Telkom Indonesia(TLK) - 2022 Q4 - Annual Report

Spin-Off Details - The Spin-Off of the IndiHome Business Segment is valued at Rp 58,249,920,571,200 (approximately 58.25 trillion Indonesian Rupiah) [26] - The valuation of Telkomsel at the time of the Spin-Off is Rp 319,359,999,960,480 (approximately 319.36 trillion Indonesian Rupiah) [26] - After the Spin-Off, the Company's ownership in Telkomsel will increase to 69.9% while Singtel's ownership will be 30.1% [26] - The Spin-Off is expected to accelerate the provision of broadband services across all regions of Indonesia [24] - The Company plans to merge its fixed broadband and mobile broadband services into a single business entity through this Spin-Off [23] - The Spin-Off is classified as a material transaction requiring approval from Independent Shareholders [12] - The Spin-Off will involve the transfer of certain assets and liabilities related to the IndiHome Business Segment to Telkomsel [10] - The Spin-Off is conducted in compliance with the Company Law and relevant regulations [20] - The Company has confirmed the completeness and correctness of the information presented in the Spin-Off Plan [8] - The Spin-Off will involve the provision of infrastructure, devices, and professional services to support the IndiHome Business Segment [29][31] - The transaction is structured to fulfill criteria for tax facilities according to PMK 56 [32] - The Company has obtained necessary approvals from its general meeting of shareholders and Telkomsel's general meeting of shareholders for the Spin-Off [36] - The Spin-Off of the IndiHome Business Segment to Telkomsel is set to be effective on July 1, 2023 [130] - The IndiHome Business Segment will be transferred to Telkomsel, which will assume all related operations, assets, and legal obligations [149] - The signing of the Deed of Spin-Off is set for June 30, 2023, or another date determined by the Company [147] - The Company confirms that the Proposed Transaction is a Material Transaction and does not involve any conflict of interest [150] - The Board of Directors and Board of Commissioners are responsible for the accuracy of the information disclosed in the Spin-Off Plan [151] - The Spin-Off Plan aims to benefit shareholders, employees, and the public, with information available at the Company's office starting from the announcement date [152] - Any inquiries regarding the Spin-Off Plan should be directed to the Investor Relations department of the Company [153] Financial Performance - Total revenue for the company increased from Rp 136,462 billion in 2020 to Rp 147,306 billion in 2022, representing an increase of 7.5% [81] - IndiHome segment revenue grew by 5.7% to Rp 26.55 trillion in 2022, with a customer base reaching 9.2 million [87] - Current year profit for the company was Rp 27,680 billion in 2022, down from Rp 33,948 billion in 2021, a decrease of 18.5% [82] - Total liabilities decreased from Rp 131,785 billion in 2021 to Rp 125,930 billion in 2022, a reduction of 4.4% [79] - Total equity increased from Rp 145,399 billion in 2021 to Rp 149,262 billion in 2022, an increase of 2.0% [79] - Operating profit decreased from Rp 47,563 billion in 2021 to Rp 39,581 billion in 2022, a decline of 16.7% [81] - The company’s basic profit per share was Rp 209.49 in 2022, compared to Rp 249.94 in 2021, a decrease of 16.2% [82] - Total assets decreased slightly from Rp 277,184 billion in 2021 to Rp 275,192 billion in 2022, a decline of 0.7% [79] - The pro forma total assets of the company after the spin-off of the IndiHome business segment increased to IDR 277,905 billion [94] - After the spin-off, Telkomsel's total assets rose to IDR 109,470 billion, with an increase of IDR 8,479 billion due to the transfer [95] - The market value of the IndiHome business segment as of December 31, 2022, was estimated at IDR 58,165 billion [106] - The market value of 100% shares of Telkomsel and subsidiaries as of December 31, 2022, was estimated at IDR 320,479 billion [116] - The company's revenue from 2018 to 2022 experienced a Compound Annual Growth Rate (CAGR) of 3.02% [121] - The consolidated EBITDA showed a fluctuating increase with a CAGR of 7.49% during the same period [121] Strategic Goals - The Company aims to enhance competitiveness in the Indonesian telecommunications sector through this strategic move [22] - The Proposed Transaction is expected to improve company performance and strengthen Telkom Group's positioning as a market leader in digital telco [75] - The integration of mobile and broadband businesses is anticipated to provide cost efficiency and enhance customer loyalty [74] - The Proposed Transaction is projected to support government revenue through increased taxes and dividends [75] - The projected revenue for 2027 with the Transaction Plan is IDR 191.59 trillion, compared to IDR 189.20 trillion without it [122] - The company's expenses and costs are projected to decrease to IDR 92.96 trillion with the Transaction Plan, down from IDR 93.58 trillion without it [122] - Total assets are projected to decrease from IDR 341.75 trillion to IDR 338.82 trillion by 2027 with the Transaction Plan [122] - Total liabilities are expected to decrease from IDR 126.57 trillion to IDR 117.31 trillion by 2027 with the Transaction Plan [122] - Total equity is projected to increase to IDR 221.52 trillion with the Transaction Plan, compared to IDR 215.17 trillion without it by 2027 [122] Shareholder Information - The current capital structure of the Company includes a total of 99,062,216,599 issued and paid-up shares, with a total nominal value of Rp 4,953,110,830,000 [61] - The shareholder composition shows that the Government of the Republic of Indonesia holds 52.09% of the shares, while the public holds 47.91% [61] - Telkomsel's authorized capital is 650,000 shares with a nominal value of Rp 1,000,000 per share, totaling Rp 650,000,000,000 [71] - The issued and paid-up capital for Telkomsel is 182,570 shares, with a total nominal value of Rp 182,570,000,000 [71] - The ownership structure of Telkomsel indicates that the Company owns 65% of Telkomsel's total issued and paid-up capital [76] - The Company's ownership percentage in Telkomsel increased from 65.00% to 69.90% post spin-off [96][97] - The total equity of the company after the spin-off was reported at IDR 151,975 billion [94] Future Projections - The service fee from the Wholesale Agreement (WSA) is projected to be Rp 18,747,341,007,230 (approximately $1.2 billion) based on revenue from the IndiHome Business Segment for the period of 2023 H2 to 2024 H1 [54] - The Fixed Broadband Core Transition Service Agreement (TSA-1) is estimated to generate a service fee of Rp 495,971,226,790 (approximately $32 million) during the same period [54] - The IT System Transition Service Agreement (TSA-2) is expected to yield a service fee of Rp 489,264,960,646 (approximately $31.8 million) from 2023 H2 to 2025 H1 [54] - Telkomsel will issue 33,300 new shares to the Company as part of the spin-off transaction [36] - Singtel will inject capital amounting to Rp 2,713,081,886,064 (approximately $175 million) by subscribing for 1,551 new shares in Telkomsel [36] - The transaction price is within the upper limit of the fairness range of 7.5% of market value, indicating the transaction is fair [126]