by Robert Yota
Publicly listed state telecommunication company PT Telkom Indonesia (TLKM) managed to record positive growth in revenue at the end of last year, although suffering a slight drop in net profits.
TLKM recorded revenue of Rp 135.5 trillion at the end of 2019, up 3.6% (YoY) from Rp 130.7 trillion in 2018. According to the newly-published 2019 annual report, Telkom’s income from cellular data (Telkomsel), internet (IndiHome), and IT services contributed the largest to the company’s 2019 revenues, combining to Rp 72.78 trillion of total revenues last year as opposed to Rp 65.55 trillion in 2018.
Furthermore, the second-biggest revenue contributor came from the phone call segment with Rp 27.97 trillion last year, which is divided into mobile phone calls (Rp 25.09 trillion) and immobile phone/telephone calls (Rp 2.88 trillion). The company’s EBITDA has grown by 9.5% from Rp 59.18 trillion in 2018 to Rp 64.83 trillion last year, mainly driven by the solid growths from Telkomsel and IndiHome.
Meanwhile, the company did experience a 0.6% net profit decline from Rp 18.78 trillion in 2018 as opposed to Rp 18.66 trillion at the end of last year. In 2019 4Q, Telkomsel recorded a one-off loss totaling to Rp 1.2 trillion from the lower fair value of the company’s subsidiary, Tiphone. If not for the one-time loss, TLKM would have earned Rp 19.8 trillion net profit last year, a 5.4% growth from 2018.
According to Danareksa Sekuritas analyst Niko Margaronis, he expects TLKM to revise its 2020 growth targets mentioned at the start of this year due to the ongoing COVID-19 outbreak. “The high data traffic recorded since the beginning of the pandemic, which peaked during Idul Fitri with many families video-conferencing each other, has positively affected the performances of Telkomsel and Indihome. However, we still expect the guidance to be revised down to low-mid digit growth in Telkom’s next disclosure given the impact from COVID-19, particularly on TLKM’s enterprise segment,” stated Niko in a report.
Telkomsel has stated that, given the higher data demand, it plans to accelerate the disbursements of capital expenditures (capex) to maintain network performance to accommodate higher data traffic. “Another key takeaway is the group’s capex spending last year that managed to reach its annual target of 27% capex/sales proportion. The timeliness of capex spending by TLKM will sustain Telkomsel’s market shares amid heightened competition, and also prop up growth for IndiHome as it penetrates lower-end market segments,” Niko said.