ISAT FY2023 Finally Reveals Which Data-Center Entity Was Behind Indosat's Mystery 2022 Gains - SMT

A Clean Year, and a Two-Year-Old Mystery Finally Closes

FY2023 is the first full year this site has covered where the headline profit decline isn't mostly a one-off comparison-base artifact: revenue grew 9.6% to Rp51,228.8 billion, EBITDA grew 23.0% to Rp23,938.0 billion, but net income attributable to owners fell a genuine 4.6% to Rp4,506.4 billion - because FY2022's Rp4,582.2 billion combination of one-off gains (the SMT/IMM deconsolidation gain plus a step-acquisition remeasurement gain) was simply larger than FY2023's Rp1,342.5 billion in sale-leaseback gains. Strip both years' one-offs out and adjusted operating profit actually grew a real 51.2% YoY (Rp9,085.2 billion vs. Rp6,008.6 billion) - the underlying business kept improving all year, it just had less one-off help doing it this time.

The year's most interesting single disclosure closes a thread this site has carried since FY2022's coverage first surfaced the name "SMT" without explaining what it does. Note 19 now reveals: on December 18, 2023, Indosat sold its data-center assets to PT Starone Mitra Telekomunikasi ("SMT") for Rp2,625.0 billion (Rp2,340.0 billion cash plus Rp285.0 billion deferred), leasing them back for 14 years and booking a Rp620.1 billion net gain - and Note 9's associates table confirms SMT is a 25%-owned Indosat associate whose "principal activity" is literally "data center rental." SMT isn't a mysterious outside party; it's Indosat's own data-center joint venture vehicle, and the FY2022 "loss of control" gain and this year's sale-leaseback gain are two chapters of the same corporate-restructuring story: Indosat progressively moving its data-center infrastructure into a jointly-owned entity and leasing it back.

The Prescription

Indosat should name SMT explicitly the first time it appears in a filing, not two years and two transactions later - this site had to wait through FY2021's unnamed gain, H1 2022's second unnamed gain, FY2022's partial naming, and now FY2023's data-center sale-leaseback to finally understand what SMT actually is. What it should keep doing: continuing to report clean, itemized subscriber and ARPU figures the way FY2023's info memo finally does - this is the first period this site has been able to cite an actual subscriber count and blended ARPU for Indosat, and it should stay a standing disclosure every quarter, not just the annual filing.

Key Financial Metrics

FY2023 (year ended December 31, 2023) vs FY2022 (restated), consolidated

FX: Rp15,397 = US$1 (December 29, 2023) - period-end market quote, used only to convert the USD columns. FY2022 comparatives in this filing are restated (Note 35) to finalize purchase-price-allocation measurement-period adjustments for a small prior step acquisition ("APE") - a roughly Rp223 billion total-asset adjustment, immaterial to the headline figures below.

Metric	FY2023 (Rp)	FY2023 (US$)	FY2022 (Rp, restated)	YoY (Rp)	YoY (US$)
Revenue	Rp51,228.8B	~$3,327.4M	Rp46,752.3B	✅ +9.6%	✅
EBITDA» (company-disclosed, excl. ROU assets under PSAK 73)	Rp23,938.0B	~$1,554.6M	Rp19,468.7B	✅ +23.0%	✅
Operating Income» (both years include one-off items)	Rp10,427.7B	~$677.3M	Rp10,590.8B	⚠️ -1.5% (mismatched one-offs)	⚠️
...Operating Income, excluding each year's one-off gains	Rp9,085.2B	~$590.1M	Rp6,008.6B	✅ +51.2%	✅
Net Income (attributable to owners)	Rp4,506.4B	~$292.7M	Rp4,723.4B	⚠️ -4.6%	⚠️
...of which, consolidated total (incl. non-controlling interests»)	Rp4,775.7B	~$310.1M	Rp5,370.2B	⚠️ -11.1%	⚠️
Free Cash Flow» (operating cash flow - capex, excl. ROU)	Rp4,897.1B	~$318.1M	Rp5,247.8B	⚠️ -6.7%	⚠️
Total Cash	Rp5,189.6B	~$337.1M	Rp9,507.9B	⚠️ -45.4%	⚠️

