PT Sarana Menara Nusantara Signals Steady, Cautious Growth

PT Sarana Menara Nusantara Tbk ((SMNUF)) has held its Q4 earnings call. Read on for the main highlights of the call.

PT Sarana Menara Nusantara’s latest earnings call struck a cautiously positive tone as management balanced solid 2025 results with clear headwinds. Revenue, EBITDA and net profit all rose year on year, underpinned by connectivity and fiber growth plus disciplined deleveraging. Yet executives stressed pressure from high interest rates, tax volatility and muted tower demand amid telco consolidation.

Full-Year Revenue and Profitability

PT Sarana Menara Nusantara reported operating revenue of IDR 13.3 trillion for FY2025 and net profit after minority interest of IDR 3.678 trillion. This implied net profit growth of 10.3% year on year, with management emphasizing an overall revenue increase versus FY2024 despite some inconsistencies in disclosed growth percentages.

EBITDA and Margins

EBITDA climbed to IDR 10.97 trillion, up 2.5% year on year, demonstrating resilient core profitability. The company cited a robust net income margin of around 27% and highlighted an 11–11.5% multi‑year EBITDA CAGR, underscoring its ability to translate scale into earnings.

Connectivity and FTTH as Growth Engines

Connectivity and fiber-to-the-home services emerged as the main growth drivers as traditional tower additions slowed. Connectivity activations surged more than 53% year on year to above 25,000, while FTTH penetration reached about 14% and FTTH activations posted growth figures as high as the low‑50% range.

Operational Scale and Network Expansion

The group preserved significant operational scale with roughly 36,247 towers and about 60,500 tenants, producing a tenancy ratio of 1.67. During 2025 it added 847 towers, nearly 6,800–7,000 km of revenue‑generating fiber and expanded its home footprint by roughly 89,000 connects and 31,000 home passes.

Capital Management and Deleveraging

Management leaned hard into balance sheet repair, repaying about IDR 7.2 trillion of debt supported by a rights issue that raised IDR 5.5 trillion. Leverage declined to 3.74 times and average interest cost fell to around 6.0%, while the company still returned IDR 1.2 trillion in dividends during 2025.

Investment-Grade and ESG Credentials

The company reaffirmed its investment‑grade status, citing a BBB‑ rating from S&P and stable outlook from Fitch. It also highlighted ESG recognition, including an MSCI ESG rating of single A and a Sustainalytics score near 24, positioning itself as a credible long‑term infrastructure partner for lenders and operators.

Guidance, CapEx and Growth Focus

Forward guidance for 2026 remains deliberately modest, with management projecting low single‑digit growth in both revenue and EBITDA. CapEx is guided at about IDR 5 trillion, with spending heavily skewed toward connectivity and fiberization opportunities including incremental FWA and 5G-related demand across its 224,000 km fiber platform.

Revenue Reporting Inconsistencies

A notable nuance for investors was the mixed revenue commentary in the call, where IDR 13.3 trillion in sales was paired with references to an IDR 4.6 trillion absolute increase. Elsewhere management described roughly 4–4.6% year‑on‑year revenue growth, leaving some ambiguity around the precise magnitude of the topline improvement.

Interest Rate and AFFO Pressure

Despite stronger EBITDA, high interest rates muted growth in adjusted funds from operations, highlighting the drag from financing costs. Average borrowing costs ended 2025 at around 6.0% with interest expense near IDR 2.788 trillion, prompting management to keep deleveraging and refinancing as key priorities.

Leverage and Liquidity Position

The company’s leverage, while improved, remains elevated at 3.74 times and leaves limited room for error in a higher‑rate world. Year-end cash stood at roughly IDR 650 billion after significant debt repayments, the rights issue deployment and dividend payments, underscoring the need for disciplined cash management.

Tax Volatility and Forecasting Risk

Executives warned that tax expense remains a swing factor, referencing prior periods of higher‑than-expected tax payments and differing tax interpretations. This volatility complicates efforts to forecast normalized earnings and could cause deviations between operational performance and bottom‑line reported profit in 2026.

Industry Consolidation and Tower Outlook

Telco consolidation, including the Indosat‑Hutchison and XL‑Smartfren deals, has created near‑term noise through relocations and network restructuring. Management expects tower-related revenue and tenancies to stay broadly flat in the short term, with most incremental growth likely to come from non‑tower fiber and connectivity services.

Utilization and Pricing Headwinds

Some operational metrics showed marginal softening, such as the fiber‑to‑tower tenancy ratio slipping from roughly 1.84 to 1.79. Management acknowledged generally low sector yields but argued that pricing has stabilized, and it intends to compete on service quality and integrated value rather than engaging in aggressive discounting.

Macro and Geopolitical Uncertainty

The company framed its cautious stance partly around rising macro and geopolitical risk, including the impact of conflicts and higher energy prices. These factors could weigh on telco customers’ spending plans, bank lending appetite and overall liquidity conditions, reinforcing the low‑growth guidance for 2026.

Forward-Looking Guidance and Strategic Priorities

Looking ahead to 2026, management is targeting low single‑digit gains in revenue, EBITDA and net profit while keeping CapEx near IDR 5 trillion and leverage in check. The strategic playbook centers on boosting connectivity activations, pushing further fiberization and carefully pursuing acquisitions, all while defending investment‑grade ratings and funding growth mostly from free cash flow.

PT Sarana Menara Nusantara’s earnings call painted the picture of an infrastructure player converting scale into steady profits while navigating a tougher macro and sector backdrop. For investors, the key takeaways are resilient core earnings, accelerating fiber and connectivity growth, improving credit metrics and a management team openly cautious yet opportunistic heading into 2026.