BANKRUPTCY RISK AND FINANCIAL PERFORMANCE ANALYSIS (CASE STUDY OF INDOSAT OOREDOO PERIOD 2014 - 2018)

• Main Author: Ibnu Masud, Faisal
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/47196
• Institution: Institut Teknologi Bandung

Around 2000 telecommunications operators gain high profit margin from voice and SMS (short messaging service). Currently, since VOIP (Voice Over IP) technology, followed by consumer shift to apps like WhatsApp, Facebook Messenger, Skype for communication purpose, then telecommunications revenue related to their core service become evaporating. On the other hand telecommunications operators must incur large CAPEX cost. Indosat Ooredoo is one of the telecommunications operators in Indonesia whose financial performance has deteriorated since 2013. This condition is indicated by the frequent losses of Indosat Ooredoo and the debt burden that always increases every year. Revenue growth from data cannot cover loss of revenue from voice and SMS services. The cause is the price war between Indosat Ooredoo and XL Axiata. On the infrastructure side, the growth of Indosat's BTS is still far behind Telkom Indonesia and XL Axiata. In 2018 the number of Indosat Ooredoo customers dropped dramatically by 47.37% due to the government regulation on SIM which must be registered. This shows that Indosat Ooredoo customers are not loyal customers. Then seen from the revenue per customer, Indosat Ooredoo occupies the lowest position. To find out the future possibility of Indosat Ooredoo to going bankrupt, Altman Z Score with 4 variables for services companies will be used. The comparison compares Altman Z Score value between telecommunications companies in Indonesia, such as Telkom, XL Axiata, and Smartfren Telecom. Comparison of financial performance with similar companies is done using SOE Ministerial Decree No. Kep-100 / MBU / 2002 to find out what improvements can be made. Dupont analysis is carried out to provide recommendations in improving Indosat Ooredoo's financial performance. Based on the analysis using the Altman Z-Score, it can be seen that Indosat Ooredoo in the last 5 years (2014 - 2018) is in distress zone as well as other telecommunications operators, except Telkom Indonesia. In the calculation of financial performance using the decree of Ministry of State-Owned Enterprise (SEO) No Kep-100/MBU/2002, it is known that Telkom Indonesia having the best financial performance and then followed by Indosat Ooredoo. To improve its financial performance, some steps can be taken by Indosat Ooredoo such as: conducting a horizontal merger with XL Axiata, making strategic plans and implementing diversification of the company to increase revenue growth and reduce expenditure.