The Cost Discipline From FY2020 Didn't Reset in January
Telkom opened FY2021 the way it closed FY2020 (see that post): revenue basically flat, profit growing anyway. Revenue fell 0.7% YoY to Rp33,945 billion from Rp34,194 billion, but net income attributable to owners grew 14.3% to Rp6,014 billion, and Adjusted EBITDA» grew 12.7% to Rp18,985 billion - a wider EBITDA-margin gap than the revenue line alone would suggest, and a sign that FY2020's cost pullback wasn't a one-year pandemic reflex that snapped back once the calendar changed.
The more interesting number sits inside the segment note: the Enterprise segment's loss narrowed to -Rp439 billion (-10.7% margin), its smallest loss in the five consecutive quarters this dataset has now tracked back to Q1 2020. Still red, still undisclosed as to cause - but the trend line, taken across five quarters, now points toward breakeven rather than away from it.
The Prescription
Telkom should treat FY2020's free-cash-flow strength as something to actively defend into 2021, not something the market should quietly assume reverses. Capex is already reaccelerating - Q1 2021's Rp6,580 billion (property/equipment plus intangibles) is up sharply from Q1 2020's Rp4,787 billion, exactly the capex snap-back flagged as a risk in the FY2020 post's Prescription. That's not wrong on its own - a state-owned incumbent under-investing for a full year has real competitive costs - but Telkom owes shareholders a forward capex plan that explains how much of the 2020 pullback was genuinely deferred and how much becomes the new normal, rather than let the market re-derive it quarter by quarter from the cash flow statement.
Telkom should also finally put a name to what's driving Enterprise's five-quarter loss streak. The segment's own trajectory - a genuinely improving trend, not a flat one - suggests management already understands the cause internally; disclosing it would let the market credit the improvement as durable instead of pricing in continued uncertainty (see Beyond the Usual).
Key Financial Metrics
Q1 2021 (three months ended Mar 31, 2021) vs Q1 2020, consolidated
FX: approximately Rp14,606 = US$1 (Mar 31, 2021) and Rp16,278 = US$1 (Mar 31, 2020) - quoted market rates for each date, used only to convert the USD columns below; the Rp16,278 rate reflects the IDR's sharp COVID-shock depreciation in March 2020, so part of the USD-denominated YoY move below reflects currency, not just operating performance.
| Metric | Q1 2021 (Rp) | Q1 2021 (US$) | Q1 2020 (Rp) | YoY (Rp) | YoY (US$) |
|---|---|---|---|---|---|
| Revenue | Rp33,945B | ~$2,323.9M | Rp34,194B | ⚠️ -0.7% | ✅ +10.6% |
| Adjusted EBITDA» | Rp18,985B | ~$1,299.7M | Rp18,778B | ✅ +1.1% | ✅ +12.7% |
| Operating Income» | Rp11,699B | ~$800.9M | Rp11,929B | ⚠️ -1.9% | ✅ +9.3% |
| Net Income (attributable to owners) | Rp6,014B | ~$411.7M | Rp5,862B | ✅ +2.6% | ✅ +14.3% |
| Free Cash Flow» (OCF - capex) | Rp10,853B | ~$743.1M | Rp12,816B | ⚠️ -15.3% | ⚠️ -5.6% |
| Total Cash | Rp31,729B | ~$2,172.2M | n/a (Dec-20: Rp20,589B) | ✅ +54.2% | ✅ +46.0% |
Free cash flow fell YoY despite EBITDA growth - the reason is capex, up 37.4% to Rp6,580 billion from Rp4,787 billion, the reacceleration flagged in The Prescription above. Cash grew sharply sequentially (from Dec-2020's Rp20,589 billion), largely funded by Rp10,112 billion of new borrowing drawn during the quarter - not organic cash generation alone, and worth watching given a large FY2019 dividend (Rp16,644 billion combined ordinary and special) was declared right after quarter-end (see Beyond the Usual).
