PT Smartfren Telecom Tbk (FREN) has faced a dramatic financial setback, with its losses surging by 1,088% as it nears its merger with PT XL Axiata Tbk (EXCL). For 2024, the company reported a loss of IDR 1.29 trillion, a sharp contrast to the previous year’s loss of IDR 108.93 billion.

The company’s revenue dropped slightly by 2.06%, totaling IDR 11.41 trillion for the year. This decline was driven by a fall in telecommunications service revenue, which decreased by 2.75% to IDR 9.9 trillion. Additionally, interconnection service revenue also saw a decline, dropping from IDR 397.8 billion to IDR 259.8 billion.

Smartfren’s operating expenses also rose, climbing 5.05% year-on-year to IDR 11.73 trillion. This resulted in an operating loss of IDR 309.35 billion, compared to a profit of IDR 543.7 billion in 2023. On top of this, the company recorded an increase in interest and financial expenses, reaching IDR 1.32 trillion, up from IDR 1.28 trillion.

Further complicating matters, Smartfren’s gains from bonds and derivative liabilities fell sharply from IDR 750.29 billion to IDR 116.09 billion. These financial pressures have caused the company’s losses to skyrocket, putting more uncertainty on the upcoming merger.

As the merger with XL Axiata draws nearer, the key question is whether Smartfren can recover from these mounting financial troubles. The future of the telecommunications giants remains uncertain, with all eyes now on how the merger will unfold amidst these challenges.

SOURCE: BLOOMBERGTECHNOZ | PHOTO: SMARTFREN

This article was created with AI assistance.