Perusahaan Perseroan Persero PT Telekomunikasi Indonesia Tbk : 1Q 2020

FIRST QUARTER OF 2020 RESULTS (UNAUDITED)

TICKERS:	SHAREHOLDER COMPOSITION:
IDX	: TLKM	Government of Indonesia	: 52.1%	Mar 31, 2020	= Rp16,310.0
NYSE	: TLK	Public	: 47.9%	Dec 31, 2019	= Rp13,882.5

CONVERSION RATES (US$ 1.00):

FINANCIAL PERFORMANCE Revenue

(in Rp. Bn)

Share Price (Jun 30, 2020)

Rp3,050 (IDX) and USD21.9 (NYSE)

Market Capitalization (Jun 30, 2020)

Rp302 Tn (USD21.7 Bn)

Average Daily Trading (30 Days)

173.9 Mn Shares (IDX) & 375,025 DR (NYSE)

Source: Bloomberg

Highlights



IndiHome continued its strong momentum with revenue increased by 19.7% YoY to Rp5.1 trillion in 1Q20 driven by the increasing number of IndiHome subscribers.

Telkomsel's digital business grew by 16.3%YoY to Rp15.8 trillion and increased its contribution to total revenue progressively to 70.6% from 61.4% last year.



Telkomsel deployed c. 7 thousand 4G BTSs during 1Q20. The network rolls out brought total BTS on air to c. 219thousand units. While, Telkom's fiber-based backbone length reached c. 164,900 Km by the end of 1Q20.

Financial Highlights

Key Indicators	YoY
Growth (%)	..
(Rp. Bn)	1Q20	1Q19

Revenues

34,194

34,840

(1.9)

Expenses

22,265 22,811 (2.4)

Operating Profit EBITDA

EBITDA Margin (%)

Net Income

Net Income Margin (%)

Operational Highlights

11,929

12,029

(0.8)

18,759

17,530

7.0

54.9

50.3

4.6ppt

5,862

6,224

(5.8)

17.1

17.9

(0.8)ppt

Subscribers	YoY
Growth (%)
(000)	1Q20	1Q19

Broadband

.

Fixed Broadband - IndiHome

7,255 5,522 31.4

Mobile Data UserCellular

PostpaidPrepaid Total

105,064

111,082

(5.4)

6,438

5,703

12.9

156,129 162,567

162,939 168,642

(4.2)(3.6)

Investor Relations PT Telkom Indonesia (Persero) Tbk Telkom Landmark Tower, 39th Floor Jl. Gatot Subroto Kav. 52, Jakarta 12710 Phone Fax Email Website : 62 21 5215109 : 62 21 5220500 :[e-mail] :www.telkom.co.id

DISCLAIMER This document contains financial conditions and result of operation, and may also contain certain projections, plans, strategies, and objectives of the Company, which would be treated as forward-looking statements within the meaning of applicable law.Forward looking statements, by their nature, involve risk and uncertainty that could cause actual results and development to differ materially from those expressed or implied in these statements. Telkom Indonesia does not guarantee that any action, which mayhave been taken in reliance on this document, will bring specific results as expected.

PT TELKOM INDONESIA (PERSERO) Tbk

FIRST QUARTER OF 2020 (UNAUDITED)

The following analysis and discussion are based on our Indonesian GAAP financial statements for the first quarter of 2020 and 2019. The reports have been submitted to Indonesia Financial Services Authority (OJK).

