TLKM A 9% Revenue Quarter Turned Into a 26% Profit Quarter

Profit Outran Revenue Again, and the Gap Widened

Revenue grew 8.9% YoY to Rp35,535 billion in Q2 2021 (three months ended June 30) from Rp32,662 billion a year earlier - a real acceleration from Q1's -0.7% (see that post). But net income attributable to owners grew 25.6% to Rp6,437 billion, nearly triple the revenue growth rate, continuing the pattern this entire backfill has tracked since FY2020: Telkom's profit growth keeps outrunning its revenue growth by a wide margin.

The Enterprise segment - the recurring open question across every quarter of this dataset - posted a -Rp244 billion loss this quarter (the discrete Q2 result implied by subtracting Q1's -Rp439 billion from H1's cumulative -Rp683 billion; see Segment Comparison), a meaningfully narrower loss than the -Rp470 billion posted a year earlier in Q2 2020. Still red, but the trajectory first flagged in Q1's post - a segment moving toward breakeven, not away from it - held for a second straight quarter.

The Prescription

Telkom should stop treating the FY2019 dividend payout as background noise in its cash-flow story and start disclosing a clearer payout policy going forward. A Rp16,644 billion dividend actually left the bank this quarter (see Beyond the Usual) - more than 2.5x the quarter's own net income - and while a state-owned company returning cash to its majority shareholder (the Indonesian government) isn't itself a red flag, the size and timing relative to the FY2020 capex-cut/FCF-build discussed in that post's Prescription deserves a forward-looking capital-allocation framework, not a quarter-by-quarter surprise.

Telkom should also start disclosing more about Mitratel, its tower subsidiary, given the IPO preparation clearly underway behind the scenes (Mitratel's IPO landed in November 2021 - see Q3's post). A major subsidiary carve-out changes the ownership and consolidation picture materially, and shareholders deserve advance visibility into the plan, not just a subsequent-event footnote after the fact.

Key Financial Metrics

Q2 2021 (three months ended Jun 30, 2021) vs Q2 2020, consolidated - discrete-quarter figures derived by subtracting Q1 from each year's H1 cumulative filing

FX: approximately Rp14,602 = US$1 (Jun 30, 2021) and Rp14,194 = US$1 (Jun 30, 2020) - quoted market rates for each date, used only to convert the USD columns below.

Metric	Q2 2021 (Rp)	Q2 2021 (US$)	Q2 2020 (Rp)	YoY (Rp)	YoY (US$)
Revenue	Rp35,535B	~$2,433.2M	Rp32,662B	✅ +8.8%	✅ +5.7%
Adjusted EBITDA»	Rp19,328B	~$1,323.7M	Rp17,402B	✅ +11.1%	✅ +7.9%
Operating Income»	Rp11,916B	~$816.0M	Rp10,324B	✅ +15.4%	✅ +12.1%
Net Income (attributable to owners)	Rp6,437B	~$440.9M	Rp5,127B	✅ +25.6%	✅ +22.0%
Free Cash Flow» (OCF - capex)	Rp7,460B	~$510.9M	Rp5,722B	✅ +30.4%	✅ +26.8%
Total Cash	Rp36,613B	~$2,507.4M	n/a (Mar-21: Rp31,729B)	⚠️ +15.4% seq.	-

FCF grew even as capex remained elevated (Rp8,192 billion discrete-quarter, comparable to Q1's reaccelerated Rp6,580 billion), because operating cash flow grew faster still. Cash grew sequentially from Q1's Rp31,729 billion despite the Rp16,644 billion dividend paid this quarter - a real sign of underlying cash generation strength, not just the borrowing-driven build flagged in Q1's post.

Revenue growth accelerated and profit grew even faster, with Enterprise's loss narrowing for a second straight quarter - the clearest sign yet that FY2020's cost discipline is compounding rather than fading. See Target Valuation Range for what the market is pricing in.

Key Operational Metrics

• IndiHome subscribers: 8.3 million, up 11.4% YoY - continued double-digit growth for a sixth straight quarter in this dataset
• IndiHome ARPU: Rp270,000/month, up from Rp266,000 in Q1 2021 - a fourth straight quarter of sequential ARPU growth
• Capital expenditure (discrete quarter): Rp8,192 billion, up from Rp7,460 billion of free cash flow generated the same quarter
• Mobile subscriber count: not separately disclosed in this quarter's presentation

Segment Comparison

Q2 2021 vs Q2 2020, discrete-quarter figures derived by subtraction from cumulative H1 filings

Segment	External Revenue Q2'21	External Revenue Q2'20	YoY	Segment Result Q2'21	Margin Q2'21	Margin Q2'20
Mobile	Rp21,066B	Rp20,729B	➖ +1.6%	Rp7,647B	⚠️ 36.3%	36.5%
Consumer (IndiHome)	Rp6,135B	Rp4,999B	✅ +22.7%	Rp1,709B	✅ 27.9%	19.8%
Enterprise	Rp4,572B	Rp3,410B	✅ +34.1%	🔴 -Rp244B	⚠️ -5.3%	-13.8%
WIB	Rp3,550B	Rp3,456B	➖ +2.7%	Rp2,374B	✅ 66.9%	45.9%
Others	Rp79B	Rp69B	➖ +14.5%	Rp55B	n/m	n/m
Total segment	Rp35,402B	Rp32,663B	✅ +8.4%	Rp11,541B	32.6%	29.6%

*Discrete-quarter segment figures are derived by subtracting Q1's own segment table (see that post) from H1's cumulative segment note - the segment footnote itself only discloses cumulative year-to-date figures, unlike the discrete headline financials above.

