PT Sarana Menara Nusantara Tbk. (TOWR) Earnings Call Transcript & Summary

Good day, everyone. Thank you for joining us in this afternoon. Today's welcome to the Sarana Menara conference call for the full year 2023 results. I am Selvi, the research analyst from Kay Hian Sekuritas. [Operator Instructions] Our speaker today is Adam Gifari, the Vice President Director of Sarana Menara Nusantara. Without further ado, I will now hand over the call to you for -- to start the presentation. The floor is yours.

Thank you, Selvi. Thank you, everyone, for your time, your interest to participate in today's call with the company. We just released our results early this morning. We still schedule -- be on schedule for the earnings call in the afternoon, which is now. Let me walk you through the presentation that we have prepared for this full year results. Yes, I want to make this full screen, how do I do this? Anyway, so now, we have top left, we have 30,558 towers and 213,463 kilometers of fiber, including this fiber 213 is the including that of the revenue generating. So if you apply utilization ratio more than 1.8% then you come across the actual kilometer pole of fiber that we have under FTTT and as a matter of fact, it's the only part of the fiber that we have been able to present in an incremental return mode like the TOWR tenancy ratio. So far, we still maintain the build-to-suit model similar with ours, and we flip with fiber. So now we have towers. We have fiber to the tower. We have FTTH and then I think, to some extent, the only one that is not build-to-suit is the Enterprise segment here, under which we basically go after the customers, go after where they are located and then try to do as much as possible when getting them, when obtaining their business the service is the using existing infrastructure that we have. To the left, we still have so far investment-grade ratings maintained with S&P as recent as 2 weeks ago. And with Fitch it's still, I think, should be the same. CAGR revenue and EBITDA around 15% over the past 5 years, ROIC, return on investment is 8.5%, ROE, 21% as of December 2023. The stock has all these particulars. The most recent one is that we get upgrade to AA by MSCI ESG rating. So capital management, I think by way of update for those who are following the company, we think we should have -- so far, the last one issuance we did was third quarter 2023, so we want to do another one as soon as we can. Just to be sure when there is a fine moment for us to issue rupia bonds that we are able to do so. So we are preparing what Indonesia call it [indiscernible], which is I think in U.S. terms called like short [ registered ] bonds. So we will be prepared something like that in coming quarters, second half -- second quarter. We're about to launch it in a matter of weeks. So far, #2, the low risk business nature is still there, only by the time we agree for our customers to move such as that with the IOH the situation that we -- the customers can move their financial liability to another location. So we can talk more about this, but basically, we have been, so about 7,000 of leases with IOH post the merger needing to be soft because they are located in a lot of locations that are redundant from 7,000, 1,000 is already short-term [indiscernible]. So [indiscernible] after the merger decided not to renew and then that leaves us with about 6,000 during 2023, we allowed for some 2,000 relocations, including with collocations on our [indiscernible] sites. And then so far, this month of April, we have received about 1,000 accumulative from IOH to be relocated. So that leaves us about 3,000 something of sites under IOH relationship needing to be relocated, which means that we have left about 45% in the relationship with IOH that needs to be relocated to new locations. Just by way of update to everyone in this call because some questions came our way. So that's as of today, we just end of March, early April, so that's where we are today when it comes to the IOH situation. ESG-conscious company, I think we got the mandate to basically from the Board to continue to promote where we can contribute for a cleaner sector. I think some of you have noticed that we have launched a company called iForte Energy to basically complement our existing footprint of infrastructure, so when it comes, there is more stringent, there is more cost related to excessive emission in the sector, we are prepared. So it's called iForte energy. The company is newly established in 2023 but it's called iForte Energy because it's basically -- and it'd not our -- based -- put under iForte. And then #4, the industry is consolidating. We've seen just I think 2 months ago or one month ago, MNC cable T.V business was sold to Indosat. We expect to see more of that cable business being sold, fiber business being sold, including towers, there's also opportunity possibility for more towers to be sold to the whoever has the interest. I think our position is to always look at opportunities because we've seen what happens with the telcos. After acquisition, we see better financial metrics, better valuation. So we want to be active in that space as well. And then #5, I think contracted revenue, IDR 71.1 trillion is significant increase from previous quarter. I think previous quarter was about IDR 64 trillion, IDR 65 trillion. So we had a lot of renewals also in the South XL that has taken place for this year expirations. So again, we've done it with something that is usual for us. I think for our renewals, churn rate is still expected to be around 1%, which is normal in the TOWR business here. And then you've seen our numbers, we can talk more about dividends. The cash flow is still quite strong. The margins on cash flow is quite strong. So we intend to basically continue dividends that we have seen in previous years. Going into next slide. This macroeconomy slide we just added this quarter because we think this is an important slide