Revenue barely moved and free cash flow actually fell on reaccelerating capex, but profit still grew - the Enterprise segment's narrowing loss is the one real structural improvement this quarter, even though its cause remains undisclosed. See Target Valuation Range for what the market is pricing in.
Key Operational Metrics
- IndiHome subscribers: 8.15 million, up 12.3% YoY - continued double-digit growth, the one segment whose trajectory across every quarter of this dataset has never wavered
- IndiHome ARPU: Rp266,000/month, up from Rp262,000 in Q4 2020 - a third straight quarter of sequential ARPU growth (see Q3 2020 and FY2020)
- Capital expenditure: Rp6,580 billion, up 37.4% from Rp4,787 billion a year earlier - the capex reacceleration flagged above
- Mobile subscriber count: not separately disclosed in this quarter's presentation in the same format as prior quarters
Segment Comparison
Q1 2021 vs Q1 2020
| Segment | External Revenue Q1'21 | External Revenue Q1'20 | YoY | Segment Result Q1'21 | Margin Q1'21 | Margin Q1'20 |
|---|---|---|---|---|---|---|
| Mobile | Rp20,382B | Rp21,573B | ⚠️ -5.5% | Rp7,422B | ✅ 36.4% | 42.4% |
| Consumer (IndiHome) | Rp5,973B | Rp4,772B | ✅ +25.2% | Rp1,878B | ✅ 31.4% | 18.0% |
| Enterprise | Rp4,102B | Rp4,324B | ⚠️ -5.1% | 🔴 -Rp439B | 🔴 -10.7% | 2.7% |
| WIB | Rp3,347B | Rp3,359B | ➖ -0.4% | Rp2,222B | ⚠️ 66.4% | 48.9% |
| Others | Rp47B | Rp64B | ⚠️ -26.6% | Rp58B | n/m | n/m |
| Total segment | Rp33,851B | Rp34,092B | ➖ -0.7% | Rp11,141B | 32.9% | 34.5% |
Mobile's margin compressed nearly 6 points YoY even as revenue only fell modestly - a genuinely different pattern from Consumer, whose margin improved by 13 points on real subscriber and ARPU growth (see Key Operational Metrics above), not discounting. WIB's margin, already the highest of any segment, expanded further to 66.4%, though on essentially flat revenue.
Mobile
Revenue fell 5.5% YoY and margin compressed from 42.4% to 36.4% - the softest Mobile quarter in this dataset by margin, though without a disclosed cause in the segment footnote.
Consumer (IndiHome)
The clearest growth story again: revenue +25.2%, margin +13 points, on real subscriber growth (+12.3% YoY) and rising ARPU rather than discounting - the same pattern flagged in every prior quarter of this backfill.
Enterprise
Still a loss, but the smallest of five consecutive quarters (see Beyond the Usual for what a full-year lens on this segment showed in the FY2020 post).
WIB (Wholesale and International Business)
Margin expanded to 66.4% from 48.9% on essentially flat revenue - the strongest margin of any segment this quarter, continuing the pattern noted in FY2020's post.
Beyond the Usual
Telkomsel Quietly Put US$300 Million Into the Company Behind What Would Become GoTo
A subsequent-events footnote discloses that on May 21, 2021, Telkomsel made an additional investment of US$300 million (approximately Rp4,290 billion) in "AKAB" - PT Aplikasi Karya Anak Bangsa, the operating entity behind the Gojek ride-hailing and payments app, ahead of its later merger into GoTo Group. This is a material capital commitment from Telkom's core mobile subsidiary into a fast-growing but still loss-making digital-services platform, disclosed only as a brief subsequent-event line rather than framed anywhere in the earnings materials as a strategic bet worth explaining to shareholders. Worth tracking in later quarters as GoTo's own results become public (GoTo itself listed on the Indonesia Stock Exchange in April 2022 - see the 2022-03 post).
