A Headline Decline That's Really a Comparison-Base Problem
H1 2023's headline number looks like a reversal: revenue grew a healthy 9.5% YoY to Rp24,674.8 billion, and the company's own disclosed EBITDA grew even faster at 24.0% to Rp11,383 billion, but reported net income attributable to owners fell 41.5% to Rp1,908.4 billion from H1 2022's Rp3,260.3 billion. The explanation is entirely a comparison-base problem this site flagged as a real risk back in H1 2022's own coverage: that prior-year quarter included a Rp3,580.3 billion "gain associated with the loss of control of a subsidiary" (the SMT/IMM entities later named in FY2022's annual report) that simply didn't repeat this year. Strip that gain out of H1 2022's operating income and Q1 2023's own Rp722.4 billion tower sale-leaseback gain out of H1 2023's, and adjusted operating income actually grew a real 65.4% YoY (Rp4,043.4 billion vs. Rp2,445.2 billion) - the opposite direction from the reported -21.8% the raw operating-income line shows. The company's own normalized net profit figure (excluding one-offs it discloses) grew 37.0% YoY to roughly Rp1,273 billion from roughly Rp929 billion.
The more interesting trend, invisible in the headline P&L entirely, is what continued from Q1 2023's tower-sale-funded debt paydown: total debt (loans, bonds, sukuk, excl. leases) fell a further 19.0% quarter-over-quarter to Rp15,073.0 billion, now down 29.2% from FY2022's Rp21,294.3 billion in just two quarters - the fastest sustained deleveraging this site has tracked for Indosat since coverage began.
The Prescription
Indosat should publish its normalized-profit reconciliation as a standing note in the audited interim financial statements themselves, not only in the investor presentation - this is the second consecutive quarter this site has had to reconstruct the "real" YoY comparison from presentation slides rather than the filed statements, and a headline reader relying only on the P&L would wrongly conclude the business weakened 41.5% this half. What it should keep doing: continuing the debt paydown pace set in Q1 - two straight quarters of double-digit percentage debt reduction is a genuinely strong signal, and the company should say explicitly whether it has a target leverage level it's paying down toward, something this site asked for as far back as FY2022's coverage.
Key Financial Metrics
H1 2023 (six months ended June 30, 2023) vs H1 2022, consolidated
FX: Rp15,000 = US$1 (June 30, 2023) - period-end market quote, used only to convert the USD columns.
| Metric | H1 2023 (Rp) | H1 2023 (US$) | H1 2022 (Rp) | YoY (Rp) | YoY (US$) |
|---|---|---|---|---|---|
| Revenue | Rp24,674.8B | ~$1,645.0M | Rp22,526.6B | ✅ +9.5% | ✅ |
| EBITDA» (company-disclosed) | Rp11,383.0B | ~$758.9M | Rp9,178.0B | ✅ +24.0% | ✅ |
| Operating Income» (pre-financing subtotal; both years include one-off items) | Rp4,765.8B | ~$317.7M | Rp6,097.2B | ⚠️ -21.8% (mismatched one-offs) | ⚠️ |
| ...Operating Income, excluding each year's one-off gain | Rp4,043.4B | ~$269.6M | Rp2,445.2B | ✅ +65.4% | ✅ |
| Net Income (attributable to owners, reported) | Rp1,908.4B | ~$127.2M | Rp3,260.3B | ⚠️ -41.5% (mismatched one-offs) | ⚠️ |
| ...Net Income, company's own normalized figure | ~Rp1,273B | ~$84.9M | ~Rp929B | ✅ +37.0% | ✅ |
| ...of which, consolidated total (incl. non-controlling interests») | Rp2,043.9B | ~$136.3M | Rp3,566.9B | ⚠️ -42.7% | ⚠️ |
| Free Cash Flow» (operating cash flow - capex) | Rp4,056.7B | ~$270.4M | Rp1,844.9B | ✅ +119.9% | ✅ |
| Total Cash | Rp5,341.3B | ~$356.1M | Rp6,813.2B | ⚠️ -21.6% | ⚠️ |
Total debt fell to Rp15,073.0 billion from Q1 2023's Rp18,606.4 billion (-19.0% QoQ) and FY2022's Rp21,294.3 billion (-29.2% since year-start), even as total cash itself fell 55.0% quarter-over-quarter to Rp5,341.3 billion - the two moved in opposite directions because operating cash flow (Rp8,482.0 billion for the half, +13.1% YoY) and the tower-sale proceeds were used to fund both the debt paydown and a heavier capex program (Rp4,425.3 billion for the half) rather than sitting in cash.
H1 2023's headline 41.5% profit decline is a comparison-base artifact - H1 2022 included a one-off deconsolidation gain that didn't repeat. Normalized profit grew 37.0%, and total debt fell 29.2% in two quarters, the strongest deleveraging trend this site has tracked for Indosat. See Beyond the Usual below.
Key Operational Metrics
H1 2023's located source documents don't include a numeric subscriber count or blended ARPU table in text-extractable form - not available; the investor presentation's operational commentary is limited to EBITDA margin (46.1% for H1 2023 vs. 40.7% for H1 2022, +5.4 percentage points) without a corresponding subscriber base figure.
Segment Comparison
| Segment | Revenue H1 2023 | Revenue H1 2022 | YoY | Share of Revenue |
|---|---|---|---|---|
| Selular (cellular) | Rp21,177.7B | Rp19,537.0B | ✅ +8.4% | 85.8% |
| MIDI (enterprise/data/internet) | Rp3,029.2B | Rp2,618.0B | ✅ +15.7% | 12.3% |
| Telekomunikasi Tetap (fixed) | Rp467.8B | Rp371.5B | ✅ +25.9% | 1.9% |
| Total | Rp24,674.8B | Rp22,526.6B | ✅ +9.5% | 100% |
Selular
Grew 8.4%, slightly behind total revenue growth for a second straight period after Q1 2023's 9.4% - a small, gradual mix shift toward the two smaller segments rather than a reversal of Selular's dominance.