to talk about when it comes to investment in Indonesia, a lot of investment that has come our way in Indonesia industries, I don't think it's going to be stopping here, especially that we've seen continuation of the mandate of the newly elected President that is going from the previous President is going to take place in 4Q this year, and it's going to be a continuation I think we are very much quite optimistic on where the country is going. Infrastructure spend continues to be important. It continues to be significant and a lot of new places, including in Java, we'll need an infrastructure for Telkomsel. And that's where we will be. And then I think for us, no longer dependent on raw commodity prices, but also the value-added going forward is important for the country as well as the rupia, if you look at Sarana Menara Nusantara stock as a rupia asset. The telco industry since the way we look at these 2 charts, ever since the consolidation taking place in 2021, we've only seen price repairs for indoor XL and Telkomsel. So hopefully, this continues a little bit more better monetization of previously made investment by the operators the TOWR, the fiber equipment, et cetera. So we are cautiously optimistic on the trajectory of this business, basically offering the same thing, but market structure after certain consolidation can be beneficial for parties involved. And then where we have our towers portfolios I think the split is still around 52%, 53% in Java. We have now going 3,500 towers. We've discussed earlier on that we will be doing a lot of new towers location for to serve as locations for IOH post merger. Sot his non-power tower count will grow quite significantly from 30,000 to 31,000, 32,000, based on the need of the emerging parties. Our portfolio of fiber, as you can see here, Java is about 117 kilometers, and all these numbers are inclusive of the utilization ratios, as you can see in the estimates below. So total is 182. So Java is 60% where we have locations, where we have fiber connected FTTT for [indiscernible] purpose. [indiscernible] are all basically pretty much 0 when we started 5, 6 years ago. So -- and then these numbers on the top just below the map excluding that of the FTTH, which -- under which we have close to 13,000 kilometers of fiber under FTTH. We are hopeful wherever new fiber solution that we are offering to the industry can basically piggyback on our -- all this fiber that we have in the whole of country. As you may remember also that we only started this fiber venture in 2017. So we have 6 or -- most of our fiber are basically very young, 6 to 7 years old. So we probably have the only youngest fiber cable in the country with the new mindset of build-to-suit still that is not available in any other markets in the world yet. So we can continue talking about this, but we haven't seen any other examples like this in markets outside of Indonesia. So our build back return strategy, investing in towers for colocations, expand fiber optic networks. Now we have expanded into FTTH. Also you can see also the numbers there. The growth is quite substantial. We continue to see establish a relationship with customers. We expect to see also from another customers, who are working or needing our help with the FTTH expansion. We have a lifted balance sheet, very high cash flow generation from revenue. I think I saw a number around 70% of around 70% to 80% of cash is turning to cash flow from operations, from collections. So we are using a lot of cash to basically reinvest into the business, organic or otherwise. During 2023, we added 764 towers. We added 32,400 kilometers of revenue generating fiber. Added to 1,100 activations. And then Home Connect added during the year of more than 100,000 with a total of additional 652 -- 642,000 home passes during the year ended. So return so far, we are intending to protect investment grade, so retaining dividend policy, we mentioned about whatever the numbers that we are showing this year, 2023, the intention is to keep the investment -- the dividend policy of IDR 4.2 trillion as slated in our budget. So this is a continuation of what we started in 2017. So tenancy ratio, 1.78% of the total towers 30,500 and 54,300 tenants, a decrease, as we have described before, since we are basically allowing for a location, the 2 tenant towers becomes 1 and then 1 tower that we are building a new for indoor [ supply vacation ] which translate into lower tenancy ratios before we end up getting more business from the IOH relationship after all these exercises, 52% of the towers located in Java, even though we know in those post merger is very aggressive ex Java and then fiber to the tower, we have accumulated 182,000 kilometers of revenue-generating fiber for FTTT as of December, and this is excluding the current FTTT fiber as well as FTTH fiber. So right now, we are looking at growing FTTH very aggressively, given that we have on hand, the contracts for us to perform the rollout. So the spend of CapEx for 2023, as you can see, is the continuation of 2022 meaning that the orange part is -- tends to be higher than that of the tower. The 2022 is a bit of an anomaly because we paid for mandatory tenant offer for SoP shares of 1 trillion approximately in January 2022. So in actuality, in 2022, 2023, we spend for non-tower is already much higher than that of towers. The non-tower CapEx is higher than that of towers. And as you can see here at the bottom here, the dependency ratio of towers has dipped to 1.78% from previously 1.81% with the utilization ratio on fiber has grown -- the FTTT has grown nicely from 1.7% to 1.86%. And we continue to do so, basically utilizing our existing infrastructure. It's just that we have not been able to pinpoint with high accuracy where we see overlap of FTTH with that of the FTTT where we have seen FTTT on assisting FTTH fiber. And not to mention, we also intend to use our FTTH, FTTT assets for our connectivity business. I