Business Context and Reporting Period
Company: Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom Indonesia)
Filing Type: Form 6-K (Unaudited Consolidated Financial Statements)
Reporting Period: Six months ended June 30, 2024
Filing Date: July 29, 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 (SAK).
Key Financial Metrics (Six Months Ended June 30, 2024)
| Metric | 2024 (Rp Billion) | 2023 (Rp Billion) |
|---|---|---|
| Total Revenues | 75,292 | 73,478 |
| Operating Profit | 21,635 | 23,019 |
| Profit Before Income Tax | 19,923 | 21,302 |
| Net Profit for the Period | 15,424 | 16,821 |
| Net Profit Attributable to Parent | 11,761 | 12,756 |
| Basic EPS (Rp) | 118.72 | 128.77 |
| Net Cash from Operating Activities | 29,687 | 25,620 |
| Net Cash Used in Investing Activities | (14,206) | (17,669) |
| Net Cash Used in Financing Activities | (19,277) | 798 |
| Cash and Cash Equivalents (End of Period) | 25,458 | 40,521 |
| Total Assets | 285,992 | 287,042 |
| Total Liabilities | 138,718 | 130,480 |
| Total Equity | 147,274 | 156,562 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased by 2.5% to Rp75.29 trillion, driven primarily by growth in the Mobile segment (Cellular data and internet revenue rose to Rp36.69 trillion) and WIB segment.
- Profit Decline: Operating profit decreased by 6.0% to Rp21.64 trillion, and Net Profit attributable to the parent company declined by 7.8% to Rp11.76 trillion. This was largely due to a significant increase in personnel expenses (up 20.9% to Rp9.49 trillion) driven by an early retirement program expense of Rp1.24 trillion, and an unrealized loss on investments of Rp857 billion (compared to a gain of Rp412 billion in 2023).
- Investment Losses: The Group recorded an unrealized loss of Rp854 billion related to Telkomsel's investment in PT GoTo Gojek Tokopedia Tbk (GOTO).
- Cash Flow: Operating cash flow improved by 15.9% to Rp29.69 trillion. However, financing cash flow turned negative (net outflow of Rp19.28 trillion) primarily due to the payment of cash dividends totaling Rp24.37 trillion (Rp17.68 trillion to shareholders and Rp6.68 trillion to non-controlling interests).
- Debt Levels: Total interest-bearing debt increased to Rp79.12 trillion from Rp68.12 trillion, resulting in a Net Debt-to-Equity ratio increase from 28.82% to 41.22%.
Guidance, Outlook, and Risks
- Dividend Policy: The Company paid a cash dividend of Rp17.68 trillion (Rp178.50 per share) for the 2023 fiscal year in May 2024.
- Capital Expenditures: Committed capital expenditures as of June 30, 2024, total Rp10.20 trillion plus US$232 million, focusing on network development and digital transformation.
- Key Risks:
- Foreign Exchange: The Group has a net exposure of approximately US$716 million and a net liability in Japanese Yen. A 1% strengthening of the USD against the Rupiah would decrease equity/profit by Rp117 billion.
- Interest Rate: A 25 basis point increase in interest rates on variable borrowings would decrease equity/profit by Rp74 billion.
- Taxation: Ongoing tax audits for fiscal years 2019, 2020, and 2021 remain in process. Significant tax disputes regarding Telkomsel's 2014, 2015, and 2018 assessments are in various stages of appeal or judicial review.
- Investment Volatility: Significant exposure to fair value changes in long-term investments, particularly in the technology sector (e.g., GOTO).
- Subsequent Events: In July 2024, Mitratel issued sustainable bonds/sukuk of Rp250 billion. Telkomsel repaid outstanding loans totaling Rp1.5 trillion to MUFG Bank, BCA, and Bank Mandiri.
Investor Verification Checklist
- Investment Valuation: Verify the fair value assessment of the GOTO investment (Rp50/share) and the impact of the Rp854 billion unrealized loss on future earnings.
- Personnel Costs: Confirm the one-time nature of the Rp1.24 trillion early retirement program expense and its impact on future operating margins.
- Debt Covenants: Review compliance with debt-to-equity and debt service coverage ratios, noting the increase in net debt-to-equity to 41.22%.
- Tax Contingencies: Monitor the status of ongoing tax audits and judicial reviews, particularly the Telkomsel CIT appeals totaling hundreds of billions of Rupiah.
- Dividend Sustainability: Assess the ability to maintain dividend payouts given the significant cash outflow in the first half of 2024 and increased capital expenditure commitments.