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T XL Axiata, the country'€™s second-largest telecommunications operator, has reported additional losses during the first nine months of this year, driven mainly by rising costs and ongoing currency volatility.

The publicly listed company recorded Rp 901.2 billion (US$75.8 million) in net losses during the January to September period after losing Rp 482.5 billion in the first half of this year.

Total losses during the first nine -month period represent a steep fall from the Rp 917 billion in net profits booked over the same period last year, according to a financial report published by the firm on
Wednesday.

The company registered a 10.8 percent increase in total revenues, up to Rp 17.5 trillion from Rp 15.8 trillion. The surging revenues, however, could not compensate for the firm'€™s ballooning costs and expenses.

'€œOur profits were very much affected by currency volatility, which was out of our control,'€ said XL CEO Hasnul Suhaimi.

The continuing depreciation of the rupiah against the US dollar in the third quarter of this year increased the firm'€™s foreign exchange (forex) losses to Rp 935.5 billion from Rp 419.4 billion.

XL'€™s total expenses in the Jan.-Sept. period hit Rp 17.4 trillion, a 20 percent increase year-on-year from Rp 14.5 trillion, with infrastructure expenses reaching Rp 6.3 trillion.

In addition, because of loans taken out to acquire Axis Telekom Indonesia, the firm incurred interest costs of Rp 1.3 trillion, an 83 percent increase from Rp 708.5 billion.

As of September, XL'€™s current liabilities stood at Rp 15.8 trillion, Rp 4.5 trillion of which was debt.

The firm'€™s non-current liabilities, meanwhile, rose by 64.6 percent, to Rp 28.07 trillion from Rp 17.05 year-on-year.

Hasnul said that his firm had hedged 63 percent of its total debts to banks to avoid further forex losses.

He added that his firm would use proceeds of Rp 5.6 trillion acquired by the end of the year through the sale of towers to PT Solusi Tunas Pratama (SUPR) to pay down debt, particularly those with high interest rates.

Arandi Nugraha, an analyst with Batavia Prosperindo Sekuritas, said that the debt reduction would significantly affect XL'€™s financial performance, but the benefits would not be felt until next year.

XL would enhance its data and Internet services for customers to boost revenues, Hasnul said.

'€œWe will spend around Rp 7 trillion for capital expenditures next year, 90 percent of which will be allocated for IT, network and fiber optic expansion,'€ he said, adding both external loans and internal cash could be used as funding sources.

XL, which unveiled a new logo on Tuesday, has noted that 51 percent of its 62.9 million customers were data users.

The firm'€™s revenue from voice and SMS services during the first nine months of this year grew by just 3.3 percent year-on-year to Rp 9.4 trillion.

XL'€™s revenue from its data and value-added services (VAS), meanwhile, surged by 43.8 percent to Rp 4.6 trillion from Rp 3.2 trillion year-on-year.

XL'€™s shares, traded under the code EXCL, fell by 4.78 percent to Rp 5,475 apiece on Wednesday'€™s close, down from Rp 5,750.