State-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) plans to up its capital expenditure (capex) this year as part of an ambitious plan to become a key player in the Asia-Pacific region.
Telkom president director Alex J. Sinaga said that with a lower dividend payout ratio this year, Telkom was ready to expand vigorously.
“With a dividend payout ratio of 60 percent this year, we are expecting to be more aggressive,” he said after the company’s annual shareholders meeting on Friday.
Telkom’s dividend payout ratio was 70 percent last year.
Under the specified ratio, Telkom will disburse Rp8.76 trillion (US$682.2 million), 60 percent of its Rp14.6 trillion net profit last year, to its shareholders.
Last year, the firm paid Rp9.9 trillion, 70 percent of its Rp14.2 trillion net profit in 2013, to its shareholders.
Telkom is now 53.14 percent owned by the government and 46.86 percent owned by the investing public, including Singapore Telecommunications Ltd., according to information published on Telkom’s website.
Alex said that with the lower dividend payment, his company would increase its capex this year to between 25 and 30 percent of last year’s total revenues—up from its initial allocation of around 22 to 25 percent.
“I can be pretty sure that it will be above 25 percent,” he said of the company’s capex-to-revenue ratio.
Telkom booked Rp89.7 trillion in revenue last year, with data, Internet and IT services making up 42 percent of the total revenue.
The company’s finance director Heri Sunaryadi said that Telkom would issue bonds to finance part of its capex this year, adding that it would disclose detailed information in the second week of May.
“We’ve appointed Bahana Securities, Danareksa Sekuritas, Mandiri Sekuritas and Trimegah Securities as the underwriters,” he told reporters.
It had previously been reported that Telkom would issue sustaining bonds worth Rp12 trillion, with the first round of issuance to be carried out this year to reap between Rp4 and Rp6 trillion.
Alex said that from the total allotted capex, 60 percent would be for Telkom’s cellular business—PT Telekomunikasi Selular (Telkomsel)—to develop mobile broadband, 30 percent for its broadband network and the remaining 10 percent for its other business lines.
Telkom has around 32 subsidiaries, operating in fields from telecommunications to property.
The company’s other focus this year would be on expanding its international presence, Alex said.
“Our vision is to become a global player, particularly in the Asia-Pacific region,” he said.
Since the first quarter of this year, Telkom had been searching for opportunities to expand its business into new countries, he went on.
The state-owned company currently has a presence in 10 foreign countries and cities, namely Singapore, Hong Kong, Timor Leste, Australia, Myanmar, Malaysia, Taiwan, Macau, the US and Saudi Arabia.
Telkom is looking to maintain its double-digit growth, aiming for a total Rp100 trillion this year. (Khoirul Amin, The Jakarta Post)