Structural efficiency initiatives leading to healthy EBITDA margin in the first quarter of 2022 for dtac while subscriber growth momentum continued despite a challenging environment

22 April 2022Total Access Communication PLC., or dtac, reported ongoing positive momentum in subscriber growth in the first three months of 2022 despite a slow macroeconomic recovery from COVID-19 and significantly aggressive competition. The company delivered on a healthy EBITDA margin in Q122 as a result of its structural efficiency initiatives while continuing focus on strategic ambitions for 2022.

Sharad Mehrotra, dtac’s Chief Executive Officer, said, “Throughout the first quarter of 2022, the impact from the COVID-19 pandemic continued to linger in Thailand as a high number of Omicron cases were registered daily, resulting in a slow macroeconomic recovery while competition among operators escalated significantly. Despite the challenging environment, dtac continued to deliver on its strategic ambitions, which have translated into improved customer experience and engagement. By prioritizing customer experience, we have undertaken the ambition to expand 5G to 77 provinces by Q322, while also accelerating low-band deployment. As of Q122, 34 provinces were covered under dtac’s 5G 700 MHz network, with over 15,600 total base stations on the 700 MHz at the end of the quarter. As a result of our efforts, we continued to maintain a high Net Promoter Score, a steady decline of customer complaints, and continued subscriber growth momentum resulting in 305,000 new subscribers in Q122.”

Mr. Mehrotra added that dtac’s ambition on strengthening itself as a beyond connectivity service provider will continue. We are leveraging on the outcome of our digital transformation and continuing to add diverse value propositions in our adjacent services portfolio, introducing offers under Gaming and Protection, while refreshing propositions on Financial Services. As a result, at the end of Q122 we witnessed subscriber growth and increased customer engagement from our beyond connectivity portfolio. In 2022, dtac will continue to explore structural efficiencies and cash savings initiatives which have already delivered a decline in reported operating expenses of 2.6% YoY in Q122.

At the end of the first quarter of 2022, total subscriber base stood at 19.9 million, an increase of 305,000 QoQ. Service revenue (excluding interconnection charges) declined by 1.4% QoQ and 2.5% YoY. EBITDA for Q122 amounted to THB 7,184 million, a 2.6% QoQ improvement and 3.9% YoY decline. EBITDA margin (normalized) was at 43.5% in Q122. Net profit for the first three months of 2022 amounted to THB 726 million.

Nakul Sehgal, dtac’s Chief Financial Officer, said, “Despite the easing of pandemic related restrictions in the country from end of Q321, the macroeconomic recovery from COVID-19 remained slow throughout the first quarter of 2022. Our topline recovery was partially affected due to increased competition among operators in the first quarter. EBITDA for Q122 improved by 2.6% QoQ driven by structural initiatives and cost optimization. Excluding amalgamation related costs, the normalized EBITDA margin remained healthy at 44.2% in Q122. Net profit for the first quarter improved QoQ due to an increase in EBITDA with Q421 being impacted by the one-time asset write-off. Excluding the impact from amalgamation related costs, net profit remained stable YoY. CAPEX for the quarter stood at THB 4,075 million, increasing by 6% QoQ and 22% YoY driven by accelerated low-band rollout and capacity expansion.”

Following the results of Q122, our guidance remains unchanged. However, due to the slow improvement in the macroeconomic situation and aggressive competition, we expect to meet the lower end of our guidance on service revenues, while EBITDA, excluding amalgamation related costs, is expected to be within range.

Key financial indicators in Q122 (post-TFRS 15 & 16)

  • Service revenue excluding IC – THB 13,796 million, declining 1.4% QoQ and 2.5% YoY
  • EBITDA – THB 7,184 million, improving by 2.6% QoQ and declining by 3.9% YoY
  • EBITDA margin (normalized) – 43.5%
  • Net profit – THB 726 million