think the proof will be on the numbers, return on FTT at the end of the day, the more we are efficient, the less we spend on CapEx, the better we become on our P&L. So this is a continuation. I think for 2023, we have -- we did not do any TOWR acquisition. We see opportunities for us to acquire some towers this year 2024 and 2025. So I think this is not to say the consolidation in tower 6 is done, it's finished. I think there's still opportunity for us to buy something as well as into fiber Internet service providers to complement our existing footprint. On the table below, yes, as you can see, the growth of revenue-generating fiber continued to grow nicely as well as the number of activations under FTTT. You may see some noises on the connectivity part because some accounts with the government require us to audit it and then some business may not be continuing because they have replacement and our solution was only temporary for them but basically, on the non-government accounts we are very much active. We are very much aggressive on trying to basically go after the customers in the connectivity segment. This is the CAGR of the revenue growth on tariffs, as you can see, has dipped a bit from IDR 8.6 trillion this last year 2022, to IDR 8.4 trillion. But the growth on the non-tower is IDR 900 billion on its own during the year, driven by FTTT as well as FTTH and connectivity. AFFO grew -- EBITDA grew by 12.4%. AFFO grew by 11% because of interest expense. We saw an increase in interest expense during third quarter or quarter in 2023, which is the market did not expect. And we had some of our debts still floating, so that got an impact of that, just second half of last year. And this is the contracted revenues IDR 74 trillion including the IDR 3.3 trillion committed for customers to do business with us. And then that this is a significant increase from previous quarter of IDR 67 trillion. A lot of this driven by renewals and then the new businesses that we have under non-towers. Leverage remained at 4.4x -- 4.34x net debt to EBITDA. We are doing a lot of organic sites for IOH and enter into FTTH, as you can see, during these 4 quarters here. So now I mentioned to you already that we have done about 55% of the sites needing to be relocated under IOH relocations, relationship that we look to basically getting it done as soon as we can because that leaves the overhang between us and then -- between us and IOH when it comes to new business that we want to do with them, yes. So we really look forward to getting it done in the location between us and IOH. The average interest rate as of December is 6.1%. Interest in great ratings maintained with S&P and Fitch. AAA when it comes to Fitch National Scale. So going over the numbers, I think you've seen this also. The top line revenue growth of 6.4% is basically more than what we had expected originally at the start of the year of 5%, yes. So we garner 6.4%. The growth in revenues -- cost of revenues of 12% year-over-year is basically reflecting us going into higher growth in the non-tower segment. So FTTH is a relatively new segment for us as well as connectivity, making it even bigger, so -- and then depreciation is also impacted by certain accelerated depreciation under IOH relationship. So that -- some of that increased depreciation and amortization is a one-off item for this fourth quarter. And then operating expense increase, as I mentioned, is related to our going into non-tower segment, which is with lower margins, yes. And then as you can see here, the margins maintained at above 80%. Here it is from 86% to become 85%. I think we've seen this before back 6, 6 years or 7 years ago, back in 2018 when we went into a newer segment. And back then, we were only starting on FTTT segment. The non-tower segment was EBITDA margin was about 40%. Now we have been very successful in maintaining -- achieving a very high EBITDA margin. For the Non Tower, it is about 70%. But when it comes to bringing in new segment and making it bigger, we have to kind of spend for human resources, human capital to make that business bigger to the current quarters. And then balance sheet, I think this is abbreviation -- average version of the balance sheet. This is the cash flow collection was quite healthy for the year, IDR 11.4 trillion. We used it for CapEx and OpEx and an interest expense IDR 2.7 trillion. And then dividend being put in here with the cash ending IDR 400 billion. And this is the profit and loss for the quarter. Revenue increased by 3.2%, and that's over year-over-year on a quarter-over-quarter 2.6%. EBITDA decreased by 0.5% and then this year-over-year or month-over-month is 2.4%. Net profit decreased by 6.3% year-over-year and then month-over-month it decreased by 4.5%. And then by segment, Tower declined by 2.4% by various impact of churn as well as repricing even though the blended average revenue per tower is about -- still about 12.4%, if I'm not mistaken. Fiber to the Tower grew by close to more than 49%. Connectivity grew by double digit, 13.8%. FTTH grew from a small base, IDR 13 billion last year to grew 172 billion consolidated revenue grew by 6.4% for 2023 compared to 2022. For tariffs, we added tariffs 2.6 tenancy increased by 0.6% since we are relocating a lot so the impact of new towers addition is bigger than we are adding tenancy. So tenancy ratio went down even though the number of maintain as around 54,000. And then for FTTT, the growth by -- grow by kilometers of 21% year-over-year. Connectivity grew almost 20% year-over-year in terms of activation. And then FTTH home connect, I mean this is not just home passes here increased by close to [ 7 ], 15,000 almost last year 2022. We closed to 2023 with almost 120,000 compasses. I think the penetration is about 13% -- around 13% to 14% for the first year, which is not bad. I think this is safe from the company's sale handing back over to you for discussion points or questions from the floor.

