Business Context and Reporting Period
Company: Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom Indonesia)
Reporting Period: Nine months ended September 30, 2021 (Unaudited)
Filing Date: November 24, 2021
Business Overview: Telkom Indonesia is a state-owned public limited liability company providing telecommunication networks and services, including mobile, consumer (Indihome), enterprise, and wholesale/international services. The Group operates primarily in Indonesia with significant international subsidiaries.
Key Financial Metrics (Nine Months Ended Sept 30, 2021)
| Metric | 2021 (Rp Billion) | 2020 (Rp Billion) |
|---|---|---|
| Total Revenues | 106,043 | 99,941 |
| Operating Profit | 36,301 | 33,011 |
| Profit Before Tax | 33,260 | 29,754 |
| Profit for the Period | 25,663 | 22,951 |
| Net Income (Parent Company) | 18,872 | 16,679 |
| Basic EPS (Rp) | 190.51 | 168.37 |
| Net Cash from Operating Activities | 50,972 | 47,450 |
| Net Cash Used in Investing Activities | (26,792) | (19,290) |
| Net Cash Used in Financing Activities | (27,342) | (29,190) |
| Cash and Cash Equivalents (End of Period) | 17,491 | 17,420 |
| Total Assets | 246,500 | 246,943 |
| Total Liabilities | 127,687 | 126,054 |
| Total Equity | 118,813 | 120,889 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased by 6.1% to Rp106.0 trillion, driven by growth in mobile data and consumer services.
- Profitability: Operating profit rose 10.0% to Rp36.3 trillion. Net profit for the period increased 11.8% to Rp25.7 trillion.
- Investing Activity: Net cash used in investing activities increased significantly (39%) to Rp26.8 trillion, primarily due to higher capital expenditures (Rp20.2 trillion) and increased purchases of long-term financial instruments (Rp5.7 trillion), including a strategic investment in PT Aplikasi Karya Anak Bangsa (Gojek).
- Dividends: Cash dividends paid to stockholders totaled Rp16.6 trillion, and dividends to non-controlling interests totaled Rp11.1 trillion.
- Debt Profile: Total interest-bearing debt increased to Rp68.5 trillion. The net debt-to-equity ratio rose to 48.71% from 43.77%.
Guidance, Outlook, Risks, and Unusual Items
- Strategic Investments: The Group strengthened its digital transformation by converting convertible bonds into equity in PT Aplikasi Karya Anak Bangsa (Gojek) and executing call options, resulting in a recognized gain of approximately Rp350 billion.
- Subsidiary IPO: PT Dayamitra Telekomunikasi (Mitratel) completed its IPO process in November 2021 (subsequent event), reducing the Company's ownership to 71.87%.
- Taxation Risks: The Company is involved in ongoing tax disputes regarding fiscal years 2012, 2015, and 2018. While many disputes have been resolved in the Company's favor or settled, some judicial reviews remain pending. The Company applies a reduced corporate tax rate of 19% (vs. 22% for subsidiaries) due to specific government incentives.
- Financial Covenants: The Group generally complies with debt covenants (Debt-to-Equity, EBITDA/Interest, Debt Service Coverage). However, waivers were obtained in late 2020/early 2021 for certain subsidiaries (Sigma, Telkom Infra, PINS) regarding non-fulfillment of financial ratios.
- Foreign Exchange Risk: The Group has a net liability exposure to the Japanese Yen (approx. Rp2.7 trillion) and a net asset exposure to the US Dollar (approx. Rp0.9 trillion). A 1% strengthening of the USD would decrease equity/profit by Rp128 billion.
Key Facts for Investor Verification
- Dividend Payouts: Verify the sustainability of high dividend payouts (approx. Rp27.8 trillion total in 9 months) against free cash flow generation.
- Capital Expenditure: Confirm the ROI on the significant increase in CapEx (Rp20.2 trillion), particularly regarding 5G and fiber network expansion.
- Tax Disputes: Monitor the status of remaining tax disputes (fiscal years 2012, 2015, 2018) and potential impact on future tax provisions.
- Debt Covenants: Review the specific financial ratios for subsidiaries that previously required waivers to ensure continued compliance.
- Investment Valuation: Assess the fair value and strategic impact of the increased equity stake in Gojek (PT Aplikasi Karya Anak Bangsa).