Consumer's margin actually fell this quarter (31.4% to 27.9%) even as revenue kept growing strongly - a genuinely different quarter than Q1's "growth without discounting" story, worth watching whether it's a one-quarter blip or a real trend. Enterprise's loss, while still real, narrowed meaningfully both sequentially and YoY - its best margin since before Q2 2020's first outright quarterly loss.

Mobile

Revenue grew modestly (+1.6%) after Q1's decline, but margin kept compressing (39.5% to 36.3%) - a slow, steady margin erosion now visible across two consecutive quarters without a disclosed cause.

Consumer (IndiHome)

Revenue still grew strongly (+22.7%) on continued subscriber and ARPU gains (see Key Operational Metrics), but margin fell for the first time in this dataset's tracking of the segment - worth watching in Q3's post for whether it's a one-quarter move.

Enterprise

Loss narrowed to -Rp244 billion from -Rp470 billion a year earlier, even as revenue grew a strong 34.1% - the segment's best margin performance since before its first outright quarterly loss in Q2 2020 (see Beyond the Usual for the Mitratel context building in the background this period).

WIB (Wholesale and International Business)

Margin held near 67%, still comfortably the highest of any segment, on modest revenue growth.

Beyond the Usual

A Rp16.6 Trillion Dividend Actually Left the Bank This Quarter

The FY2019 combined ordinary-plus-special dividend of Rp16,644 billion, approved at the May 28, 2021 AGM (flagged as a subsequent event in Q1's post), was paid out on July 1, 2021 - just after Q2's close, per this filing's own subsequent-events note, meaning the cash impact lands in Q3's numbers rather than Q2's. Owners' equity fell from Rp108,633 billion at Q1's end to Rp98,408 billion by Q2's end despite a full quarter of profit, the accounting effect of the dividend being declared (though not yet cash-paid) within the period - a reminder that a state-owned incumbent's dividend policy can swing quarterly equity by double-digit percentages.

Telkomsel's Bank-Facility Churn Continued at a Similar Scale to Prior Quarters

The subsequent-events note discloses a further round of drawdowns and repayments across July-August 2021 - Telkomsel alone repaid roughly Rp6,500 billion across Bank Mandiri, MUFG Bank, and HSBC while drawing Rp4,000 billion fresh from Bank Mandiri - continuing the same active multi-lender liquidity-management pattern flagged in every quarter since Q2 2020. This is now a well-established baseline feature of the group's capital structure rather than a one-off event worth flagging each quarter going forward.

Target Valuation Range

Bottom line: roughly Rp2,750-Rp4,470 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp3,150 actual close - the stock sits closest to the base case, tracking the improving operating trend without yet pricing in a durable Enterprise turnaround.

Telkom's shares closed Q2 2021 at Rp3,150, down 7.9% from Q1's Rp3,420 close (see that post) despite the quarter's stronger operating results - a real disconnect between the numbers and the market's read, echoing the pattern flagged in Q3 2020's post. Over the trailing 2 years (July 2019 through June 2021), the stock moved from a Rp4,140 close to Rp3,150, a 23.9% net decline.

Market cap → enterprise value	Q2 2021 (period-end)
Share price (period-end)	Rp3,150
Shares outstanding	99,062,216,600
Market capitalization	~Rp312,046 billion (~$21.4 billion)
Plus: total debt	Rp65,162 billion
Less: cash	Rp36,613 billion
Enterprise value	~Rp340,595 billion

Peer-multiple sanity check	Q1 2021	Q2 2021 (TTM)	Change
TTM EPS	Rp211.60	Rp224.75	✅ up
P/E	~16.2x	~14.0x	✅ down
Book value per share (owners)	~Rp1,096.7	~Rp993.4	⚠️ down (dividend effect)
P/B	~3.12x	~3.17x	➖ roughly flat
TTM Adjusted EBITDA	Rp72,604B	Rp74,530B	✅ up
EV/EBITDA (TTM)	~5.0x	~4.6x	✅ down

P/E and EV/EBITDA both fell despite growing TTM earnings and EBITDA - the multiple compression, not the operating trend, explains the price decline this quarter, meaning the stock got cheaper on an operating basis even as the price itself fell. Applying the same mature-telecom EV/EBITDA range used throughout this dataset:

Scenario	Key assumption	Multiple	Implied EV	Implied price
Current (Q2 2021 close)	actual market price, for reference	~4.6x TTM Adjusted EBITDA	~Rp340,595 billion	Rp3,150
Bear	Market stays skeptical of the dividend-driven equity drawdown and the still-unexplained Enterprise cause	~4.5x	~Rp335,385 billion	~Rp2,750
Base	Multiple recovers modestly toward its Q1 level as the quarter's stronger results get priced in with a lag	~5.0x	~Rp372,650 billion	~Rp3,362
Bull	Multiple re-rates toward the top of the historical range on confirmation that Enterprise's improving trend (two straight quarters now) is durable	~6.5x	~Rp484,445 billion	~Rp4,467

The current close sits below even the bear case, a genuinely undervalued read on this specific multiple framework - the market appears to be pricing in more caution than the quarter's actual numbers (accelerating revenue, a second straight quarter of Enterprise improvement, growing FCF) would obviously justify.

---