Before I open the line for the participants. Please allow me to raise the first question, probably you could please share with us the outlook on the tower in 2024, probably any guidance on the new build-to-suit and also the cooperation target?

I think we have received new targets here mostly -- most of them are basically relocations proposed for 2024. So far, we have received 1,000. Most of them will be for other locations. So we expect tower revenue to be not too far from where we have to date, 2023, but the growth will still be on not our side. So if you look at the pace where we have organically serve for IOH relocations, 1,500 to 2,000. So hopefully, in 2 years' time, we should be done by this relocation purpose with IOH relationships. And then for non-towers, that will be the biggest of growth for 2024. We think this 2024 growth revenue -- for revenue should be around 4% to 6%. Yes.

Okay. Thank you, Adam. Now we will open the Q&A session for participant who would like to raise the question, please raise hand -- we have Henry [ Beja ] here. Henry, your line is open. You may address your question?

Yes. Thanks, Selvi and thank you, Adam for the call. Perhaps 2 questions from my end is First, regarding perhaps it's more about the house-keeping question. You mentioned before about the onetime expense, [indiscernible] expenses which escalated in the [indiscernible] relocation but could you elaborate more part on that? And how big is that amount by if you book us. That will be the first question. And the second question, talking about the non-tower business. If you look at on the FTTT mission statement, we highlighted the revenue generating fiber app have been quite slowing down right last year starting from the first quarter, '23 to fourth quarter '23 so just curious about would you perhaps more color on how should we expect this FTTT business going forward, perhaps in terms of the revenue generating fiber apps? Or perhaps in terms of the [indiscernible].

