PT MNC Investama Tbk : “BHIT”) Financial Release and Business Updates 9M2020

PT MNC INVESTAMA Tbk

(IDX Ticker Symbol : BHIT)

The Leading Investment Company in Indonesia

PT MNC Investama Tbk ("BHIT") Financial Release and Business Updates

Jakarta, Indonesia - December 3, 2020

BHIT 9M 2020 FINANCIAL RESULT

PT MNC Investama Tbk ("BHIT" or "The Company") posted its unaudited financial results for the 9M2020, with consolidated net revenue of Rp10,818 billion. Even though the number is lower compared to the same period last year, The Company is gaining momentum as this quarter result came up 4.1% higher than last quarter, marking the rebound after economic slump in second quarter.

The highest contributor of BHIT's revenues came from the media sector, with a contribution of Rp8,967 billion, which represents 82.9% of The Company's total consolidated revenues. The digital advertising saw a 34.4% increase to Rp676 billion, while pay TV and broadband increased by 6.3% to Rp2,686 billion. Meanwhile the net revenue from the financial services sector was recorded at Rp1,737 billion, which equals to 16.1% of total revenues, while the remaining 1.0% of revenue contribution came from other investments. The Company recorded an EBITDA margin of 36%, amounting Rp3,843 billion in 9M2020, with net profit posted at Rp822 billion.

UPDATES ON USD231 MILLION SENIOR SECURED NOTES

On November 5, 2020, The Noteholders of USD231 million Notes have voted in favor of the exchange offer proposed by The Company. Noteholders have the option to exchange the Notes for:

1. New shares in The Company at an exchange rate of 8,267,052 shares per USD100,000 in principal amount of the Notes (equivalent to conversion price of IDR173 per share using an IDR:USD exchange rate of IDR14,302); or
2. New notes issued by The Company at an exchange rate of USD100,000 in principal amount of new notes for USD100,000 in principal amount of the Notes. The new notes offer a 1% p.a. fixed coupon along with additional variable coupon of cash dividend income received by the Company from PT Global Mediacom Tbk and PT MNC Kapital Indonesia Tbk. The new notes will have a five year tenor.

The Company has submitted sanction application to the Singapore court on November 10, 2020.

Based on the earlier discussion with the Noteholders, The Company had received confirmation that at least 65% of the Noteholders will choose to convert it into new shares.

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BHIT's successful take on the bond is expected to give positive impacts on The Company's financial performance. BHIT's standalone debt will drop from USD231 million to USD81 million, representing a significant 64.5% decrease. Meanwhile, standalone equity will rise from IDR12 trillion to IDR14 trillion, an increase of 18.1%. The two options are projected to strengthen the balance sheet, capital structure as well as profit and loss, ultimately benefiting shareholders.

Chart 1: Percentage of 1H2020 BHIT's standalone balance sheet account assuming 65% debt to equity conversion - debt dropped from 20.8% to 7.4%, while equity portion increased from 74.4% to 87.8%

Current balance sheet	After exchange offer
proportion
		7.4%
20.8%	4.8%
4.8%

74.4%

87.8%

Notes

Other liabilities

Equity

Notes

Other liabilities

Equity

Chart 2: Notes coupon expense assuming 35% remaining notes with 1% coupon rate

297

-96.1%

12

Before Conversion

After Conversion

*In billion IDR

UPDATES ON BUYBACK

Based on the disclosure of information to shareholders published on November 6, 2020, The Company stated its intention to buy some of the shares back from the market to minimize the impact of market fluctuations so that the share price can better reflect the performance. Until

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end of November, The Company already bought back 1,173 million shares, spent around Rp106 billion for the program. The buyback period will end on February 2, 2021.

