Result Highlights

 2Q17 bottom line (IDR 442.2 bn) soared 239.9% (vs IDR 130.2 bn; QoQ) and 72% (vs IDR 257.2 bn; YoY) .

 Revenue beat our forecast and jumped 78.6% (QoQ) while EBIT climbed 187% (QoQ) as Opex decreased by % 11.5% (QoQ).

 1H17 new contract achievement has 49.8% run rate of the company’s annual target.

Optimism buzzes after robust earnings result

PTPP delivered stellar earnings result for 2Q17, as the company’s revenue, gross profit, EBIT and net profit all rose by 34.1%, 45%, 44.2%, and 72% YoY, respectively (Figure 1). This is above our forecast and consensus, particularly higher from its last 6 years average first half achievement of 26.31% vs 53.3% (PSI estimate). Furthermore, we believe better cost efficiency which saw margin improvement in both gross and operating to 15.2% and 13.3% played a major role in contributing to this superb result (vs. 14.1% and 12.4% in 1H16). On the other hand, revenue (+34.1% YoY) achievement was largely in-line with its last 4 years average but marginally hindered by escalating interest expense (+45.7% YoY) which brought PTPP’s DER at 0.71x in 1H17 (vs. 0.69x in 4Q16).

INDONESIA
PT Phillip Securities Indonesia
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Website: www.phillip.co.id