MTEL – 1H23 net profit relatively in line

Dayamitra Telekomunikasi (MTEL) reported a modest growth in net profit by +4.0% qoq/14.7% yoy to IDR521 bn/ IDR1.02 tn in 2Q23/1H23. Meanwhile, MTEL's revenue was soft +0.9% qoq in 2Q23, bringing 1H23 revenue to IDR4.13 tn. Furthermore, EBITDA managed to increase c.16% yoy/qoq to IDR3.35 tn in 1H23, despite higher cost of revenue +13.6% qoq on the back of its expansion strategy. As a result, EBITDA margin rose +370bps yoy to 81.3%. Furthermore, MTEL’s tenancy ratio increased qoq from 1.46x to 1.49x thanks to faster tenancies growth +2.6% qoq, in line with inorganic expansion. (Source : Company) Comment : While we are still waiting for management's remarks, it is worth noting that MTEL's 1H23 bottom line was relatively in-line with ours at 49.9%, yet slightly below consensus' forecast at 47.8%. Meanwhile, MTEL's 2Q23 revenue was relatively soft or reaching 48.0%/47.7% of ours/consensus, that might have indicated lease rate pressure. On the other side, MTEL's managed to add 1,401 tenants qoq, which to our estimate, is higher than peers, stemming from inorganic expansions especially in ex-Java areas.