Base Transciever Station (BTS) Tower.

JAKARTA (TheInsiderStories) – Indonesian telecommunications infrastructure provider, PT  Tower  Bersama Infrastructure Tbk (IDX: TBIG)  planned to issue global bonds up to US$850 million (Rp12.24 trillion) to refinance a number of the company’ debts, said an official statement on Tuesday (05/21).

Corporate Secretary Helmy Yusman Santoso said in a written statement, that the bond issuance was a material transaction based on the Financial Services Authority Regulation No. IX.E.2, Appendix of Decision of Chairman of Bapepam-LK No. KEP-614/BL/2011 November 28, 2011, concerning Material Transactions and Changes in Main Business Activities.

In 2018, the company with a majority shares owned by Saratoga Group and Provident Capital was recorded a total revenues of Rp4.6 trillion and EBITDA of Rp3.96 trillion with EBITDA margin increasing to 86.1 percent.

However, the financial performance actually showed a weakening because the company’s net profit was only recorded at Rp680.58 billion, down 70.62 percent compared to 2017 profit of Rp2.31 trillion.

The trigger for the decline was due to the operating expenses rose 17.42 percent to Rp784.08 billion, from the previous Rp667.76 billion and the company’s interest expense also rose to Rp2 trillion from Rp1.8 trillion in 2017.

While the total value of the assets of the company rose 13.74 percent to Rp29.11 trillion from Rp25.59 billion in 2017. The increase in asset value was caused by the addition of 3,732 gross rentals consisting of 2,005 telecommunication sites and 1,727 collocations.

With that, TBIG has 25,518 leases and 15,091 telecommunication sites consisting of 15,032 telecommunication towers and 59 watershed networks with a total of 25,459 leases on telecommunications towers, so that the company’s tenancy ratio is 1.69.

In addition to strong organic growth, TBIG also took over two tower companies listed on the Indonesia Stock Exchange in the fourth quarter of 2018, PT Gihon Telekomunikasi Indonesia Tbk (IDX: GHON) and PT Visi Telekomunikasi Infrastruktur Tbk (IDX: GOLD). Both of these acquisitions added 1,120 leases and 859 telecommunication sites to the company’s portfolio.

However, the company is burdened by large loans in 2018, where loans in the US Dollar exchange rate that have been hedged are measured using a hedging rate of Rp20,452 billion and total gross senior debt of Rp13,263 billion.

With a cash balance of Rp221 billion, the total net debt became Rp20,231 billion and the total net senior debt loan was Rp13,042 billion.

With this bond issuance, companies can get financial resources to improve its performance in 2019, the company said.

Santoso expalined, even though the company’s net profit had fallen sharply, the company management had agreed through the Annual General Meeting of Shareholders to distribute a cash dividend of Rp600 billion and would allocate a general reserve of Rp500 million, while the remaining value was allocated for retained earnings.

This cash dividend, he said, will be distributed on June 21, 2019 to all shareholders listed on the Register of Shareholders on June 10, 2019 and the date of cum dividend (end of the stock trading period with rights to dividends) on May 29, 2019.

US$1 = Rp14,400

Written by Daniel Deha, Email: daniel@theinsiderstories.com