A Weaker Top Line, A Stronger Bottom Line
Q1 2018's report ended on an open question: was the quarter's broken recovery - operating income down 21.2% quarter-on-quarter, both segments declining together for the first time tracked - the start of a new decline, or a one-quarter stumble? Q2 2018 answers with something neither reading anticipated. Standalone net revenue fell 4.2% year-on-year to Rp998.0 billion, the sixth consecutive quarter of YoY revenue decline - yet net income attributable to owners rose 21.1% YoY to Rp91.5 billion, and operating income grew 3.5% YoY to Rp111.8 billion. The business didn't get bigger. It got cheaper to run.
The mechanism is specific, not vague: standalone interest expense fell to Rp16.1 billion from Rp36.4 billion a year earlier - a 55.8% reduction - as the multi-year deleveraging campaign this site has tracked since Q1 2017 kept working even through Q1's cost-discipline wobble. Debt-to-equity, which Q1 2018's report flagged as having plateaued at 0.32x for the first time since the campaign began, resumed compressing to 0.31x this quarter. Headcount and operating expenses, which Q1 had reversed into growth for the first time in over a year, both moved back in the disciplined direction too (see Key Operational Metrics).
Quarter-on-quarter, the picture is gentler than Q1's collapse but still a step down: operating income fell 6.3% and net income fell 7.5% versus Q1 2018, even as revenue itself grew 2.5% sequentially - the first sequential revenue increase since Q3 2017. That combination - revenue up, profit down, sequentially - means margin compressed QoQ even as it expanded YoY, a genuinely mixed signal that the rest of this post tries to untangle rather than round off in either direction.
The Prescription
Blue Bird should keep leaning on the deleveraging campaign as its actual profit engine right now, because it is doing more real work than anything happening on the revenue line: a 55.8% YoY cut in interest expense turned a still-shrinking top line into double-digit net income growth, which no amount of fare-pricing or route optimization achieved over the same stretch. Management's own numbers make the case better than any narrative framing would - continuing to pay down debt is the single highest-conviction lever visible in this filing.
What it should stop doing: treating capex as a free variable while free cash flow absorbs the hit. Standalone capex more than doubled YoY (Rp166.2 billion versus Rp69.2 billion in Q2 2017), and free cash flow fell 47.1% YoY to Rp45.0 billion as a direct result - not because operations weakened (standalone operating cash flow actually grew 36.9% YoY) but because acquisitions of fixed assets outran it. A fleet-renewal cycle is a legitimate reason to spend, but two consecutive quarters of elevated capex (this one and Q1's) without the filing explaining what's being renewed or why the pace roughly doubled is a gap a reader shouldn't have to fill in themselves.
Key Financial Metrics
Q2 2018 vs. Q2 2017, standalone quarter (derived by subtracting the already-reported Q1 2018 and Q1 2017 figures from this filing's H1 cumulative totals)
FX: IDR 14,404 = USD 1 (June 30, 2018).
| Metric | Q2 2018 (IDR) | Q2 2018 (USD) | Q2 2017 (IDR) | YoY |
|---|---|---|---|---|
| Net Revenue | Rp998.0B | ~$69.3M | Rp1,042.1B | ⚠️ -4.2% |
| Adjusted EBITDA» (Operating Income + D&A) | Rp254.4B | ~$17.7M | Rp280.6B | ⚠️ -9.3% |
| Operating Income» | Rp111.8B | ~$7.8M | Rp108.0B | ✅ +3.5% |
| Net Income» (attributable to owners) | Rp91.5B | ~$6.4M | Rp75.6B | ✅ +21.1% |
| Free Cash Flow» (Op. CF minus capex) | Rp45.0B | ~$3.1M | Rp85.0B | ⚠️ -47.1% |
| Total Cash (period-end) | Rp511.8B | ~$35.5M | Rp592.0B | ⚠️ -13.5% |
| EPS (basic, quarter) | Rp38 | ~$0.003 | Rp30 | ✅ +26.7% |
Operating margin expanded YoY to 11.20% (Q2 2017: 10.37%) even as it compressed sequentially from Q1 2018's 12.25% - both true at once, because the YoY comparison benefits from a full year of continued interest-cost reduction while the QoQ comparison catches a revenue base that grew 2.5% without operating income following it. Net margin followed the same split: 9.17% this quarter versus 7.25% a year ago (up sharply), but down from Q1 2018's 10.16%.