A Rp16.6 Trillion Combined Dividend Was Declared Right After Quarter-End
The same subsequent-events note discloses that Telkom's Annual General Meeting, held May 28, 2021 for book period 2019, approved a Rp12,483 billion ordinary dividend (Rp126.007/share) plus a Rp4,161 billion special dividend (Rp42.002/share) - a combined Rp16,644 billion payout landing just after Q1's close, roughly 2.8x Q1's own net income attributable to owners. This explains why Q1's Rp10,112 billion of new borrowing (flagged in Key Financial Metrics) matters: some of that liquidity build looks timed to fund a dividend payment that hadn't hit the cash flow statement yet as of March 31.
Target Valuation Range
Bottom line: roughly Rp2,830-Rp5,090 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp3,420 actual close - the stock trades in the lower half of this range, consistent with the market still discounting Enterprise's undisclosed cause even as the segment's own trend improves.
Telkom's shares closed Q1 2021 at Rp3,420, up 3.3% from FY2020's Rp3,310 close (see that post's valuation section) and up 33.6% from the two-year-low Rp2,560 close in Q3 2020. Over the trailing 2 years (April 2019 through March 2021), the stock moved from a Rp3,790 close to Rp3,420, a 9.8% net decline - unremarkable enough on its own that this valuation section, not a standalone price section, is where the move belongs.
| Market cap → enterprise value | Q1 2021 (period-end) |
|---|---|
| Share price (period-end) | Rp3,420 |
| Shares outstanding | 99,062,216,600 |
| Market capitalization | ~Rp338,793 billion (~$23.2 billion) |
| Plus: total debt (short-term bank loans + current and long-term borrowings) | Rp53,990 billion |
| Less: cash | Rp31,729 billion |
| Enterprise value | ~Rp361,054 billion |
| Peer-multiple sanity check | FY2020 (year-end) | Q1 2021 (TTM) | Change |
|---|---|---|---|
| TTM EPS | Rp210.02 | Rp211.60 | ➖ roughly flat |
| P/E | ~15.8x | ~16.2x | ⚠️ up |
| Book value per share (owners) | ~Rp1,034.9 | ~Rp1,096.7 | ✅ up |
| P/B | ~3.20x | ~3.12x | ➖ roughly flat |
| TTM Adjusted EBITDA | Rp72,397B | Rp72,604B | ➖ roughly flat |
| EV/EBITDA (TTM) | ~4.9x | ~5.0x | ➖ roughly flat |
Every multiple held roughly flat between FY2020's close and Q1 2021's - TTM EBITDA and EPS barely moved, and the modest price gain (+3.3%) was matched almost exactly by the multiple expansion, meaning the market isn't yet re-rating the stock on Enterprise's improving trend, just tracking it in line with trailing operating results. Applying the same mature-telecom EV/EBITDA range used throughout this dataset:
| Scenario | Key assumption | Multiple | Implied EV | Implied price |
|---|---|---|---|---|
| Current (Q1 2021 close) | actual market price, for reference | ~5.0x TTM Adjusted EBITDA | ~Rp361,054 billion | Rp3,420 |
| Bear | Enterprise's cause stays undisclosed and the capex reacceleration (see The Prescription) pressures free cash flow further | ~4.5x | ~Rp326,718 billion | ~Rp2,832 |
| Base | Multiple holds near current levels as the market credits Enterprise's improving trend without yet confirming it's durable | ~5.2x | ~Rp377,541 billion | ~Rp3,554 |
| Bull | Enterprise's cause is disclosed and confirmed structural, re-rating the multiple toward the higher end of the historical range | ~7x | ~Rp508,228 billion | ~Rp5,088 |
The current close sits almost exactly on the base case - a market pricing Telkom in line with its trailing operating trend, not yet extending credit for Enterprise's improving trajectory or discounting for the capex reacceleration either way.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk's unaudited consolidated financial statements as of and for the three months ended March 31, 2021, plus the Company's 1Q21 corporate presentation.