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dtac reveals reduced revenue but still makes profits

dtac

Total Access Communication PLC. or dtac reported performance for 2Q2020 with quarter-on-quarter and year-on-year decline in quarterly service revenues excluding interconnect charges as a result of full pressure from COVID-19, but with healthy growth in EBITDA and net profit driven by cost optimization capability

Sharad Mehrotra, dtac’s Chief Executive Officer, Total Access Communication PLC. or dtac said “The second quarter was marked by the peak of the COVID-19 pandemic, including a month-long shop closure and nationwide lockdown. The crisis translated into a direct impact on revenues from the tourist and migrant segments, international roaming and new acquisition, and overall decline in customer spend.

The situation has led to changing customer behavior in terms of data usage and adoption of digital channels. We took priority in connecting people through our reliable network and providing relevant offerings for the new normal, while supporting broader society through various relief initiatives. Having remained 100% operational throughout the crisis, we are now in a position to accelerate our digital transformation.”

At the end of 2Q2020, total subscriber base stood at 18.8 million with a subscriber loss of 835k during the quarter from COVID-19 situation. Subscriber loss is on account of lower acquisition due to shop closure. Monthly active user started dropping in Q1 as a result of drop in tourist. Service revenues excluding IC for 2Q2020 dropped 4.5% QoQ and 3.6% YoY while core service revenues for 2Q2020 reduced 3.3% QoQ and 1.1% YoY. EBITDA grew 5.1% QoQ and 4.2% YoY from better cost control. Net profit for 2Q2020 amounted to THB 1.9 billion, developing in line with EBITDA.

Dilip Pal, dtac’s Chief Financial Officer, Total Access Communication PLC. or dtac said “In the midst of the crisis when revenue decline was inevitable, we managed profitability growth both sequential and YoY through our cost optimization effort. With uncertainty on topline growth, we maintain our momentum on cost optimization for the rest of the year while strictly following our core approach to provide value-driven offerings and best network experience to our customers.”

The growth prospect for 2H2020 remains uncertain due to the negative economic outlook. As such, dtac provides revised guidance on service revenue excluding IC development for 2020 at a low single-digit decline, EBITDA at FY19 level, and capital expenditure of THB 8-10 billion.

Key financial indicators in 2Q2020

Service revenue excluding IC – THB 14.6 billion, declining 4.5% QoQ and 3.6% YoY
EBITDA – THB 8.1 billion, increasing 5.1% QoQ and 4.2% YoY
EBITDA margin (normalized) – 48.8%
Net profit – THB 1.9 billion