The free cash flow story inverts the usual "weak FCF means weak operations" read. Standalone operating cash flow rose 36.9% YoY to Rp211.2 billion - a genuine improvement in cash generation - but capex (acquisitions of fixed assets) more than doubled YoY to Rp166.2 billion from Rp69.2 billion, continuing rather than reversing Q1 2018's capex step-up. Total cash fell to Rp511.8 billion from Q1 2018's Rp615.6 billion - a 16.8% quarter-on-quarter decline - driven mainly by an annual cash dividend of Rp121.6 billion (Rp121.0 billion to the parent's owners, Rp0.6 billion to non-controlling interests) that this filing's cash flow statement shows was paid entirely within Q2, alongside continued elevated capex.
| Balance sheet metric | Jun 2018 (IDR) | Jun 2018 (USD) | Mar 2018 (IDR) | Change |
|---|---|---|---|---|
| Total Assets | Rp6,558.9B | ~$455.4M | Rp6,637.9B | ⚠️ -1.2% |
| Total Liabilities | Rp1,564.6B | ~$108.6M | Rp1,607.4B | ✅ -2.7% |
| Total Equity | Rp4,994.3B | ~$346.7M | Rp5,030.4B | ⚠️ -0.7% |
| Debt-to-Equity Ratio» (total liabilities / total equity) | 0.31x | - | 0.32x | ✅ Improved |
DER resumed compressing this quarter after Q1 2018 flagged its first plateau since the deleveraging campaign began - one flat quarter, not a reversal. Equity fell slightly quarter-on-quarter despite the quarter being profitable, because the dividend payment described above (Rp121.6 billion) exceeded standalone Q2 net income (Rp92.2 billion including non-controlling interests).
Segment Performance
Blue Bird still reports the same two operating segments - Taxi and Non-Taxi - unchanged since Q1 2016's two-segment collapse.
Taxi
Q2 2018 net revenue Rp814.9B (-5.8% YoY, +3.2% QoQ), operating income Rp71.8B (+3.6% YoY, +3.7% QoQ), operating margin 8.81% - up from Q2 2017's 8.01% and roughly flat with Q1 2018's 8.76%. This is the segment's steadiest quarter in over a year: margin stopped falling on every basis at once, reversing Q1 2018's "weakest quarterly Taxi margin this site has recorded" framing even though revenue is still shrinking YoY.
Non-Taxi
Q2 2018 net revenue Rp183.2B (+3.1% YoY, -0.2% QoQ), operating income Rp40.0B (+3.2% YoY, -20.1% QoQ), operating margin 21.86% - essentially flat YoY (Q2 2017: 21.84%) but down sharply from Q1 2018's 27.28%, the second-best quarterly margin of the past year at the time. Revenue barely moved QoQ, so the margin drop is a cost-side story within the segment, not a demand one - this filing's segment note doesn't break out what changed. Nothing in either filing attributes the swing to Go-Jek/Go-Car; the MoU footnote still carries no volume metric to check against (see Beyond the Usual).
Segment Comparison
| Segment | Revenue (Q2 2018) | YoY Growth | QoQ Growth | Operating Margin |
|---|---|---|---|---|
| Taxi | Rp814.9B (81.6%) | ⚠️ -5.8% | ✅ +3.2% | ✅ 8.81% |
| Non-Taxi | Rp183.2B (18.4%) | ✅ +3.1% | ⚠️ -0.2% | ⚠️ 21.86% |
This is the mirror image of Q1 2018's "both segments decline together" pattern: this quarter both segments' operating income grew YoY together for the first time since that alternating-weakness pattern started breaking down, even as their QoQ paths diverged - Taxi improving, Non-Taxi cooling off from an unusually strong Q1. Revenue mix held nearly steady (Taxi 81.6% versus Q1 2018's 81.1%).
Key Operational Metrics
- Permanent employees (Group): 3,553 (Jun 2018), down 2.1% from 3,630 (Mar 2018) but still up 2.9% from 3,452 (Dec 2017) - Q1 2018's headcount reversal didn't continue into a second quarter of growth, though headcount hasn't fully round-tripped back to where it started the year either.
- Standalone operating expenses fell 6.0% YoY (Rp147.2B versus Rp156.5B in Q2 2017) - a reversal of Q1 2018's 4.3% YoY opex increase, which this filing's own numbers show was the one-quarter blip, not the new trend.
- Weighted average shares outstanding: 2,502,100,000, unchanged since the IPO - no further dilution.
- Geographic split: Jadetabek (Jakarta, Depok, Tangerang, Bekasi) revenue was Rp828.2B (83.0% of net revenue), down 7.6% YoY; revenue from outside Jadetabek was Rp169.8B (17.0%), up 16.1% YoY. Q1 2018's inversion of the usual pattern - Jadetabek barely moving while everywhere else fell sharply - flipped straight back this quarter to the historical shape this site has tracked since Q1 2016: the metro core eroding while the rest of the network partly offsets it (see Beyond the Usual).
- Still not available: any Go-Jek/Go-Car integration volume or revenue metric (see the opening section above). No presentation deck or transcript exists for this filing to fill the gap.
