PT Link Net Tbk (“Link Net” or the Company; stock code: “LINK”)
Financial & Operational:
Link Net booked revenue of Rp4.5tn in FY2021, growing 10.4% compared to Rp4.05tn in FY2020. Revenue strengthened in 4Q2021 with Link Net booking revenue of Rp1.2tn, growing 11.8% compared to Rp1.1tn in 4Q2020. The company’s EBITDA was Rp2.5tn in FY2021, growing 8.5% compared with Rp2.3tn in FY2020. Link Net booked Net Profit of Rp885bn in FY2021.
EBITDA and Net Profit margins were 56.0% and 19.8% respectively. The company had operating cash flow of Rp1.97tn in FY2021, growing 6.1% compared to FY2020. The Company’s Net cash position was Rp271bn as at the end of 2021
|Financials (IDR bn)||FY21||FY20||%||4Q21||4Q20||%|
|EBITDA Margin (%)||56.0%||56.9%||51.3%||61.0%|
Link Net continues to successfully execute its migration project. Upon the successful completion of this project the company will see a significant increase in cash flow. Shareholders can look forward to the completion of Link Net’s migration project and then cash flow from annual pole rental fees can be diverted for productive investment purposes including network growth and subscriber acquisition.
Link Net maintained its market leading Average Revenue Per User (ARPU) in 2021. As at FY2021, the Company’s average revenue per user was Rp348k per month, the equivalent to US$24.
In 2021 Link Net added an additional 190k home pass, taking our network size to 2.87 million homes passed. Currently, Link Net has a presence in 23 cities across Java, Medan, Batam and Bali.
Subscriber growth was subdued in 2021 in part due to the economic, health and social impacts from COVID. Despite comprehensive measures taken by the business to protect staff, customers and to reassure communities through our safety protocols, COVID did at times lead to a reduction in productivity of our sales force and operations teams. Some communities significantly increased risk management measures which at times limited the ability for sales and operations teams to add new customers.
At the beginning of the pandemic there was a sharp shift in consumer behavior which led to a substantial increase in demand for internet and Pay TV services. This was driven largely by social restrictions and thus the resulting high demand for broadband services to facilitate working and learning from home and overall increases in demand for online entertainment. In the initial quarters of the pandemic during 2020, we added a record high number of subscribers. However, after almost 2 years of the pandemic, we saw evidence of decreasing customer spending power along with lower consumer sentiment. Historically churn is always highest in the first year of the customer life cycle. After adding 171k new subscribers in 2020, as has occurred in the past, some of these have churned out over the course of 2021. In addition, there were lower gross subscriber additions in 2021 due to the prolonged impact of COVID. Link Net added 16k subscribers in FY2021 taking Link Net’s total subscriber base to 855k. As economic conditions improve in 2022, we do expect subscriber growth to return to higher levels.
To put upward pressure on subscriber growth and to reduce churn we’ve invested in our service quality through operational, product and network enhancements. Link Net has developed the market leading entertainment and sports package. The sports offering includes Premier League and Champions League football, NBA, Formula 1, MotoGP, tennis, golf, rugby, badminton and many more. Link Net has also launched the first OTT aggregation package in Indonesia during 2021. This OTT product suite provides our customers with a large selection of high-quality OTT content for a lower price than if they subscribed to these services independently. The Company will continue to invest in its product and network offerings to provide subscribers with a world-class entertainment and internet experience. Link Net continued to invest in its network and operations. These include strategic network refurbishments, proactive monitoring and response to key operational KPI’s as well as digital self-service tools and enhancements. In part due to these measures and the reduction in COVID related restrictions which improved economic prospects, Link Net expects growth to return throughout 2022.
Enterprise Business Recovery:
Link Net’s enterprise business rebounded in 2021 and booked record high revenue during the year. In FY2021, enterprise business revenue grew 25% to Rp780bn compared with Rp625bn in FY2020. Link Net’s enterprise business is expected to continue its recovery from the negative impacts of COVID.
President Director Comments:
Mr. Marlo Budiman, President Director and CEO, commenting on the results: “Despite the challenges of 2021, Link Net has still recorded growth of revenue and EBITDA of 10.4% and 8.5% respectively. We will continue to invest in our network, products, and technology capabilities to ensure our subscribers can enjoy worldclass entertainment and high-speed internet connections. We’re proud to have played a part in easing people’s lives throughout the pandemic.”