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dtac reported THB 1.4 billion net profit Q1 2019

In Q119, dtac continued rolling out and optimizing the network after massive rollout activities in Q418. Customers’ experience and confidence in the network consistently improved after completely transitioning out of concession regime in mid-December 2018.

Furthermore, dtac launched the “Never Stop Caring” campaign to increase number of users on 2300MHz network, which provides the best mobile Internet experience.

At the end of Q119, total subscriber base stood at 20.7 million, and number of 2300MHz base stations reached 15.4k, an addition of 2.7k base stations during the quarter.

Approximately 7.8 million subscribers, or 76% of 4G subscriber base, were on 2300MHz network. Overall network coverage stood at 94% of total population.

Service revenues excluding IC for Q119 declined by 5.7% YoY, mainly driven by the decline in prepaid segment and the declining trend of revenues from international services, during the period in which dtac was rebuilding customers’ trust and confidence in the network.

Postpaid segment, however, continued to do well from prepaid-to-postpaid conversion and attractive device campaigns.

EBITDA for Q119 amounted to THB 6.1 billion, declining 27% YoY from change in the cost structure after end of the concession, i.e. lower regulatory costs, and higher costs from CAT lease expenses and TOT roaming costs; and well managed cost of services and SG&A expenses.

EBITDA margin for the quarter was 34.7%. CAPEX remained high at THB 4.4 billion, or 28% of service revenues ex. IC.

Net profit for Q119 amounted to THB 1.4 billion, increasing 7% YoY despite a decline in service revenues, and reflected the first full quarter of the new cost structure after end of the concession, including lower depreciation and amortization expenses.

However, operating cash flow (EBITDA – CAPEX) for Q119 returned to positive at THB 1.7 billion notwithstanding the ongoing expansion of the network. Moreover, financial position remained solid, with net debt to EBITDA ratio of 1.3x and cash on hand of THB 12.8 billion.

Our immediate focuses are 1) improve the network and customer experience, 2) rebuild confidence in dtac brand, and 3) continuously improve operational efficiency.

dtac expects to return to growth during 2019, with continued focus on operational efficiency. Moreover, dtac plans to spend THB 13 – 15 billion of capital expenditure in 2019.

Alexandra Reich, dtac’s Chief Executive Officer, said “In the first quarter of 2019, dtac was rebuilding trust and confidence in dtac network after end of the remedy period and massive network rollout in Q418, and started to see positive results.

Postpaid segment continues to grow well, while prepaid needs to be improved. We’ll focus on further strengthening our postpaid subscriber base and implementing segmentation approach to win back and reconnect with prepaid customers, particularly in migrant, teen, and gaming segments.”

Dilip Pal, dtac’s Chief Financial Officer, said “Although top line development was under challenges, operating performance continued to perform well.

Q119 was the first full quarter dtac was operating under a new cost structure, with lower regulatory costs and amortization of concession network, but higher costs of CAT lease expenses and TOT roaming and amortization of the 900MHz and 1800MHz spectrum licenses.

However, other underlying costs, comprising network OPEX and SG&A expenses, were well under control. Operating cash flow returned to positive after huge investment in the network in Q418. Our financial position remained strong and flexible.”

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