In This Article:
Telekomunikasi Indonesia (NYSE: TLK), also known as Telkom Indonesia, the largest telecommunications company in Indonesia, dragged its feet on filing a fourth-quarter report for fiscal year 2018. When it finally appeared on April 30, a first-quarter report followed just three days later. Let's have a look at both of these earnings reports, one after the other.
The raw numbers: Telkom Indonesia's fourth-quarter results
| Metric | Q4 2018 | Q4 2017 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $2.14 billion | $2.31 billion | (7.5%) |
| Net income | $257 million | $308 million | (17%) |
| GAAP earnings per ADS (diluted) | $0.26 | $0.31 | (17%) |
Data source: Telkom Indonesia. One American Depositary Share, or ADS, is the equivalent of 100 series B shares of Telkom Indonesia on the Jakarta stock exchange. GAAP = generally accepted accounting principles.
Telkom's first-quarter results
| Metric | Q1 2019 | Q1 2018 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $2.47 billion | $2.38 billion | 3.5% |
| Net income | $441 million | $422 million | 4.3% |
| GAAP earnings per ADS (diluted) | $0.44 | $0.43 | 4.3% |
Data source: Telkom Indonesia, as above.
What happened with Telkom Indonesia in these quarters?
-
The company reports its results in Indonesian Rupiah, not U.S. dollars. The Rupiah strengthened by 4.8% against the dollar between the fourth quarters of 2017 and 2018, giving Telkom a currency headwind when it comes to year-over-year comparisons in dollar terms. Measured in Rupiah, revenues rose 1.1% year over year.
-
For the first quarter, the currency-exchange trends worked out to a 4.1% stronger Rupiah-per-dollar rate. Measuring the revenue growth rates in Rupiah instead of dollars, Telkom scored a 7.7% year-over-year increase.
-
The fourth-quarter report was late due to an unusually complex conversion between Indonesian and international financial reporting standards (IFRS). The company filed a request for a deadline extension with the SEC, explaining that its financial staff and external auditors needed to complete their analyses before compiling a final report. The full report was completed four days later.
-
The Telkomsel phone network now serves 168.6 million subscribers. That's a 5.7 million increase from the end of the fourth quarter, which was a low point in the company's recent history. In 2018 as a whole, the subscriber count fell 17%, to 163 million accounts.
-
As Telkom's wireless customers latch on to smartphones with high-speed broadband plans, the company's revenue mix is shifting dramatically. In the first quarter, data service revenues rose 30% year over year to represent 34% of Telkom's total revenues. A year earlier, the data portion of total revenues stood at 31%.
-
Like the rest of the world, Indonesia's newfound love of data-driven communications has a downside for the network operator. Telkom's ordinary voice service revenues fell 19% year over year and SMS messages collected 27% lower sales.