Revenues

IndiHome

5,077 4,242 19.7

YoY
Key Indicators
(Rp. Bn)
1Q20	1Q19.	Growth (%)…
Data, Internet & IT Service	17,847	16,647	7.2
SMS, Fixed and Cellular Voice	7,045	8,963	(21.4)
Interconnection	2,051	1,614	27.1
Network and Other Telco Services	2,174	3,374	(35.6)
Total	34,194	34,840	(1.9)

Telkom recorded a decrease of 1.9% YoY in revenue to Rp34.2 trillion in the first quarter of 2020, dragged down by the continuous legacy revenue decline and strategy changes in Enterprise segment to improve its business fundamentals. On the other side, mobile digital business and IndiHome continued to grow healthily in this period. The revenue details are as follows:

• Data, Internet & IT Services revenuesgrew by 7.2% YoY to Rp17.8 trillion mainly attributable to 15.9% YoY growth in cellular data revenue. Driven by strong increase in mobile data consumption due to various digital content offered, mobile data traffic rose by 41.7% YoY to 1,950 petabyte.

• SMS, Fixed and Cellular Voice revenuescontinued to decline by 21.4% YoY. Due to cannibalization from instant messaging (OTT) application, both voice and SMS revenue decreased by 19.8% YoY and 27.5% YoY, respectively.

• IndiHomecontinued its strong momentum with 19.7% YoY growth in revenue to Rp5.1 trillion in the first quarter of 2020. IndiHome subscribers increased by 31.4% YoY to 7.26 million subscribers.

• Interconnection revenuesrose by 27.1% YoY to Rp2.1 trillion as we successfully grabbed opportunities from overseas wholesale voice business.

• Network and Other Telecommunication Services revenuesdropped by 35.6% YoY mainly due to lower devices-related business along with the shift in our strategy to focus on more profitable products and services in Enterprise segment.

Expenses

Key Indicators

YoY

(Rp. Bn)

1Q20

1Q19.

Growth (%)

Operating Expense

Operation, Maintenance & Telecommunication Services

8,252

10,709

(22.9)

Personnel

3,451 3,132 10.2

Interconnection

1,519

1,268

19.8

Marketing

641 907 (29.3)

General & Administrative

1,572

1,294

21.5

Total Operating Expenses

15,435

17,310

(10.8)

Depreciation & Amortization

6,849

5,642

21.4

Forex (Gain) / Loss

(205) 45 (555.6)

Others (Income) / Expense

186

(186)

200.0

Total Expenses

22,265

22,811

(2.4)

In the first quarter of 2020, total expenses booked was Rp22.3 trillion or decreased by 2.4% YoY with total Operating & Maintenance cost dropped quite significantly by 22.9% YoY. Details of expenses are as follows:

• Operation & Maintenance ("O&M")expensesdeclined by 22.9% YoY. The decline was mainly attributable to the adoption of new accounting rule (PSAK 73) that reduced O&M expense of Rp992 billion. The decline in O&M was also driven by lower cost of devices, IT services, and managed service solutions in line with business focus changes in Enterprise segment.

• Personnel expensesrose by 10.2% YoY in line with the increase in number of employees as we hired more people, in particular digital talents, to strengthen our digital capabilities. The increase was also due to accrued incentives during the period.

• Interconnection expensesgrew by 19.8% YoY, in line with higher growth in our international wholesale voice business.

• Marketing expensesdropped by 29.3% YoY mainly due to higher usage of modern channel for mobile product distribution and less promotional events for IndiHome. The decline was also partly due to the adoption of new accounting rule (PSAK 72) that reduced marketing expense of Rp85 billion.

• General & Administrative expensesrose by 21.5% YoY to Rp1.6 trillion partly due to the adoption of new accounting rule (PSAK 71) that gave additional cost of Rp124 billion in G&A expense.

• Depreciation & Amortizationincreased by 21.4% YoY. The increase was partly attributable to the adoption of PSAK 73 whereby we recorded depreciation of right-of-use (RoU) assets of Rp961 billion. Moreover, the increase in Depreciation and Amortization expense was also contributed by asset additions, in line with infrastructure development in mobile and fixed-line business, including fiber-based backbone and access, and 4G BTS.

• We recordedNet Forex Gainof Rp205 billion by the end of March 2020.