I think for FTTT, the increase should be single digit or low double digit for 2024 for, what do you call it, for the FTTH will be the other one. Again, this is Build-to-suit Henry, yes? So it's all driven by the operators. And then if they want to monetize and pause on insisting on adding fiber, we're fine with that. I think what we are doing as a company is to be sure whenever there is a growth opportunity to serve as a infrastructure provider, and we don't want to be left behind -- so that's where we -- that's why we started with FTTT. And then somebody else -- the rest of the industry also follows our footprint with the FTT, right? Now we are working very hard on FTTH execution. So for a I think this by year-end 2024.

Got it. Perhaps regarding my first question, but on the...

The amount is about IDR 130 billion from more than 100 towers, in 2023 accounts. So this is the impact of Indosat moving where they want to cover, right? So by the time there is a the need for -- not to renew, so they decided to do that. But what we care is actually the continuity of the business on elsewhere. So we continue to grab those opportunities to follow them where they needed the locations or where they need to serve the customers with locations, so we continue to do that. But what happens with the industry, we cannot always control, including these locations of sites.

Okay. The next, we have Niko. Niko, your line is open. You may raise your question.

My questions would be on the revenue on the fourth quarter. I see an uptick in non-power business. As you have explained, this is from business connectivities. A how sustainable this is going forward?

Well, a lot of these are built to go in December when we bought the company iForte, 2015, we only know that the industry will be the fiber, right? So that was 2015. And only in 2017, the business picked up, right? So with FTTT, which -- that we are talking still today right. And it's still growing nicely in to 2024 still and then the need of the customer is FMC, fixed mobile convergence which started in 2022. The first discussion about this business FTTH under which we become the white label, providing lease of this fiber for long [indiscernible] is 2022. And then that demand seems to be continuing since the penetration is low -- say, for instance, in Dosa they just digesting MNC cable business that they announced 2 months ago, if I'm not mistaken. And then there's -- and then we like this business because that helps us expand our footprint with build-to-suit cash flows under which we can try to find points where we can basically extract value by operating efficiency. So I'm not in a position to tell you which segment is growing, Niko, I have visibility for the next 12 months, and we are discussing it now. I mean, towers, the density of towers to rental in the market is still like low, right? I mean -- but who knows when the tower business will go up again. And then there could be some more consolidation in the tower as well as telcos. Right? So there will be another cycle like this. But fortunately, we have a lot of towers already built that can help the purpose of whatever industry events that may happen, right? And then for FTTT, again, 60% of sites that is used by XL in the whole of Indonesia only is fiber. So we can be hopeful that there could be more higher penetration. And then with the FDI story of Indonesia that is taking place as we speak, right? And a lot of that is happening extra hour. So we can never know if there could be another higher growth -- accelerating growth on the FTT side as well. But what we know right now is FTTH.

Yes. Right. Was there an increase from business customers, Indosat and VA and business activation that kind of thing.

Maybe these are not so much here because digitalization of customers accounts with a lot of banks. I think the most recent one, one of the big banks is B&I just launched new app which is very nice. I think that alleviates a lot when it comes to the need of ATMs [indiscernible]. But for Enterprise segment, I think we're growing. That's why we don't want to limit who we serve, it kind of comes to providing digital infrastructure, Niko.

Okay. My next question is on the CapEx, Some of the CapEx you'll buy asset for 2024. And if you can tell me when you -- how you're going to allocate your estimate.

I think about IDR 6.5 trillion for 2024 CapEx and then more than 50% will go towards non-tower.

Okay. Non-tower. And the other one is tower for the tower relocation, the ones...

Yes, the tower relocations ground leases, everything lapped in into that IDR 6.5 trillion number.

Okay. And maybe one housekeeping question. Your tax expense is much lower in the fourth quarter. Can you help me use some reference rate for next year?

