Business Context and Reporting Period
Company: Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom Indonesia)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2024 (Unaudited)
Filing Date: October 30, 2024
Telkom Indonesia is a state-owned public limited liability company headquartered in Bandung, Indonesia. The Group operates through four primary reportable segments: Mobile, Consumer, Enterprise, and Wholesale & International Business (WIB). The financial statements are prepared in accordance with Indonesian Financial Accounting Standards (PSAK).
Key Financial Metrics (Nine Months Ended Sept 30, 2024)
| Metric | 2024 (Billions IDR) | 2023 (Billions IDR) |
|---|---|---|
| Total Revenues | 112,219 | 111,238 |
| Operating Profit | 32,450 | 34,982 |
| Profit Before Tax | 29,617 | 32,282 |
| Net Profit (Consolidated) | 23,021 | 25,389 |
| Net Profit (Parent Company) | 17,675 | 19,499 |
| Operating Cash Flow | 45,955 | 42,777 |
| Capital Expenditures | (17,483) | (22,084) |
| Cash & Equivalents (End of Period) | 24,540 | 25,905 |
| Total Debt (Interest-bearing) | 73,139 | 68,124 |
| Net Debt-to-Equity Ratio | 35.81% | 28.82% |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased by 0.9% to Rp112.2 trillion, driven primarily by the Mobile segment (Cellular data and internet revenue rose to Rp54.5 trillion).
- Profit Decline: Operating profit decreased by 7.2% to Rp32.5 trillion, and Net Profit attributable to the parent company declined by 9.4% to Rp17.7 trillion. This was largely due to increased personnel expenses (including an Rp1.2 trillion early retirement program) and higher unrealized losses on investments.
- Investment Losses: Unrealized loss on changes in fair value of investments increased significantly to Rp476 billion (from Rp182 billion in 2023), primarily driven by the valuation of Telkomsel's investment in PT GoTo Gojek Tokopedia Tbk.
- Capital Expenditure Reduction: Capex decreased by 20.8% to Rp17.5 trillion, reflecting a strategic reduction in spending compared to the prior year.
- Dividend Distribution: The Company paid a cash dividend of Rp17.7 billion (Rp178.50 per share) for the 2023 fiscal year in May 2024.
Outlook, Risks, and Unusual Items
- Early Retirement Program: Personnel expenses included Rp1.2 trillion related to an early retirement program, a non-recurring cost impacting the current period's profitability.
- Tax Assessments: The Company and its subsidiary Telkomsel are subject to ongoing tax audits and assessments. In 2024, the Company received tax assessments totaling approximately Rp8.8 billion (including fines) which were charged to the profit and loss report. Telkomsel received an assessment of Rp6 billion for the 2019 fiscal year.
- Foreign Exchange Risk: The Group has a net exposure to the US Dollar and Japanese Yen. A 1% strengthening of the US Dollar against the Rupiah would decrease equity and profit by approximately Rp133 billion.
- Commitments: As of September 30, 2024, the Group has committed capital expenditures of approximately Rp8.2 trillion under contractual arrangements.
- Subsequent Events: In late October 2024, Telkomsel repaid loans totaling Rp4.5 trillion to state-owned banks and simultaneously received new loans totaling Rp2.5 trillion.
Key Facts for Investor Verification
- Investment Valuation: Verify the fair value assessment of the investment in PT GoTo Gojek Tokopedia Tbk, which contributed significantly to the unrealized loss of Rp474 billion.
- Debt Covenants: Confirm continued compliance with debt covenants, specifically the debt-to-equity ratio (currently 35.81%) and debt service coverage ratios required by lenders.
- Tax Liabilities: Monitor the status of ongoing tax audits for the 2019, 2020, 2021, and 2023 fiscal years for both the parent company and Telkomsel.
- Segment Performance: Review the Mobile segment's ability to sustain revenue growth amidst competitive pressures, as it accounts for the majority of external revenue (Rp62.9 trillion).
- Non-Controlling Interests: Note that a significant portion of profit (Rp5.3 trillion) is attributable to non-controlling interests, primarily from Telkomsel (30.1% ownership) and Mitratel (28.16% ownership).