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AIS earnings in Q2 drop due to COVID-19

Q2
Mr. Somchai Lertsutiwong, CEO of Advanced Info Service Public Limited Company or AIS

AIS reported its Q2 earnings showing net profit of 7,235 million baht equal to a decline of 6.7% compared YoY, but grew 3.3% compared to Q1 as a result of strict cost control. Total revenue fell 4.1% to 42,256 million baht. The COVID-19 pandemic already hurting AIS’s Q1 revenue continued its impacts on consumer spending in Q2 especially mobile-phone usage.

On the contrary, home-broadband AIS Fibre enjoyed a huge gain of 112,200 new subscribers following consumers’ demand on home internet due to lockdown measure. AIS keeps its dividend payment of no less than 70% of net profit, equal to 3.24 baht per share which will be officially announced on 3 September 2020. The company has managed to secure approximately 35 billion baht to invest in 5G and 4G network expansion as it believes that the improved digital infrastructure will help restore Thailand’s economy.

Mr. Somchai Lertsutiwong, CEO of Advanced Info Service Public Limited Company or AIS, said, “In broad view, AIS financial performance in Q2/2020 came about in the midst of Thailand crisis from the COVID-19 pandemic following Q1. The lockdown measures, although protecting people’s health, have affected the national economy.

Telecom business felt the pinch due to huge decline in the number of tourists and travelers causing AIS shops, Serenade Club and AIS Telewiz to shut temporarily in compliance with the government. Furthermore, AIS’s subsidy in compliance with NBTC to ease the financial burden from consumers by providing free data and voice call in April and May left a dent in our mobile revenue.

The good news is home-broadband AIS Fibre enjoyed a substantial gain as a result of AIS customers’ higher demand in home internet to fulfill their work-from-home and learn-from-home. Foreseeing COVID-19 impacts, AIS has been concentrating on cost and expense management to retain our strength in cash flow, thus enabling our investment in 5G for long-term growth.”

In Q2 , AIS gross revenue totaled 42,256 million baht, equal to a 1.4% decline compared to Q1, and 4.1% decrease compared YoY. For mobile business, AIS remained its leadership having the most customers at 41 million mobile numbers comprising 9.5 million in postpaid and 31.5 million in prepaid.

AIS has gained 395,600 postpaid customers but lost 531,900 in prepaid. Such loss was the result of Sim2Fly sales loss over the government restrictions on international travelling. ARPU dropped to 239 baht per number per month. The market competition remained fierce with Fixed-Speed Unlimited packages offered by all telecom operators.

Plus, the COVID-19 pandemic has affected consumers’ lifestyles as more adults switched to work from home with children and teenagers learning online from home. As a result, data consumption has been increased 15% compared to Q1, posting an average of 17 GB per month. The number of 4G users continued to grow at 75%. Home-broadband AIS Fibre continued its strong growth having the highest number of new subscribers since its grand opening as a result of consumers’ demand in home-internet during the pandemic.

The total number of AIS Fibre subscribers increased to 1.2 million , and the gross revenue from home internet was 1,683 million baht – a growth of 22% compared YoY. Enterprise business also continued its growth as a result of the demands in business solutions, mainly data center, cloud, and ICT solutions.

Despite the impacts on revenue, AIS has been firmly concentrating on cost management and financial control. Marketing activities have been reduced significantly during the pandemic. Subsequently, AIS recorded a net profit of 7,235 million baht* equal to a 6.7% decrease compared YoY, but increase 3.3% compared to Q1.

During the first half of 2020, AIS attained 42,328 million baht in operating cash flow, enabling to keep its 2020 investment budget of approximately 35 billion baht, expand 5G and 4G network constantly, and strengthen digital infrastructure for Thailand as part of the company’s strategies to retain no.1 position in telecom industry.

Following the 5G auction last February, AIS has completed its 5G network expansion to cover all 77 provinces. The company’s achievement in EEC, Rayong, makes Thailand the first country in Southeast Asia to launch 5G commercial service at 100% full coverage in an industrial estate.

A presumptive regional leader in 5G, AIS plays an important role in attracting global investors to invest in EEC following the company’s vision announcement on “AIS 5G – Forging Thailand’s Recovery,” a unified mission utilizing 5G to restore Thailand in every dimension supported by a synergy of industry leaders in every sector to jointly drive Thailand’s economy and society sustainably.

Some of AIS joint efforts include:

• Joint venture with Saha Pattana Inter-Holding Public Limited Company or SPI, a subsidiary of Saha Group, to set up Saha Advanced Network Limited Company or SAN to provide fiber optic network and ICT infrastructure in four SPI industrial parks located in Chonburi, Prachinburi, Lampoon and Tak.

• Collaborate with Amata City to bring 5G technology and digital infrastructure to improve work efficiency at Amata City in Chonburi, paving its way to become a Smart City under “Amata Network Company Limited.”

• Develop 5G immersive experience using Augment Reality and Virtual Reality (AR/VR), create contents for tourism, and revolutionize contents for education and entertainment.

“Thai government has started to ease COVID-19 control while still maintaining tight public-health measures. Businesses are now reopening and people are accustomed to new normal. AIS has a duty to provide digital infrastructure to support and promote Thai people, businesses and society to move forward – overcoming adversities together,” Mr. Somchai concluded.