Yes, I have Daniel here from is Chief of Reporting.

For the tax citing, as you can see, our portion of final tax now increased year-by-year, right? So the more our tax expense under final, then it will be closer and closer to the 10% of the tower revenue, right? So that by 2027, maybe full year 2027, that's already reaching. I think by that year is the final year where we can still enjoy the nonfinal,but after that, it will be 100% final tax for tower business. But for the non-tower, that is also something that you can put some calculation because the non-tower still using the non-final regime, right? So that would be still using the corporate income tax. That is something that probably helpful for you to project what kind of tax that we will have. So going forward, we think that this will slowly increase for the final towards the 100% right? And then non-tower, depending on the proportion of the non-power business so compared to final as compared to the total revenue that will still enjoy in the nonfinal tax. I think that's from me.

Henry, I still see your raised hand. You have a following up question?. Okay. [Operator Instructions]. We have several questions as well on the Q&A box. From [indiscernible] can you kind of give a color on the operational performance target for 2024 with the revenue, EBITDA number of towers and tenancy ratio.

Top line should grow by 4% to 6% that range for 2024. And then we gave you some towers. Towers is about 1,000 additions. So far we have garnered so far right now today, that number is as of today. And who knows we can get there more so we can actually get this relocation done with IOH sooner than later. And then for fiber, we mentioned about FTTT, the growth could be high single digit to like low double digits. For FTTH, we think could be achieving 2 million home passes by end of 2024. I think that's -- it's basically a repetition of what we said earlier on for this job [ John pong wun ].

Thank you, pak. There is also the second question from [ John pong wun ]. Why tower leasing revenue in 2023 decreased, while your panels increased.

Yes. The tenancy increase but the revenue decrease is because there was a certain repricing, and then we try to give some value add, but not continue in 4Q. So we saw a bit of a dip on tower revenue, while the number of tenants remaining approximately 54,000 leases. But sometimes you also treat the relationship between us and certain customers on a per name basis. So say on customers has towers with us, but with the opportunity also getting us more business on the other segment. So sometimes, we also treat one segment subsidizing the other because of volume consideration.

Thank you, pak Adam. We have the next question from Apa from [ Maybank ]. What is the IFRS release rate for fiber optic per kilometer basis.

I think you can see in our presentation, the split of revenue for FTTT and then the volume itself but I think you can try and then look it up yourself. For FTTH is a bit more complex because there is a certain formula. There's a [indiscernible] a sub volume of home Connect [indiscernible] despite the client customer achievement, we would still be getting a minimum amount. And then anything above that, there will be a split of revenues between us and the said customers to whom we give the FTTH infrastructure. So I don't have rupia per month, frankly speaking. But hopefully, if you can see the -- if you do the metrics on your own, you can try to estimate by yourself. Yes, because we have the revenue by segment towers, FTTT, FTTH are already there and then the volume itself. So hopefully, that's helpful for you.

Okay. Pak Adam, following up the Apa question. Actually, I do the rough calculation on the FTTH is around IDR 215,000 per month. Is it the standard pak or [indiscernible]

Per month or per year?

It should be IDR 215,000 per month. If I'm not mistaken on my calculation.

Yes, I think that's a bit higher. Maybe just to give you some highlights on the FTTH revenue, we have 2 components, right, where one is the minimum commitment from the [indiscernible] which is certain percentage of the home passes times a certain amount, yes? And then for the -- another component is the Home Connect, right? So when we do a Home Connect for the client, we also receive certain payment. So these 2 components that you mentioned might play together here. So it seems like it is around 200,000. In fact, it is not yet, that amount.

There's a lot of effort from both sides, us and the clients who use our FTTH infrastructure to get that number. The contracts are different from one base to another. So I don't have a single number to give to Etta or Selvi this afternoon, but you can try to gauge from the numbers in revenue as well as operational revenue that we have set forward in the presentation. Just to be sure that you are segregating quarter-by-quarter and then as well as the operational numbers for your calculation.

