Dear Esteemed Shareholders, 

Grounded in the vision to become the prominent and most innovative digital infrastructure provider in Indonesia, PT Professional Telecommunication Indonesia (“Protelindo” or “the Company”) delivered excellent results in 2023. We are grateful for this success, which enabled the Company to continue providing value to all stakeholders and shareholders throughout the year, as well as realising our contribution to equal access to digital information and communication across Indonesia. 

MACROECONOMIC REVIEW 
Increased food and oil prices as well as high inflation rates characterized global economic developments in 2023. Nevertheless, driven by strong domestic consumption, Indonesia’s economy remained strong at 5.05% yoy. Indonesia’s currency rate was stable thanks to Bank Indonesia’s decisions to raise benchmark interest rate (BI7DRR) to 5.75% in January 2023 and to 6.00% in October 2023 until the end of the year. 

At industry level, information and communication was among the sector with robust growth, accounting for 4.23% to the nation’s GDP in 2023 and grew by 7.59% yoy. The sector’s strength stems from technology adoption and development speed. As demand for dependable communication infrastructure increases, data trends show that this industry has regularly outpaced growth of the national economy. 

CHALLENGES
The Company was mindful of economic impacts to its business, especially liabilities with variable interest rates due to interest rate increases. The telecom market was also dynamic in 2023, with two operators merged as PT Indosat Ooredoo Hutchinson. For Protelindo, the merger presented new opportunities in terms of new tower construction and colocation revenue. 

STRATEGY OBJECTIVES 
Tower rental and VSAT and wireline services comprise the two business segments of the Company and its subsidiaries. As the Company’s primary decision-maker, the management monitors operating outcomes of each business unit independently to inform choices regarding resource allocation and performance evaluation based on the segments’ bottom-line achievements. 

In 2023, to become the leading multi-service infrastructure and telecoms provider, the Company maintained its focus on growing its operations by employing strategies, ranging from tower portfolio expansion to exploring new service areas. 

The Company ensured that its strategies were efficient and optimal in terms of asset utilization and revenue generation. In line with asset-light approach preferred by telecom operators, the Company has been offering colocation lease. New tower constructions were carried out using build-to-suit approach, while tower acquisition was mindful of key factors, including current and future demand, capacity, and return on capital. The Company has always strived to delivers the best services to complement the quality infrastructure that Protelindo provides to customers. 

BOARD OF DIRECTORS’ ROLE IN STRATEGY FORMULATION AND IMPLEMENTATION 
The Board of Directors formulates corporate strategies by measuring opportunities and challenges. Industry landscape and cost control are key considerations. The Board of Directors stays on top of strategy execution by carrying out quarterly assessment against objectives, identify problems or opportunities, and made necessary corrections. 

PERFORMANCE REVIEW
In 2023, the Company owned and operated 30,588 telecommunication towers and served 54,284 tenants in Indonesia. The Company also had 97,994 kilometers of fibre optic cable networks, which reached Sumatra, Java, Bali, Kalimantan, and Sulawesi. 

Tower lease as the Company’s primary business segment was able to generate gross profit of Rp6.17 trillion or equivalent to 75.09% of the Company’s gross income in 2023. The gross income of this segment was up 7.46% yoy compared to the previous year which reached Rp6.66 trillion. By customer profile, Indosat contributed the highest revenue reaching Rp4.48 trillion, followed by XL Axiata of Rp3.62 trillion and Telkomsel of Rp1.69 trillion. The contribution of the three telecommunication operators is 38%; 31%; and 12%, respectively in 2023. 

Meanwhile, gross profit from other services segment stood at Rp2.05 trillion in 2023 or grew by 40.42% yoy. The gross profit contribution of this segment to the Company’s total revenue was 24.01% in 2023 compared to 17.9% in 2022. 

In terms of assets, the Company posted 4.26% yoy growth to Rp68.39 trillion in 2023. Compared to the previous year’s total assets of Rp65.60 trillion, this increase was mainly driven by the increase in current assets and non-current assets by 21.34% yoy and 3.26% yoy to Rp4.40 trillion and Rp63.99 trillion, respectively. Meanwhile, the Company’s equity showed an increase of 14.38% yoy from Rp14.43 trillion in 2022 to Rp16.51 trillion in 2023. 