Total debt (loans + bonds, excl. lease liabilities) fell to Rp14,803.0 billion from FY2022's restated Rp21,323.3 billion (-30.6% YoY), continuing the deleveraging trend this site tracked through Q1, H1, and 9M 2023 - Q4 alone added only a small further reduction from 9M's Rp14,959.8 billion, consistent with the pace-stall 9M's coverage flagged. Net debt closed the year at Rp9,613.4 billion, and net debt/EBITDA improved to 0.40x from 0.61x - genuinely strong leverage metrics even with cash itself down sharply, since capex (Rp12,783.4 billion, excl. ROU) roughly doubled its full-year pace in the second half.

FY2023's 4.6% profit decline is a real, if modest, YoY drop - unlike every prior post-merger period this site has covered, it isn't mostly a mismatched one-off comparison. Adjusted for both years' one-offs, operating profit grew a genuine 51.2%. See Beyond the Usual below for what "SMT" actually is.

Key Operational Metrics

FY2023 vs FY2022 - the first period this site can report actual subscriber/ARPU figures for Indosat

Metric	FY2023	FY2022	YoY
Total subscribers	98.8 million	102.2 million	⚠️ -3.4%
...Postpaid	1.6 million	1.6 million	⚠️ -0.8%
...Prepaid	97.2 million	100.6 million	⚠️ -3.4%
Blended ARPU	Rp35,600	Rp33,900	✅ +5.3%
Postpaid ARPU	Rp74,400	Rp68,200	✅ +9.1%
Prepaid ARPU	Rp35,000	Rp33,300	✅ +5.2%
4G BTS count	179,070	137,037	✅ +30.7%
5G BTS count	90	90	flat
Data traffic (petabytes)	14,417	12,561	✅ +14.8%

The subscriber decline and ARPU increase are the same deliberate trade-off Q1 2023's coverage first flagged when Indosat raised its minimum SIM card price in January 2023: the company chose fewer, higher-value subscribers over base growth, and the full year's numbers confirm the trade-off worked as intended - EBITDA margin expanded to 46.7% from 41.6%, a 5.1 percentage point gain, even as the customer count shrank.

Segment Comparison

Segment	Revenue FY2023	Revenue FY2022	YoY	Share of Revenue
Cellular	Rp43,749.9B	Rp40,242.8B	✅ +8.7%	85.4%
MIDI (enterprise/data/internet)	Rp6,472.9B	Rp5,725.9B	✅ +13.0%	12.6%
Fixed Telecommunications	Rp1,006.0B	Rp783.6B	✅ +28.4%	2.0%
Total	Rp51,228.8B	Rp46,752.3B	✅ +9.6%	100%

Cellular

Grew 8.7% for the year, driven by data, value-added services, and interconnection revenue offsetting a continued decline in voice - roughly in line with total revenue growth and holding its 85%+ share of the business.

MIDI

Grew 13.0% for the full year, a reacceleration from the 5.7% pace FY2022's coverage flagged as a slowdown, driven by IT Services, Fixed Internet, and FTTH revenue offsetting a decline in Fixed Connectivity - the segment genuinely picked back up this year.

Fixed Telecommunications

Grew 28.4% for the full year, driven by international call revenue - still under 2% of total revenue, but its ninth consecutive period of growth this site has tracked since H1 2021's turnaround.

Beyond the Usual

SMT Is Finally Named and Explained: A 25%-Owned Data-Center Joint Venture, Not a Mystery Third Party

Note 9's associates table discloses PT Starone Mitra Telekomunikasi ("SMT") as a 25%-owned Indosat associate whose principal activity is "data center rental." Combined with Note 19's disclosure that Indosat sold its data-center assets to SMT on December 18, 2023 for Rp2,625.0 billion (leasing them back for 14 years, booking a Rp620.1 billion net gain), this closes a thread this site has carried across three prior posts - FY2021, H1 2022, and FY2022, where SMT appeared only as an unexplained counterparty behind large one-off gains. The pattern across all these transactions is now clear: a deliberate, multi-year program of moving infrastructure (towers, data centers) into jointly-owned entities and leasing it back, not a series of unrelated one-off events.

