15 July 2022 – Total Access Communication PLC., or dtac, reported continued positive momentum in subscriber acquisition in the first half of 2022. With focused network expansion, customer experience continued to improve, contributing to growth amidst a slowly improving macroeconomic situation and intensifying competition. The company continued to deliver healthy EBITDA margin in 1H22 as a result of its strategic focus on efficiency.
Sharad Mehrotra, dtac’s Chief Executive Officer, said, “The second quarter of 2022 brought slow improvement in the macroeconomic situation of Thailand, as further easing of international travel aided the return of tourists and migrants. However, challenges remain with the lingering effect from the pandemic and higher inflation impacting customers’ spending power. Competition among telecom operators continued to intensify in Q222. Despite these challenges, dtac remained focused on strategic priorities to continue delivering value for customers. We achieved 100% on our target in expanding 5G to all 77 provinces of Thailand, while continuing with low-band deployment, adding 4.6K sites in the first half of 2022. The number of 700 MHz base stations stood at 17,800 at the end of the second quarter. As a result of our efforts, we maintained a high Net Promoter Score while network complaints continued to decline, and dtac added 412,000 new subscribers in Q222.”
At the end of the first half of 2022, total subscriber base stood at 20.3 million, an increase of 412,000 QoQ. Service revenue (excluding interconnection charges) increased by 0.9% QoQ while declining by 2.5% YoY due to lower IDD revenue and aggressive competition. EBITDA for Q222 amounted to THB 8,290 million, an improvement of 15.4% QoQ and 2.8% YoY. EBITDA margin (normalized) remained healthy at 41.5% in Q222. Net profit for the second quarter of 2022 amounted to THB 1,004 million.
Nakul Sehgal, dtac’s Chief Financial Officer, said, “dtac’s strategic priority as a customer-centric challenger continues with B2B and dtac beyond as key value drivers. With focus on the SME segment, bringing solutions and connectivity propositions to our business customers and forming value-based partnerships, dtac’s aims to deliver a double-digit growth from its B2B business by year-end 2022. As of the first half of 2022, dtac business achieved a 16% YoY growth in service revenue. Growth momentum also continued from dtac beyond, which saw a 15% QoQ growth in revenue driven by a combination of growth in users and transactions. dtac continued its strategic focus on efficiency with its structural savings initiatives. In addition to quantifiable cash savings in the quarter, we delivered on an 11% reduction in OPEX in the first half of 2022.
EBITDA for Q222 improved by 15.4% QoQ, positively impacted by ~THB 1 Bn due to filter costs that are deductible from USO fees in accordance with NBTC notification for interference prevention of 900MHz spectrum and negatively impacted by one-time amalgamation related costs of ~THB 140 Mn. Net profit for the second quarter improved QoQ driven by higher EBITDA, offset by a provision of ~THB 560 Mn related to a fire incident. CAPEX for the quarter stood at THB 3,343 Mn.”
Due to the prolonged impact from the pandemic and intensifying competition, dtac revised its guidance on service revenue (excluding IC) to flat to low single digit decline for FY2022, however expects to maintain EBITDA guidance as previously communicated. Capital expenditure levels are revised to THB 11-13 billion.
Key financial indicators in Q222 (post-TFRS 15 & 16)
- Service revenue excluding IC – THB 13,921 million, improving 0.9% QoQ while declining 2.5% YoY
- EBITDA – THB 8,290 million, improving by 15.4% QoQ and grew by 2.8% YoY
- EBITDA margin (normalized) – 44%
- Net profit – THB 1,004 million