Telkom Indonesia, better known by its $TLKM symbol, has just released a financial report that has made many eyes on it. In the last quarter of 2024, they announced a net profit of 5.9 trillion rupiah, up 18% compared to last year (YoY) and 1% compared to the previous quarter (QoQ). This figure brings Telkom’s total net profit for the whole of 2024 to 23.6 trillion rupiah, although slightly down 4% compared to the previous year, but still in line with market expectations (99% of the 2024F consensus estimate).
1. Stable Customer Numbers, ARPU Increases Quarterly
In terms of operations, TLKM recorded 159.4 million mobile subscribers in 4Q24, with stable growth (+0% YoY, +1% QoQ). Meanwhile, the average revenue per user (ARPU) reached 44 thousand rupiah. Although this figure is down 5% year-on-year, there are positive signals with a 2% QoQ increase. This indicates a recovery after the downward trend in ARPU that has occurred since 2Q23 when it reached its highest figure at 49.7 thousand rupiah. The stability of ARPU in the mobile sector provides hope amid the impact of price wars in the telecommunications industry during 2024.
On the other hand, broadband subscribers also showed a positive trend, increasing 8% YoY and 1% QoQ, although their ARPU fell to 233 thousand rupiah. This decline is likely due to the fixed mobile convergence (FMC) strategy and tight competition in the broadband sector.
2. Business Profit Drops Due to Marketing Costs
Despite improvements in operational metrics, TLKM’s operating profit in 4Q24 actually decreased to 10 trillion rupiah (+1% YoY, -6% QoQ). The main cause of this decline was the increase in marketing costs, which jumped to 1.3 trillion rupiah, growing 38% YoY and 36% QoQ. This is inseparable from the customer loyalty program that seeks to increase retention. Total operating profit during 2024 was recorded at 42.4 trillion rupiah, slightly below market expectations (97% of the 2024F consensus estimate).
3. Potensi Dividend Yield 6,5%-7,4%
In terms of dividends, TLKM has the potential to distribute dividends for the 2024 financial year in the range of 167-191 rupiah per share. When viewed from the dividend payout ratio which is around 70%-80%, this can result in a dividend yield of between 6.5%-7.4% based on the current share price at the level of 2,570 rupiah per share. The GMS to determine the distribution of dividends for the 2024 financial year is planned for May 27, 2025.
Key Takeaway
In an earnings call on April 21, TLKM management conveyed a low-single-digit revenue growth target for 2025, with a projected EBITDA margin in the range of 50%-52%. Despite the challenges, we believe TLKM’s target in 2025 is very realistic. Positive developments in the telecommunications industry, coupled with stable ARPU and an increase in the number of subscribers, show optimistic signals. Readiness to adapt to trends and changes in the market will be the main key for Telkom in facing the coming years.
So, for those of you who pay attention to TLKM shares and potential investment in the telecommunications sector, stay vigilant! Is this a sign that the positive trend will continue? Only time will tell!