Beyond the Usual
Three separate, years-long lawsuits against the company or its related parties were resolved this period - all in Blue Bird's favor
The Indonesian Supreme Court dismissed a cassation appeal in a trademark/corporate-governance dispute dating to 2014 (formal notification received April 3, 2018), ordering the plaintiffs to pay court costs. The Jakarta High Court sustained a related 2014 civil suit's dismissal in a second case from the same litigant group (notification received May 7, 2018). And in a land-ownership dispute in Medan running since 2015, the Supreme Court dismissed the plaintiff's cassation appeal as well (notification received June 6, 2018, though the written decision itself hadn't been received by the report's issuance date). A real cluster of good news buried in a footnote most readers would skip - none of these three is the Nissan case, which remains genuinely open: the company filed its counter-memorandum of cassation on May 3, 2018, and there's no Supreme Court decision yet as of this report's issuance.
The MUFG credit facility's own footnote acknowledges the expiry Q1's filing didn't mention - but still hasn't confirmed a renewal
Q1 2018's report flagged that the MUFG short-term facility's own footnote showed an availability window ending March 23, 2018, with no mention of renewal in that filing. This filing's footnote now explicitly states the facility "is currently in progress of extension" - an acknowledgment the prior filing didn't make. That's still not a confirmed renewal: as of this report's issuance, no withdrawal has been made on the Rp300 billion facility either way, so its practical availability remains unresolved for a second straight quarter.
The Golden Bird/Traveloka airport-transportation tie-up has a hard expiry date
The agreement covering PPT's airport-transportation operations under the Golden Bird service name with Traveloka is disclosed as valid only until November 30, 2018 - a defined end date to watch in the next couple of filings, unlike the open-ended arrangements typical of Blue Bird's other partnership footnotes (including the still-undated Go-Jek/Go-Car MoU, see Key Operational Metrics).
The land-purchase commitment stays frozen for a third straight quarter
The Rp950.4 billion land-purchase commitment first tracked in FY2017's report shows no further movement: 125,427 square meters realized as of both June 30, 2018 and December 31, 2017, identical to the figure Q1 2018's filing also reported unchanged.
Stock Price: The Decline Leveled Off
Blue Bird's shares closed at Rp2,830 on June 29, 2018 - down 1.7% from March's Rp2,880, a far smaller move than Q1 2018's 16.8% drop or Q4 2017's 29.1% collapse. Against the Rp6,500 IPO price (November 2014), the stock is down 56.5%, essentially flat with Q1's 55.7% discount. Over the trailing two years (June 2016 to June 2018), the stock fell 30.3%, from Rp4,060 to Rp2,830 - though the two-year window obscures a much sharper round trip within it: the stock rallied to Rp4,880 by September 2017 on the Go-Jek/Go-Car tie-up before giving back 42.0% of that peak by this quarter.
Three consecutive down quarters for the stock, but this one barely moved - the sharpest deceleration in the stock's own volatility this site has tracked, arriving in the same quarter operating income and net income both grew YoY for the first time since the recovery streak broke. Whether the market has already priced in the YoY improvement, or simply ran out of reasons to keep selling after two brutal quarters, isn't something a single quarter's price action can answer on its own.
Target Valuation Range
Enterprise value ~Rp8,134B (~$565M), implying ~18.6x annualized P/E and ~1.44x P/B - fairly valued, arguably still slightly cheap. The stock's near-flat quarter left multiples roughly where Q1 2018 left them, against a business whose YoY profitability just improved for the first time in over a year even as the quarter-on-quarter trend stayed soft.
Against Q2 2018 numbers (2,502,100,000 shares outstanding, unchanged), using annualized quarterly figures (Q2 2018 × 4) for comparability with prior non-Q4 quarters on this site:
| Market cap → enterprise value | Q2 2018 |
|---|---|
| Share price (period-end) | Rp2,830 |
| Shares outstanding | 2,502,100,000 |
| Market capitalization | ~Rp7,081.0B (~$491.6M) |
| Total liabilities | ~Rp1,564.6B |
| Less: cash and equivalents | ~Rp511.8B |
| Enterprise value | ~Rp8,134B (~$565M) |
Market cap is down 1.7% from ~Rp7,206.0B at Q1 2018's close.
| Peer-multiple sanity check | Q1 2018 (annualized) | Q2 2018 (annualized) |
|---|---|---|
| P/E | ~18.9x | ~18.6x (Q2 2018 EPS Rp38 × 4 = Rp152) |
| P/B | ~1.45x | ~1.44x (book value/share ~Rp1,966) |
| Annualized ROE | ~8.1% | ~7.4% |
| Annualized ROA | ~6.0% | ~5.5% |
The multiples are telling a quieter story than the income statement: P/E and P/B both sat essentially flat with Q1 2018's already-record-low levels, but the annualized-return metrics (ROE, ROA) softened, because they're built off the QoQ-weaker Q2 standalone quarter rather than the YoY-stronger comparison this post opened with. A reader relying only on the valuation multiples would see "cheap and getting slightly cheaper"; a reader relying only on the YoY income-statement comparison would see "meaningfully improving." Both are accurate reads of the same quarter - which is exactly why this filing doesn't resolve into a single clean verdict the way Q1's did.
PT Blue Bird Tbk's consolidated financial statements as of June 30, 2018 and for the six-month period then ended.