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01/10 18:47
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: modest revenue growth, but declining EBITDA and operating income due to increased expenses. The Q&A highlights competitive pressures and unclear management responses, especially on synergy and monetization strategies, which are concerning. The lack of shareholder return plans and no new partnerships or strong guidance further contribute to a neutral sentiment. Despite some growth in digital and fixed broadband, the overall financial health remains challenged, resulting in an anticipated neutral stock price movement.
Revenue IDR 112.2 trillion, up 0.9% year-on-year. Growth driven by continued efforts in promoting Data and Internet Services revenue amid the decline of legacy business.
EBITDA IDR 56.6 trillion, down 4.1% year-on-year. Decrease attributed to investment in talent rejuvenation via Early Retirement Program, leading to a 12.7% increase in personnel expenses.
Normalized EBITDA IDR 57.8 trillion, down 2.1% year-on-year. The decline reflects the impact of the Early Retirement Program costs.
Operating Net Income IDR 18.6 trillion, down 5.1% year-on-year. Decline after adjusting for mark-to-market effects from GOTO, ERP costs, and one-off asset unlocking at Telkomsel.
CapEx IDR 17.5 trillion, with a CapEx to revenue ratio of 15.6%. The spending is primarily for connectivity and digital platform services, with plans to increase CapEx spending to 22% to 24% by year-end.
Total Liabilities IDR 130.7 trillion, relatively flat year-on-year.
Net Debt-to-EBITDA 0.6 times, indicating a healthy gearing ratio.
Telkomsel Revenue Growth 16.4% year-on-year growth. This growth is attributed to the integration of IndiHome B2C business as part of the FMC initiative.
Telkomsel Revenue Decline (Q3 2024) 2.1% decline due to low seasonality and weakness in purchasing power.
Digital Business Growth 2.5% year-on-year growth, supported by a healthy subscriber base and improved usage patterns.
Fixed Broadband Business Growth 200.6% year-on-year increase, driven by the integration of IndiHome and the addition of 682,000 new customers.
Mitratel Revenue IDR 6.82 trillion, up 8.7% year-on-year and 5.5% quarter-on-quarter, with EBITDA margins improved to 83.2%.
Data Payload Growth: Data Payload recorded growth of plus 12.4% year-on-year for nine months of 2024, indicating stickiness and ongoing shift from legacy business.
Fixed Broadband Growth: Fixed broadband business continues showing solid growth, marked by a plus 200.6% increase year-on-year as we integrated IndiHome to Telkomsel in the third quarter.
Market Positioning: Telecom Group remains committed in repairing the market structure by refraining from engaging in price war, focusing on sustainable revenue generation.
B2C Business Growth: During nine months of 2024, Telkomsel posted a strong 16.4% year-on-year growth, attributed to the integration of IndiHome B2C business.
CapEx Efficiency: The rate of CapEx purchase for devices and networks has improved due to Group Procurement initiative, enhancing market segmentation.
Operational Day-1 for InfraCo: Operational Day-1 for PT Telkom Infrastruktur Indonesia confirmed on August 1, 2024, enabling efficient asset deployment.
5 Bold Moves Strategy: The Corporate Transformation group ensures all business processes achieve efficient results with no duplication processes.
Partnership Exploration: Exploring strategic partners to unlock value in data center business, aiming to conclude by early 2025.
Economic Factors: The Indonesian economy is experiencing deflation, which is affecting consumer spending patterns, particularly among the mass market and middle-income segments. This has led to a cautious approach in credit spending.
Competitive Pressures: The telecom sector is facing heightened competition, although there are signs of stabilization in the competitive landscape. The company is committed to avoiding price wars to ensure sustainable revenue generation.
Regulatory Issues: The recent inauguration of President Prabowo and the formation of his cabinet may influence purchasing power through social welfare programs, which could impact the company's market position.
Supply Chain Challenges: The company is focusing on improving procurement processes to enhance CapEx efficiency, indicating potential challenges in managing costs and supply chain dynamics.
Operational Risks: The company is undergoing a transformation strategy that requires careful execution in a soft purchasing power environment, which poses risks to maintaining market leadership.
Investment Risks: The increase in personal expenses due to the Early Retirement Program has impacted EBITDA, highlighting risks associated with talent management and operational costs.
5 Bold Moves Strategy: The company is committed to executing transformation strategies to future-proof Telekom Group leadership, focusing on efficient business processes and avoiding duplication.
Corporate Transformation Group: Ensures all business processes achieve efficient results, improving CapEx purchase rates and enhancing customer experience.
B2B Business Growth: Continues to create long-term sustainable growth in digital connectivity supported by platform expansions with Data Center and Cloud.
InfraCo Initiative: Operational Day-1 for PT Telkom Infrastruktur Indonesia confirmed on August 1, 2024, aimed at improving asset deployment and CapEx efficiency.
Partnership Exploration: Exploring strategic partnerships to enhance data center business and optimize core competencies.
Revenue Growth Guidance: Aiming for low single-digit revenue growth for 2024.
EBITDA Margin Guidance: Maintaining EBITDA margins in the range of 50% to 52%.
CapEx to Revenue Ratio Guidance: Targeting CapEx to revenue ratio of 22% to 24% for 2024, with a long-term goal to reduce it to 17% to 19%.
Shareholder Return Plan: The company has not explicitly mentioned a share buyback program or dividend program during the earnings call.
The earnings call presents a mixed picture. Financial performance shows slight revenue growth and stable EBITDA margins, but EBITDA has decreased. The company faces macroeconomic and competitive risks, and there's no share buyback plan. Guidance is cautious, with no strong catalysts for growth. Despite some positive aspects like digital business growth, the lack of clear dividend plans and competitive pressures balance the outlook. The Q&A reveals cautious optimism but no strong positive signals. Overall, these factors suggest a neutral stock price movement.
The earnings call reveals mixed signals: modest revenue growth, but declining EBITDA and operating income due to increased expenses. The Q&A highlights competitive pressures and unclear management responses, especially on synergy and monetization strategies, which are concerning. The lack of shareholder return plans and no new partnerships or strong guidance further contribute to a neutral sentiment. Despite some growth in digital and fixed broadband, the overall financial health remains challenged, resulting in an anticipated neutral stock price movement.
The earnings call presents a mixed picture. While there is growth in key areas like mobile and digital business revenues, concerns arise from declining ARPU and flat subscriber growth. The Q&A highlights management's cautious optimism, but lack of clarity on certain issues raises uncertainties. Despite positive developments like fiber optic expansion and cost optimization targets, the overall sentiment remains balanced, resulting in a neutral outlook for the stock price.
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