Total Access Communication PLC. or dtac reported performance for Q120 with year-on-year growth in quarterly service revenues excluding IC and net profit, but with a revenue decline quarter-on-quarter due to an impact from COVID-19 situation in the second half of the quarter.
Sharad Merohtra, dtac’s Chief Executive Officer, said “Our performance pre-COVID was in line with our targets and ambitions. However, the outbreak affected us mainly on tourist, acquisition and outbound roaming. The early signs of economic distress are also leading to spending optimization across customer segments. We are taking actions to mitigate the impact, while leveraging opportunity to accelerate digitization and continuing to strengthen our network towards 5G. The situation is changing rapidly and we will be adapting accordingly in order to connect our customers to what matters most.”
At the end of Q120, total subscriber base stood at 19.6 million with a subscriber loss of 1.0 million during the quarter from a decline in prepaid from aggressive competition and COVID-19 situation, and a decline in postpaid from one-time clean-up. Service revenues excluding IC for Q120 dropped 1.6% QoQ but increased 2.6% YoY while core service revenues for Q120 reduced 0.9% QoQ but increased 4.8% YoY, driven by continued momentum in postpaid segment as well as growth in B2B. EBITDA grew 4.5% QoQ from one-off items in Q419 and 4.5% YoY from better SG&A development. Net profit for Q120 amounted to THB 1.5 billion, developing in line with EBITDA.
Dilip Pal, dtac’s Chief Financial Officer, said “We continued year-on-year growth in service revenues excluding IC and year-on-year growth in core service revenues (defined by bundle of voice and data service revenues) in Q120. However, there was a decline in prepaid revenue, significant decline in gross adds for both prepaid & postpaid, and postpaid revenue drop in the second half of the quarter from an unprecedented COVID-19 situation. This led to a revenue drop QoQ in Q120. With topline pressure, we have to put more emphasis on rationalizing our CAPEX and OPEX plan for this year.”
While the immediate short-term will be challenging, looking ahead, dtac sees there are opportunities including fast coming back of tourism as well as migrant, reduction in rotational churn and poor quality sales, opportunity to optimize device subsidy, and increased use of self-service and digital channels. However, as long-term impact remains unclear, dtac aims to put more focus on cash flow protection including optimization of discretionary spending and CAPEX. New guidance for 2020 will be given once dtac is more certain on the situation. The medium-term ambition as communicated in the Capital Markets Day still remains valid.
Key financial indicators in Q120 (Post-TFRS 15 & 16)
Service revenue excluding IC – THB 15.3 billion, declining 1.6% QoQ but increasing 2.6% YoY
EBITDA – THB 7.7 billion, increasing 4.5% QoQ and YoY
EBITDA margin (normalized) – 43.7%
Net profit – THB 1.5 billion, growing in line with EBITDA