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Publicly listed cellular giant PT XL Axiata (EXCL) is planning to use part of the proceeds of its Rp 5.6 trillion (US$441.1 million) tower sale to repay debts in the first quarter of this year.
XL’s head of investor relations, Feiruz Ikhwan, told reporters on Wednesday that XL would use part of the proceeds raised from selling 3,500 towers to PT Solusi Tunas Pratama (SUPR), to pay its Rp 400 billion debt, maturing in the first quarter this year.
“[In total], we will use more than half of the proceeds to pay our debts,” he said, adding that his firm had almost Rp 4 trillion in debts maturing this year.
According to Feiruz, total debts had hit Rp 30.4 trillion as of September last year with the net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio hitting 3.2.
“We want to improve our net debt to EBITDA ratio to 2.5,” he said, adding that the realization would be very dependent on the firm’s performance.
In the fourth quarter last year, XL had already paid Rp 1 trillion of its total debt, he said.
XL, which acquired PT Axis Telekom last year, suffered Rp 901.2 billion in net losses in the January-September period last year, although the firm’s revenues surged by 10.8 percent to Rp 17.5 trillion.
As with most mobile operators in the country, currency volatility and a data price war were two of the factors that caused XL’s surging revenues to be unable to compensate for its ballooning costs.
Dian Siswarini, the newly installed XL deputy CEO, said that one way to improve her firm’s performance was not by raising data fees, but by reducing costs as much as possible.
“We can do a number of things to become more efficient, for example, sharing infrastructure and increasing data traffic,” she said. Around 51 percent of XL’s 62.9 million subscribers were data users.
Dian, who has worked with XL since 1996, said her firm would also boost its digital services by developing its e-commerce, digital payment and internet of things (IoT) businesses.
XL’s e-commerce platform, known as Elevenia, had successfully attained 750,000 members as of December last year.
The online shopping site, which was launched in March last year, records around 30,000 new members each week.
XL expects to increase transaction volume in Elevenia by 400 percent this year and to raise its revenue by five-fold compared to last year.
Elevenia, which is operated under PT XL Planet, had pocketed Rp 2.6 billion in revenues as of September last year, according to XL’s financial report.
In another development, to improve XL’s performance, Feiruz said that the firm had also successfully slashed total costs for Axis by up to 70 percent compared to numbers prior to being acquired by XL. XL acquired Axis early last year in a $865 million deal.
Shares in XL traded at Rp 4,700 each on Wednesday’s close, down 0.74 percent from the previous day. The stocks have lost almost 7.5 percent in the past year, under performing the broader Jakarta Composite Index’s (JCI) 25 percent gain over the same period.
