TBIG posted a resilient 1Q25 performance despite relatively flat revenue. TBIG booked revenue of IDR 1.73 trillion (-0.5% QoQ, +1.6% YoY), broadly in line with our estimate, the consensus, and the 5-year historical average (Phintas: 25.35%; Consensus: 24.6%; 5-year avg: 24.2%). The tower segment remained the main contributor (>91% of total revenue) but experienced a slight contraction of -0.9% QoQ to IDR 1.58 trillion. Conversely, the fiber segment delivered solid growth (+3.7% QoQ; +10.3% YoY) to IDR 151 billion, reflecting sustained demand for fiber amid weak tower leasing momentum.

While top-line growth was limited, cost efficiency helped operational performance exceed expectations. EBITDA edged up to IDR 1.11 trillion (+1.1% QoQ, +1.2% YoY), beating our forecast (Phintas: 26.77%) and broadly in line with consensus and the 5-year average (Consensus: 25.1%; 5-year avg: 24.2%). The improvement was primarily driven by a combination of a -4.1% QoQ decrease in cost of revenue and a substantial -13.9% QoQ decline in operating expenses, resulting in EBITDA margin expansion to 85.6% in 1Q25 (vs 84.2% in 4Q24).

Cost and tax efficiency further supported bottom-line growth. TBIG booked net profit of IDR 413 billion (+112.8% QoQ; +98.5% YoY), in line with our estimate, consensus, and the 5-year average (Phintas: 25.05%; Consensus: 26.3%; 5-year avg: 20.7%). The improvement was driven by a -5.1% QoQ reduction in interest expenses and a significant -24.9% QoQ drop in tax expenses, which also boosted net profit margin to 23.9% (vs 12.2% in 4Q24). The balance sheet also strengthened, with DER falling to 2.96x in 1Q25 (vs 3.23x in 4Q24).

We maintain our HOLD recommendation on TBIG, consistent with our previous report. Despite notable improvements in operational and bottom-line metrics in 1Q25, the near-term outlook for the tower business remains clouded by demand-side uncertainty. One of the key risks lies in the ongoing consolidation process between EXCL and FREN, which together contribute approximately 31.92% of TBIG’s total revenue. Downside Risks: (1) High interest rates potentially pressuring profitability margins; (2) A meaningful number of decommissioned sites due to EXCL-FREN consolidation.

By PHINTRACO SEKURITAS | Research
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