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Strength
In 3Q24, IBST (TOWR’s recently acquired subsidiary) booked revenue of IDR 210.5bn, boosting TOWR’s top-line to IDR 3.3tn (+6.0% QoQ, +12.0% YoY); consolidation of IBST’s results is expected to push TOWR’s FY24 growth to low double-digits; the addition of 23,339 km of fiber optic lines in 3Q24 bolstered the growth of TOWR’s Fiber-to-the-Tower (+3.9% QoQ; +17.5% YoY), now TOWR’s 2nd biggest revenue contributor (16.3%).
Weakness
-12.1% YoY decline in 3Q24 net profit, mainly due to increased interest charges from additional loans taken to finance acquisition activities, resulting in higher DER of 2.8x (vs. 2.7x in 3Q23); consolidated gross margin dropped to 68.6% in 3Q24, partly due to IBST’s weaker gross margin (63.6%) due high FA depreciation.
Opportunity
Upcoming rights issue (IDR 4.5tn) may help reduce TOWR’s DER to 2.3x (9M24: 2.8x); BI rate cut(s) is expected to decrease TOWR’s interest charges; further acquisitions of tower and fiber optic assets should help bolster future revenue growth.
Threat
Slower-than-expected MNO network expansion may hinder TOWR’s growth; EXCL-FREN merger may lead to relocation of tower lease contracts, putting pressure on players’ performances within the sector.
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