dtac reports strong net profit growth in the first quarter of 2018, driven by huge improvement in EBITDA margin, which increased sharply by 8.9 percentage points from the same period last year to 43.8% in Q1-18.
Service revenues excluding IC declined slightly by 1.1% amid intense competition in the wireless service market. Postpaid revenue growth remained solid, while prepaid growth was under challenges.
dtac launched the ‘Jai-dee’ campaign to strengthen best value position and leveraged dtac reward loyalty program to retain and attract customers.
At the end of Q1-18, total subscriber base stood at 21.8 million, approximately 98% of which registered under DTN, a subsidiary holding the 2.1GHz license from NBTC.
dtac continued to densify 2100MHz network, and increased number of towers and 4G base stations in order to prepare for the end of concession in September 2018.
Regardless of timeline of the auction for the concession spectrums, to be arranged by the NBTC, dtac expects to continue providing uninterrupted mobile services to its customer base.
With the partnership with TOT to provide 2300MHz wireless services, dtac will have access to widest 4G spectrum bandwidth in the market and get a big data capacity boost, which will enhance customers’ mobile internet experience on dtac network.
Overall network coverage stood at 94% of total population. In Q1-18, number of 4G subscribers and 4G-enabled device penetration continued to grow to 8.5 million and 55%, respectively.
Despite the decline in total revenue, EBITDA in Q1-18 grew strongly by 21% from the same period last year to THB8.4 billion.
The strong growth in EBITDA was mainly driven by lower regulatory costs, device subsidies, and SG&A expenses, which was partly offset by higher network OPEX from the densification of the licensed network.
Net profit in Q1-18 grew 474% to THB1.3 billion as a result of strong EBITDA growth and the adjustment of provision related to disputes with CAT on revenue share.
In addition, operating cash flow (EBITDA – CAPEX) in Q1-18 rose sharply to THB5.8 billion. Financial ratios continued to improved, with net debt to EBITDA of 0.6x and net debt to equity of 1.7x. Cash on hand at the end of Q1-18 amounted to THB29.5 billion. dtac’s financial position is strong and flexible for future investment.
dtac maintains its financial guidance for 2018, comprising service revenues (excluding IC) of around the same level as the previous year, EBITDA margin in the range of 34% – 36%, and CAPEX of THB15 – 18 billion.
Lars Norling, dtac’s Chief Executive Officer, said “I am pleased to report strong financial results for the first quarter of 2018, one of the most important years in dtac’s history.
As we are approaching the end of the concession, we have greatly reduced business uncertainty by securing additional spectrum through a partnership agreement with TOT on 2300MHz wireless services.
Furthermore, we are also in a discussion with CAT on a long-term lease agreement for access to concession assets and expect to conclude the agreement before the end of the concession.
Despite the uncertainty on the timeline of the auction for concession spectrums, we are confident that we will be able to provide uninterrupted mobile services to our customers during the transition period.”