MTEL recorded revenue of IDR 2.49 trillion in 4Q24 (+5.14% QoQ; +7.25% YoY), bringing total FY24 revenue to IDR 9.31 trillion (+8.30% YoY). This result exceeded our estimates (Phintas: 103%) but was slightly below market consensus (Cons: 96%). Growth was primarily driven by a strong rebound in the fiber segment, which surged 40.40% YoY (+114.14% QoQ), reaching IDR 212 billion in 4Q24. Meanwhile, the tower leasing segment saw more modest growth, with revenue reaching IDR 1.96 trillion (+0.05% QoQ; +2.45% YoY).

EBITDA for 4Q24 came in at IDR 2.03 trillion (+3.03% QoQ; +8.65% YoY), boosting total FY24 EBITDA to IDR 7.70 trillion (+11.18% YoY). The EBITDA margin expanded to 82.68% from 80.53% in FY23, reflecting solid operational efficiency. Net Profit for FY24 was IDR 2.11 trillion (+0.38% YoY), in line with our forecast (Phintas: 99%), although slightly below market consensus (Cons: 88%).

MTEL continues to show operational resilience despite industry consolidation. The company recorded a solid +4.28% YoY growth in tenants, reaching 59.87 thousand tenants (vs. 57.41 thousand in FY23). Fiber network expansion saw significant growth, rising +56.94% YoY to 51.04 thousand km. The tenancy ratio stood at 1.52x (vs. 1.51x in FY23). MTEL operates 39 thousand towers, with 16 thousand towers in Java (41% of the portfolio) and a tenancy ratio of 1.64x. The rest of the towers are located outside Java (59% of the portfolio), with a lower tenancy ratio of 1.44x.

While the tower industry is facing challenges due to consolidation, particularly with the EXCL-FREN merger, the impact on MTEL’s performance is expected to be limited, as EXCL’s contribution to MTEL’s revenue is relatively small (FY24: 12.16% vs. 4-year average of 10.58%). For FY25E, we forecast MTEL to achieve a revenue of IDR 9.58 trillion, driven by a strong tower leasing segment (IDR 7.84 trillion). This growth will be supported by a recovery in demand for collocation services and build-to-suit (B2S) offerings, particularly from tenants like IOH. MTEL has allocated a capex budget of IDR 5.4 trillion for FY25E, targeting an additional 2.5 thousand new tenants (net after EXCL-FREN consolidation).

MTEL has set a target of expanding 10 thousand km of fiber through both organic and inorganic strategies. We estimate fiber business revenue to grow +3.65% YoY to IDR 579 billion in FY25E. EBITDA is expected to reach IDR 7.88 trillion in FY25E, with margins remaining strong at around 82.31% to 82.51% for FY25-F27F. Despite the moderate growth outlook and elevated interest expenses, we expect net profit to grow by +3.90% YoY to IDR 3.90 trillion in FY25E.

We maintain our BUY rating for MTEL with a revised target price of IDR 700 (previous: IDR 720), reflecting an EV/EBITDA of 9.7x for FY25F. Despite headwinds from industry consolidation, MTEL’s long-term prospects remain positive, underpinned by a solid capital structure, low leverage, and growth potential from the fiber business. Downside Risks: 1)Weakening tenant demand, particularly for new build-to-suit (B2S) projects and collocation. 2) Pressure from high interest rates, which could affect profitability.

By PHINTRACO SEKURITAS | Research
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