenue, outperforms in additions

Tower Bersama Infrastructure (TBIG's net profit dropped 16.3% qoq/16.4% yoy in 1Q23 to IDR347 bn, accounting for 20.0% of ours/consensus. Lower net profit in 1Q23 was mostly driven by non-cash items D&A that surged 26.9% qoq, yet cash cost was mostly manageable +0.28% qoq. As a result, TBIG's EBITDA grew 1.1% qoq in 1Q23 to IDR1.40 tn with margin at 86.1% or flattish qoq. Despite high interest rate environment, TBIG managed to keep finance costs in check -2.7% qoq. Meanwhile, revenue inched up 1.0% qoq/-1.4% yoy in 1Q23 to IDR1.62 tn, as it saw an uptick of 0.6% qoq in tenancies despite consolidation. (Source : Company) Comment : Although a drop in net profit, TBIG's top-line is relatively in-line with ours/consensus. It is worth highlighting that TBIG managed to keep its tenancy ratio at 1.87x on top of +127 qoq net additions albeit lower qoq amid consolidation of IOH, which is better than competitor. Meanwhile, manageable finance costs was owed to debt reduction amid an increase of cost of finance to 6.4%, in our view.