Telekomunikasi Improves in 2010

P.T. Telekomunikasi Indonesia Tbk. (TLK - Analyst Report), the largest telecom operator of Indonesia, declared solid financial results for full-year 2010. Total revenue in fiscal 2010 was $7,617 million, up 1.4% year over year. This was in huge contrast to the company’s prior forecast of a year-over-year decline of 4%-6%. This was primarily attributable to increase in Cellular revenue coupled with increase in Data, Internet & Information technology revenue and Other telecommunications services revenue.

Net income in fiscal 2010 was $1,280.5 million, up 1.2% year over year. Fiscal 2010 EPADS (Earnings per American Depository Share) was $2.80, up 1.2% year over year. The company had 95 million wireless subscribers at the end of 2010. The Indonesian wireless services market is quickly maturing as several operators are offering more or less similar services. Telekomunikasi competes fiercely with P.T. Indosat Tbk (IIT - Snapshot Report) and P.T. Excelcomindo Pratama. Despite this competitive pressure, management is now expecting its wireless subscriber base to reach 115 million in 2011.

Total operating expenses in fiscal 2010 was $5,120.8 million, up 2.8% year over year. This increase was primarily attributable to higher depreciation & amortization charges, coupled with an increase in operations, maintenance, and telecommunication services and marketing costs, partially offset by lower Personnel and general and administrative costs. Operating income is fiscal 2010 was $2,496.3 million, down 1.3% year over year.  

Telekomunikasi generated $3,080.9 million cash from operations during fiscal 2010, down 6.9% year over year. Free cash flow (cash flow from operation less capital expenditure) in fiscal 2010 was $1,421.4 million, up 37.2% year over year. At the end of fiscal 2010, Telekomunikasi had $1,081.5 million of cash & marketable securities on its balance sheet, up 17.2% year over year. Total debt was $1,809.4 million at the end of fiscal 2010, up 14.1% year over year. At the end of 2010, debt-to-capitalization ratio was 0.27 and continued to be the same year over year.

Segment wise Revenue

Fixed Lines revenue in fiscal 2010 was $1,436.2 million, down 9.4% year over year. Cellular revenue was $3,233.5 million, up 2.1% year over year. Interconnection revenue was $414.6 million, down 3.4% year over year. Data, Internet, & Information Technology Services revenue was $2,197.7 million, up 7% year over year. Network revenue was $117.5 million, down 13.1% year over year. Other Telecommunication Services revenue was $217.7 million, up 55.3% year over year.

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