Thank you, pak. We have another raised hand from [ Erwin Bin Yaya].

Just a quick 1 for us. If you could give us any colors on EBITDA growth for the next few years -- that would be great.

We don't have that forecast because we do a lot of built-to-suit. We do have budgets that we built basically rolling 12 months into the year, like we have just discussed with everyone on this call. Because we do Build-to-suit, I think a lot of the need of infrastructure is driven by the operators and then this is as a result of them getting money from their end customers. So that's why we are very hopeful that there's a good price repair, profitability repair in the whole segment of the as we are a part of this ecosystem.

We have another question on the chat box without a name. First of all is jump in 4Q depreciation, what is the size in the IBR terms. And the second is what is the budget CapEx for 2024? I think pak Adam has already addressed this one. And any color on the EBITDA growth?

The tower -- the depreciation impact from towers for this year 2023 book was about 130 from more than 100,000 yes. So that's -- there was an accelerated depreciation on those sites because of the locations. On EBITDA itself, we are -- I think should be around that number as well, should be unless we see a decrease in EBITDA margins.

Okay. Thank you, pak Adam. There's also another question, follow-up question from Niko. Home Connect, how many percentage is mostly FTTH or also in [indiscernible] fix wireless?

Yes. So mostly FTTH. So Home Connect, at this stage, mostly I think if not all, is FTTH. We don't have yet fix wireless, even though we are talking. Okay. And then the second question about inorganic growth for FTTH. Yes, we see opportunities that have been -- that has emerged in marketing for that kind of business, FTTH. Okay?

Thank you,. We have no questions left, but. Henry, would you like to have another follow-up question, please.

Just one follow-up question for me. Could you touch a little bit on the debt management, I recall you mentioned that this first half, you might have a new bond [indiscernible] the years, how should we expect on the interest expense trends going forward? And how should -- or when should we expect the net debt to EBITDA start to trending lower?

Thank you, Henry. So the market saw an increase from on BI rate side, just last -- second semester 2023. So our cost of funding for 2023 was around 6.1% to 6.3%, even though it ended in December 2023 at 6.1%. And then in 2024, we have budgeted slightly higher, around 6.4% to 6.6%. I mean, I know the market is saying fed rate is going to go down, but we just -- we want to be conservative on that part.

Pak Adam, following up the Niko questions on the inorganic growth. How about on the tower side pak? Is there any acquisition plan in the pipeline or probably you could share with us about the IBST tower sales as Sarana Menara has the input on the binding progress so far.

I think we always look at towers for us to -- this opportunity for us to garnering. I can not name names, but we see opportunities for that to happen. We see probably now several names in the towers as well as fiber available in the market. So I cannot say which one that we will close, so we're still in the process of getting some of the deals done in terms of [indiscernible].

Okay. Thank you, pak Adam. Anyone would like to have another question, you may raise hand. We have no questions so far pak.

Okay. So again, we try to be efficient. We try to have an overlap of different operations on different types of assets as much as we can. As you know, under Sarana Menara Nusantara everything is under one roof, meaning taking head is done by the -- how to make the harmony between different types of business work. We are still in the infrastructure space for not just airports, but also other segments. We are going into green energy generation as well and basically, that's also another infrastructure that we see could be an upside given that Indonesia has just introduced a carbon taxation back in September 2023 even though at the early stage on the 6 sectors -- 6 industries have been basically under scrutiny, under monitoring by the OJK and Stock Exchange. But we -- I think having seen the trend in many parts of the world, I think all sectors will be -- will have to pay attention or be involved in [ urban ] taxation. You also see how the telco, the data market is impacting the way energy is consumed because a lot of data traffic is taking place. So we are hopeful we can add value to this whole infrastructure role that we have in the market. So hopefully, talk to you again. We should be releasing our first quarter results in about 30 days, so talk to you again soon. okay?

Okay. Thank you so much, pak Adam, and thank you, everyone, for joining us in today's call. Have a great day. Okay. Well, let's remask the call today. Thank you, everyone.

Thank you Selvi.