The Company’s revenue reached Rp11.74 trillion in 2023 or up 6.39% yoy. Overall, revenue growth outpaced expenses and resulted in a gross profit of Rp8.21 trillion in 2023, or higher than the previous year of Rp8.12 trillion. 

In 2023, Protelindo exercised two shelf bonds issuance, respectively in March and June. March issuance amounted to Rp2.90 trillion and June issuance amounted to Rp1.09 trillion. Moreover, Protelindo and subsidiary Iforte established a new company in June 2023, PT Iforte Energi Nusantara (IEN) (formerly PT Helios Energi Nusantara). IEN is envisioned to be a player in several strategi segments, including specialized construction projects and supply of power, gas, steam and air conditioning. 

TARGET REALISATION 
Protelindo met its 2023 targets. Our revenue of Rp11.7 trillion exceeded 2023 target. The Company also delivered EBITDA performance at Rp10.0 trillion, which exceeded 2023 target. 

OPERATING REVIEW 
In 2023, the Company retains a predominantly youthful, skilled workforce with most employees are between the ages of 31 and 40 and with undergraduate degrees. To ensure that employees’ skills are consistently relevant, the Company has organized various staff and leader-level training courses, workshops, and seminars. 

The Company’s activities have also been supported by good information technology infrastructure. In 2023, the Company integrated its servers, storage, and networks; modernized servers to enhance energy efficiency; enhanced data security and encryption; and expanded digitalization initiatives As the result, Protelindo has been enjoying higher operational efficiency and accuracy, as evident from reduced paper consumption and improved ratio of towers monitored per employee from 20:1 to 30:1. The Company also developed various applications to support business transactions. 

CORPORATE GOVERNANCE PRACTICES 
The Company’s strong corporate governance (GCG) standards are another important component in its operations. GCG standards are continuously improved through the annual GCG assessment, using self- and third-party surveys based on the ASEAN CG Scorecard. 

The Company called an Annual General Meeting of Shareholders (AGMS) on May 5, 2023 to discuss business performance for the fiscal year 2022 as part of the GCG implementation. In an AGMS, all participants have equal voting rights and opportunities to fully engage in the meeting. Based on the 2023 AGMS, there were no changes made to the composition of the Company’s Board of Directors. 

COMMITMENT TO SUSTAINABILITY 
The Company is committed to instil sustainability knowledge by educating all employees on Environmental, Social, and Governance (ESG) factors that are crucial for Protelindo’s operations. The Company also has Sustainability Framework that serves as a guideline towards achieving sustainability across its operations. A comprehensive follow-up plan was also devised and tailored to align with the diverse functions and units within the organization, ensuring that each department contributed towards the realization of the overarching sustainability goals. To understand the progress of sustainability activities, the Company monitors and evaluates its programs through internal audits consulting with stakeholders, and carrying out impact analysis. 

There were several sustainability achievements to highlight in this report. For employees, the Company aimed to provide a safe and comfortable working environment in line with applicable laws and regulations. The Company also actively engaged in servicing the community, such as by carrying out road repair, providing street lighting, repairing water channels, and contributing to the construction of worship houses as well as community sports centres. 

To improve environmental quality, the Company has converted several of its diesel generators to lithium batteries, and partnered with a third-party licensed to process hazardous and toxic wastes (B3). 

OUTLOOK 
The Company believes that the telco sector will continue to grow robust and prospective in 2024, as demand for communications access continue to increase. The sector’s landscape will be dynamic, and the Company intends to capitalize opportunities to continue growing its business. Protelindo also sees expansion potentials in valueadded services and in areas such as managed services and renewables. 

This positive outlook is underscored by Indonesia’s strong economy. Growth is projected at 5.2% and household consumption is expected to increase, which will spur industry growth including the telecom sector. Protelindo will continue to strengthen its services and grow as a leading player in its sector. 

APPRECIATION 
The Board of Commissioners’ invaluable oversight and direction, as well as the support of all shareholders, are greatly appreciated by the Company. The Company truly values each employee’s commitment and hard work. The Company also expresses gratitude to all other stakeholders and customers for their ongoing support to Protelindo, which has enabled us to grow as Indonesia’s most reliable digital infrastructure provider.

On behalf of the Board of Director