• Other Expense-netrecorded an expense of Rp186 billion from higher non-operating expense and lower non-operating income during the period

EBITDA and Net Income

In 1Q20, EBITDA grew by 7.0% YoY to Rp18,759 billion with EBITDA margin of 54.9% in this period. The increase in EBITDA was mainly attributable to the decline in O&M expenses. Meanwhile, Net Income declined by 5.8% YoY to Rp5,862 billion. Net Income margin was 17.1% in this period.

In 1Q20, we started to adopt PSAK 72 and 73 that impacted both EBITDA and Net Income. By factoring PSAK 72 and 73 accounting rules in, normalized EBITDA was Rp17,738 billion or grew by 1.2% YoY with EBITDA margin of 52.0%. While normalized Net Income was Rp5,973 billion, declined by 4.0% YoY with Net Income margin of 17.5%.

Financial Position

Total Assets

Total Liabilities

Non-controlling Interests

Total Equity

End of
Key Indicators
(Rp. Bn)
1Q20	FY19.	Growth (%)
241,914	221,208	9.4
115,367	103,958	11.0
20,100	17,689	13.6
126,547	117,250	7.9

• Total assets at end of March 2020 was Rp241.9 trillion, increased by 9.4% YTD. The increase was mainly due to the adoption of PSAK 73 where right-of-use (RoU) assets were recognized.

• Total liabilities as of 31 March 2020 stood at Rp115.4 trillion, rose by 11.0% YTD. The increase in liabilities were driven by impact of PSAK 73 adoption that gave additional Rp12.6 trillion in lease liabilities.

• Non-controlling interests jumped by 13.6% to Rp20.1 trillionas a result of healthy subsidiaries'performances.

• Our equity rose by 7.9% YoY in 1Q20 as the result of higher retained earnings from additional Net Income.

Cash Flows

Key Indicators

(Rp. Bn)

Cash Flows from Operating Activities

17,603

13,055

34.8

Cash Flows from/(used in) Investing Activities

(5,089)

(6,208)

(18.0)

Cash Flow from/(used in) Financing Activities

(6,850)

(898)

662.8

Net Increase (Decreased) in Cash & Cash Equivalents

5,664

5,949

(4.8)

Effect of Exchange Rate Changes on Cash and CashEquivalents

459

(8)

5,837.5

Cash and Cash Equivalents at Beginning of Year

18,242

17,439

4.6

Cash and Cash Equivalents at End of Period

24,365

23,380

4.2

• Net cash provided by operating activities in 1Q20 reached Rp17.6 trillion or jumped by 34.8% YoY, mainly due to lower payment for expenses.

• Net cash used in investing activities was lower by 18.0% YoY as we made tower asset acquisition last year.

• Net cash used in financing activities increased to Rp6.9 trillion due to higher amount of loan and lease payment.

The adoption of PSAK 73 requires to record payment of lease liabilities in cash flows from operating activities of Rp909 billion and in cash flows used in financing activities of Rp2.3 trillion.

Debts

IDR/Rupiah

USD/US Dollar

JPY/Japanese Yen

MYR/Malaysian Ringgit

Total

End of	Portion (%)
Currencies
(Rp. Bn)
1Q20	FY19	1Q20	FY19
58,468	50,212	96.8	96.4
1,357	1,315	2.2	2.5
578	491	1.0	0.9
25	66	0.0	0.1
60,428	52,084	100.0	100.0

At the end of March 2020, total debts (including financial lease) amounting to Rp60.4 trillion, increased by 16.0% YTD compared to the end of 2019. In this 1Q20 period, we began to adopt PSAK 73 which regulates the recognition of lease. At the end of March 2020, total lease liabilities was Rp14.9 trillion of which Rp12.6 trillion was the impact of PSAK 73. By factoring the PSAK 73 in, normalized amount of debt would be Rp47.9 trillion.

During the period, we recorded finance cost of Rp1,215 billion or grew by 22.0% YoY compared to the same period last year. The normalized finance cost for this period was Rp976 billion or declined by 2.0% YoY mainly due to the adoption of PSAK 73.