MIDI
Grew 15.7%, accelerating further from Q1 2023's 11.2% and now clearly ahead of its FY2022 full-year pace of 5.7% - the reacceleration flagged as tentative last quarter looks more like a real trend two quarters in.
Telekomunikasi Tetap
Grew 25.9%, its seventh consecutive period of growth this site has tracked, continuing to be the fastest-growing segment even as it stays under 2% of total revenue.
Beyond the Usual
A Rp9.6 Trillion Capex Commitment Pipeline Sits Behind the Reported Capex Number
Note 29 discloses Rp9,612.3 billion (plus USD3,990 thousand) in contractual capital commitments for telecommunications equipment and related services as of June 30, 2023, of which Rp5,063.0 billion (plus USD2,586 thousand) hadn't yet been received - concentrated with vendors PT Huawei Tech Investment, PT Nokia Solutions and Networks, PT Ericsson Indonesia, and PT ZTE Indonesia. This is roughly 1.15x this half's actual capex spend (Rp4,425.3 billion) sitting as a forward commitment - a useful gauge of how much network investment is already contractually locked in beyond what's shown in the cash flow statement.
The Lease Counterparty List Keeps Growing, Now Including This Quarter's Own Sale-Leaseback Buyers
The same commitments note lists Indosat's significant tower/site lease counterparties: EPID, Protelindo, Mitratel, Tower Bersama Infrastructure, and more than a dozen smaller regional tower companies - including Dhost, the buyer in Q1 2023's indoor-infrastructure sale-leaseback. Seeing Dhost already listed among the Company's standing lessors this quarter confirms the Q1 transaction converted straight into an ongoing lease relationship, not a one-time asset sale with no further tie between the parties.
An IBM Managed-Services Agreement From 2016 Quietly Closed Out via a Purchase Option in Early 2022
A February 2016 agreement with IBM for IT-operations managed services, extended in January 2019 through January 2022, expired as scheduled and Indosat exercised its option to purchase the leased IT equipment for a Rp755 million residual-value guarantee rather than returning it or renewing - a small, clean example of a long-running vendor relationship ending on its contractual terms rather than through a dispute or write-off.
Target Valuation Range
Bottom line: roughly Rp62,900-Rp94,300 fair-value enterprise range (bear-to-bull, annualized EV/EBITDA-based, implying roughly Rp7,150-Rp11,050 nominal per share) against a Rp8,625 actual nominal close - the stock traded in the lower half of that range, still pricing the reported profit decline more than the improving underlying trend.
Note on price data: Indosat's shares closed at a split-adjusted Rp2,156.25 on June 27, 2023 (the last trading day at or before June 30) on a historical price basis - Indosat completed a 1-for-4 forward stock split in October 2024, so that historical close is stated on a post-split basis. Multiplying by 4 recovers the actual nominal price quoted on the exchange that day - the same convention Q1 2023's post used.
| Market cap → enterprise value | H1 2023 (period-end) |
|---|---|
| Share price (period-end, nominal) | Rp8,625 |
| Shares outstanding (pre-split) | 8,062,702,739 |
| Market capitalization | ~Rp69,540.8B (~$4,636.1M) |
| Plus: total principal debt (loans, bonds, sukuk; excl. lease liabilities) | Rp15,073.0B |
| Less: cash and cash equivalents | Rp5,341.3B |
| Enterprise value | ~Rp79,272.5B (~$5,284.8M) |
| Peer/multiple sanity check | H1 2023 (annualized) | FY2022 (adjusted) |
|---|---|---|
| EBITDA (annualized) | Rp22,766.0B | Rp19,796.6B |
| EV / EBITDA | ~3.48x | ~3.11x |
| Net debt (total debt - cash) | Rp9,731.7B | Rp11,786.4B |
| Net debt / EBITDA | ~0.43x | ~0.60x |
| P/E (annualized, reported EPS) | ~18.2x | not meaningful |
| P/E (annualized, normalized EPS) | ~27.3x | not meaningful |
| Scenario | Key assumption | Multiple | Implied EV | Implied nominal price |
|---|---|---|---|---|
| Current (H1 2023 close) | actual market price | ~3.48x annualized EBITDA | ~Rp79,273B | Rp8,625 |
| Bear | Deleveraging pace slows and capex commitments pull cash back down | ~2.75x | ~Rp62,607B | ~Rp7,143 |
| Base | Debt paydown and EBITDA growth both continue near this half's pace | ~3.5x | ~Rp79,681B | ~Rp8,676 |
| Bull | Normalized profit growth catches up to EBITDA scale as one-offs fade out entirely | ~4.15x | ~Rp94,479B | ~Rp10,987 |
Net debt/EBITDA improved to ~0.43x from FY2022's ~0.60x, slightly higher than the company's own disclosed 0.45x (a small methodology difference, likely in how "net debt" is defined against lease liabilities) but directionally the same real deleveraging story. Still no multi-year DCF: two quarters of one-off-adjusted data is a better base than one, but this site would want to see the debt paydown and normalized-profit growth both sustained through at least FY2023's close before building a standalone projection.
PT Indosat Tbk's unaudited interim consolidated financial statements for the six-month period ended June 30, 2023, together with the accompanying notes, and the company's H1 2023 investor presentation.