Business Context and Reporting Period
This Form 6-K filing summarizes the 2023 Annual Report of Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom), Indonesia's largest state-owned telecommunications company. The reporting period covers the fiscal year ended December 31, 2023. The filing was signed on March 31, 2024. Telkom operates across mobile, fixed broadband, enterprise, wholesale, and digital services, with a strategic focus on the "Five Bold Moves" transformation initiative, including Fixed Mobile Convergence (FMC) and the establishment of an infrastructure company (InfraCo).
Key Financial Metrics (2023)
| Metric | 2023 Value (Rp Billion) | 2022 Value (Rp Billion) | Change (%) |
|---|---|---|---|
| Total Revenues | 149,216 | 147,306 | +1.3% |
| EBITDA | 77,579 | 78,992 | -1.8% |
| Operating Profit | 44,384 | 39,581 | +12.1% |
| Net Profit (Total) | 32,208 | 27,680 | +16.4% |
| Net Profit (Attributable to Parent) | 24,560 | 20,753 | +18.3% |
| Capital Expenditure (CAPEX) | 32,968 | 34,156 | -3.5% |
| Total Assets | 287,042 | 275,192 | +4.3% |
| Total Liabilities | 130,480 | 125,930 | +3.6% |
Key Ratios: Return on Equity (ROE) was 20.6%; Debt to Equity Ratio was 0.44x; Debt to EBITDA Ratio was 0.88x; Operating Profit Margin improved to 29.7%.
Material Changes vs. Prior Period
- Revenue Growth: Driven by a 5.1% increase in data, internet, and IT services revenue and a 2.7% increase in IndiHome revenue. This offset a significant 32% decline in cellular voice revenue due to the shift to Over-The-Top (OTT) services.
- Profitability: Net profit attributable to the parent company rose 18.3% to Rp24.56 trillion, driven by operating efficiency and a 12.1% increase in operating profit.
- Subscriber Growth: Cellular subscribers increased 1.6% to 159.3 million. Fixed broadband (IndiHome) subscribers grew 9.5% to 10.1 million. Mobile broadband subscribers grew 5.1% to 127.1 million.
- Strategic Integration: On July 1, 2023, Telkom executed the Fixed Mobile Convergence (FMC) initiative, integrating the IndiHome business into Telkomsel. This generated Rp464 billion in synergy value within six months.
- Infrastructure: Telkom completed the migration of 3G Base Transceiver Stations (BTS) to 4G, eliminating 3G infrastructure. 5G BTS count increased to 654 units.
Guidance, Outlook, and Risks
Outlook and Guidance:
- 2024 Revenue: Management expects positive growth in the low to mid-single-digit range, acknowledging increased competition.
- Margins: EBITDA and Net Income margins are projected to increase slightly as the company shifts from legacy to digital businesses.
- CAPEX: Planned capital expenditure for 2024 is estimated at 25%-30% of revenue, focused on digital business infrastructure.
- Dividends: The dividend payout ratio is targeted between 60% and 90%.
Management Commentary: Management emphasizes the "Five Bold Moves" strategy (FMC, InfraCo, Data Center Co, B2B Digital IT Service Co, and DigiCo) to drive sustainable growth. The company is aggressively expanding its data center capacity (targeting 62 MW by 2025) and strengthening its B2B portfolio through partnerships with global cloud providers (AWS, Microsoft, Google).
Risks and Contingencies:
- Competition: Intensifying competition in fixed and mobile broadband, particularly from new entrants and price wars in the low-segment market.
- Regulatory: Changes in regulations regarding spectrum pricing, Universal Service Obligation (USO) charges, and data privacy laws.
- Infrastructure: High investment needs to maintain network quality and expand coverage to remote areas (3T regions).
- Cybersecurity: Increasing threats of cyber-attacks and data theft as digital dependence grows.
Important Facts for Investor Verification
- FMC Integration Impact: Verify the long-term financial impact and synergy realization of the July 2023 integration of IndiHome into Telkomsel.
- Data Center Expansion: Confirm progress on the Hyperscale Data Center in Batam and the consolidation of data center assets under NeutraDC.
- Debt Profile: Review the maturity schedule of outstanding bonds (Series B, C, and D of the 2015 Shelf Registered Bonds) and the impact of floating interest rates on finance costs.
- Regulatory Compliance: Monitor the implementation of Presidential Regulation No. 17 of 2023 regarding the acceleration of digital transformation in government procurement, for which Telkom has been assigned a specific role.
- Dividend Policy: Verify the final dividend payout ratio for 2023 performance at the upcoming Annual General Meeting of Shareholders (AGMS).