The FY2022 Comparative Figures in This Filing Were Quietly Restated

Note 35 discloses that FY2022's balance sheet was restated to finalize the purchase-price allocation for a prior step acquisition (an entity referred to as "APE"), moving roughly Rp223 billion of total assets and reducing non-controlling interests by Rp246.4 billion - a routine measurement-period true-up under PSAK 22, not a correction of an error, but worth flagging since it means FY2022's total-debt and total-asset figures in this post differ slightly (well under 1%) from the figures FY2022's own post originally reported before the restatement.

The Legacy IMM Legal-Case Provision Remains Unchanged for a Sixth Straight Year

The same Rp1,358.6 billion provision this site has tracked since FY2018 and detailed fully in Q1 2023's coverage remains exactly Rp1,358.6 billion at FY2023's close - management continues to state no further provision is required under PSAK 57, with IMM itself having been deregistered in February 2023.

A New Fiber Partnership With MNC Play Extends the Home-Internet Push

Indosat's Q4 2023 announcement of a collaboration with Asianet and PT MNC Kabel Mediacom ("MNC Play") - acquiring MNC Play's fiber-based customer base - is a genuine new-business-line development worth tracking forward, extending Indosat's home-internet ambitions beyond the BDx Indonesia data-center joint venture this site has covered in prior posts.

Target Valuation Range

Bottom line: roughly Rp7,400-Rp12,200 fair-value range (bear-to-bull, EV/EBITDA-based) against a Rp9,375 actual nominal close - the stock traded almost exactly at this site's implied base case, reflecting a market that's pricing in the real, non-one-off-driven leverage and margin improvement this year delivered.

Indosat's own FY2023 press release discloses its period-end closing price directly: Rp9,375, with a market capitalization of Rp75.6 trillion - this cross-checks exactly against a split-adjusted historical close of Rp2,343.75 for December 29, 2023, multiplied by 4 to restate it in pre-split nominal terms (Indosat's 1-for-4 stock split took effect October 14, 2024), the same methodology used in Q1, H1, and 9M 2023's posts.

Market cap → enterprise value	FY2023 (period-end)
Share price (period-end, nominal)	Rp9,375
Shares outstanding (pre-split)	8,062,702,739
Market capitalization	~Rp75,587.8B (~$4,909.1M)
Plus: total principal debt (loans, bonds; excl. lease liabilities)	Rp14,803.0B
Less: cash and cash equivalents	Rp5,189.6B
Enterprise value	~Rp85,201.2B (~$5,533.9M)

Peer/multiple sanity check	FY2023	FY2022 (restated)
EBITDA (company-disclosed)	Rp23,938.0B	Rp19,468.7B
EV / EBITDA	~3.56x	not directly comparable (pre-restatement figure used in FY2022's own post was Rp19,796.6B adjusted)
Net debt (total debt - cash)	Rp9,613.4B	~Rp11,815.4B
Net debt / EBITDA	~0.40x	~0.61x
P/E (reported EPS)	~16.8x	not meaningful (one-off distorted)

Scenario	Key assumption	Multiple	Implied EV	Implied nominal price
Current (FY2023 close)	actual market price	~3.56x EBITDA	~Rp85,201B	Rp9,375
Bear	Capex step-up compresses free cash flow and deleveraging fully stalls	~2.9x	~Rp69,420B	~Rp7,418
Base	Margin and leverage gains hold through FY2024, growth continues at a similar pace	~3.6x	~Rp86,177B	~Rp9,498
Bull	Subscriber-value trade-off keeps paying off and deleveraging resumes at Q1-H1 2023's pace	~4.5x	~Rp107,721B	~Rp12,167

Net debt/EBITDA closed the year at 0.40x, matching the company's own disclosed figure closely and confirming FY2023 as the strongest balance-sheet position this site has tracked for Indosat since the merger. No multi-year DCF yet: this is the cleanest, least one-off-distorted full year of data this site has covered for the merged entity, and with FY2024 quarters still to be backfilled, this would be a reasonable point to start building one - but that's better done once a full FY2024 comparison year is also in hand.

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