Business Context and Reporting Period
Company: Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (TELKOM)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2009 (Q3 2009)
Filing Date: October 30, 2009
Context: TELKOM is Indonesia's largest full-service network provider. The filing includes unaudited consolidated financial statements prepared in accordance with Indonesian GAAP. The company operates fixed-line, cellular (via subsidiary Telkomsel), data, internet, and interconnection services.
Key Financial Metrics
| Metric (Nine Months Ended Sept 30) | 2008 (Rp Billion) | 2009 (Rp Billion) | % Change |
|---|---|---|---|
| Total Assets | 86,029 | 95,216 | 10.7% |
| Total Liabilities | 44,606 | 47,943 | 7.5% |
| Total Equity | 32,593 | 37,507 | 15.1% |
| Operating Revenue | 44,650 | 47,114 | 5.5% |
| Operating Expense | 27,471 | 29,160 | 6.1% |
| Operating Income | 17,179 | 17,954 | 4.5% |
| Net Income | 8,920 | 9,300 | 4.3% |
| EBITDA | 25,980 | 28,136 | 8.3% |
| EBITDA Margin | 58.2% | 59.7% | +1.5 pp |
| Cash and Cash Equivalents | 7,545 | 7,212 | -4.4% |
Material Changes vs. Prior Period
- Revenue Mix Shift: Total revenue grew 5.5%, driven primarily by a 15.1% increase in Cellular revenue (Rp2,760 billion) and a 14.1% increase in Data, Internet, and IT Services (Rp1,534 billion). Conversely, Fixed Line revenue declined 14.5% and Interconnection revenue fell 13.5%.
- Expense Dynamics: Operating expenses rose 6.1% (Rp1,689 billion). This was largely due to higher depreciation (up Rp1,320 billion) and maintenance/operating costs (up Rp1,096 billion) linked to new productive assets. Personnel expenses decreased by Rp749 billion.
- Subscriber Growth:
- Wireless subscribers surged 62.7% to 14.886 million.
- Total Fixed Lines increased 33.0% to 23.589 million.
- Cellular customer base grew 31.9% to 79.774 million, with simPATI subscribers up 49.3%.
- ADSL (Speedy) subscribers increased 65.2% to 979,000.
- Usage and ARPU: Cellular Minutes of Use (MOU) jumped 71.4% to 100.8 billion minutes. However, Cellular ARPU declined 20.0% from Rp60,000 to Rp48,000 per month.
- Balance Sheet: Total assets increased 10.7% to Rp95.2 trillion. Long-term bank loans increased significantly from Rp6.44 trillion to Rp11.68 trillion.
Guidance, Outlook, and Management Commentary
- Management Strategy: President Director Rinaldi Firmansyah emphasized a strategy to "strengthen the core and grow new wave," citing actions taken to maintain market position amid a competitive climate.
- Financial Discipline: Director of Finance Sudiro Asno noted that well-managed expenses and capital expenditure (capex) contributed to achieving expected operational and financial results.
- Strategic Acquisition: On August 18, 2009, subsidiary PT Dayamitra Telekomunikasi entered into an agreement to acquire an 80% interest in PT Solusindo Kreasi Pratama (Solusindo), a tower provider for telecommunication operators.
- Outlook: The filing does not provide specific numerical guidance for the full year 2009 or future periods beyond the commentary on maintaining strong performance.
Investor Verification Checklist
- ARPU Sustainability: Verify the impact of the 20% decline in Cellular ARPU on future profitability despite the 71.4% increase in usage minutes.
- Debt Structure: Review the significant increase in long-term bank loans (from Rp6.44T to Rp11.68T) and assess interest coverage ratios given the rise in interest expense.
- Fixed-Line Decline: Analyze the 14.5% drop in Fixed Line revenue to determine if this trend is stabilizing or accelerating.
- Acquisition Integration: Monitor the progress and financial impact of the Solusindo tower acquisition.
- Currency Exposure: Note the significant gain on foreign exchange (Rp774 billion in 2009 vs. a loss of Rp63 billion in 2008) and assess the volatility risk for future periods.