UPDATES ON OPERATIONAL SUBSIDIARIES

Furthermore, below is an overview of BHIT's strategic investments that affect its financial performance:

MEDIA - PT Media Nusantara Citra Tbk (ticker: "MNCN")

• Financials
  MNCN has once again outperformed in the industry by recording only a slight decrease in net revenue of 1% YoY in 3Q2020, posted Rp1,995 billion from Rp2,019 billion in the previous year period. While, net revenue in 9M2020 was recorded at Rp5,962 billion, representing a decrease of 5% YoY from Rp6,271 billion.
  Advertising revenue for 3Q2020 booked a decrease of 5% YoY to Rp1,909 billion from the previous year at Rp2,003 billion. Although non-digital revenue is still down by 10% YoY from Rp1,825 billion in 3Q2019 to Rp1,642 billion in 3Q2020, this provides a convincing indication that advertising spending in Indonesia has recovered well, as MNCN's non- digital revenue declined in 2Q2020 by 24%. In 9M2020, advertising revenue was decreased by 8% YoY to Rp5,525 billion from Rp6,036 billion, with the breakdown: (i) Non- digital ads decreased by 12% YoY to Rp4,849 billion, and (ii) Digital ads continued to increase significantly by 34% to Rp676 billion in 9M2020 from Rp503 billion in the same corresponding period last year.
  In 9M2020, EBITDA declined by 7% to Rp2,591 billion from Rp2,798 billion last year, representing an EBITDA margin of 43%. In 9M2020, net income was decreased by 18% YoY to Rp1,449 billion from Rp1,776 billion in the same period last year. Excluding non-cash forex adjustment, net income was booked at Rp1,542 billion from Rp1,712 billion in the same prior-year period, representing a 10% YoY decrease with 26% net income margin.
  Looking ahead into 4Q2020, MNCN expects advertising revenue to further increase nearing pre-pandemic level and sets to capitalize on these through the exceptional performance that was set by MNCN's FTA in November.
• Business Updates
  The 4 FTAs, collectively has reached an all-time high on aggregate primetime audience share on November 25, 2020 with 50.1%. Moreover, MNCN also produced the #1 rated drama series, "Ikatan Cinta", which generates an all-time high for any drama series ever broadcasted on TV with a rating of 10.4%. Lastly, MNCN is also expecting its highly awaited talent search program, Indonesian Idol, to achieve the highest revenue

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achievement to date since its first installment in 2004.

On the digital side, RCTI+ monthly active user (MAU) has reached 13 million, with a target of 20 million MAU by the end of this year is well within the reach as rapid weekly growth since the introduction of the 2 new content categories (UGC entertainment & e-sports talent search and online games aggregator) show encouraging signs. MNCN's social media monetization on Youtube, Facebook, and Tiktok also contributes a fair share, as by end of October 2020, those social media platforms have amassed more than 168 million subscribers/followers, which are the biggest views generator with an average 1.5 - 2 billion views every month. Furthermore, the 3 news portals, namely okezone.com, sindonews.com, and iNews.id also generate excellent traction with more than 20 million daily unique visitors.

MEDIA - PT MNC Vision Networks Tbk ("MVN", ticker: IPTV)

• Financials
  MVN posted a consolidated revenue of Rp2,686 billion in 9M2020, an increase of 6% YoY from the previous year at Rp2,527 billion. Satellite services revenue, which consists of IPTV's two DTH units, MNC Vision (post-paid) and K-Vision(pre-paid), went up by 5% YoY in 9M2020 to Rp1,829 billion compared to Rp1,749 billion in 9M2019. While the digital, IPTV, and broadband services revenue grew significantly from Rp669.1 billion in 9M2019 to Rp766.2 billion in 9M2020, represents a 15% YoY growth.
  In 9M2020, EBITDA grew substantially by 10% YoY from Rp1,097 billion to Rp1,203 billion, with EBITDA margin of 45% for this period compared to 43% in 9M2019. While net income increased 51% YoY in 9M2020, securing Rp236.1 billion in net profit compared to Rp156.8 billion in the previous year, represents a 9% net profit margin as opposed to 6% in the same prior-year period.
  On the balance sheet, MVN successfully decreased its liabilities by 27% YoY to Rp3,401 billion from Rp4,634 billion in 9M2019. The Company intends to further decrease its liabilities in 4Q2020 and beyond to achieve a higher margin.
• Business Updates
  Subscribers' acquisition for K-Vision has grown rapidly on a monthly basis since the acquisition back in August last year. Currently, the pre-paid DTH unit has amassed more than 4.4 million subscribers as of October 2020. A number of upselling strategies have been planned for K-Vision to obtain recurring revenue through top-up voucher sales. Various initiatives such as on screen QRIS transaction and dedicated K-Visionself-care page on Vision+ to perform content package upgrade will soon be introduced to K-Vision's subscribers. Projected top-up voucher sales from those 2 features is expected to be

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