Shin sees profit growth despite slowdown
Play
The domestic economic slowdown has not dragged down Shin Corporation's main business, satellite communications, which involves mainly foreign markets, while its cellular flagship Advanced Info Service expects to see its income rise 5-6 per cent this year
Thommayantee Khongpoonsilp (), director of investor relations at Shin, which trades as INTUCH, said yesterday that with domestic purchasing power losing vigour, AIS, which contributes the most income to INTUCH, has cut its growth target. However, it still expects profit to grow.
Nattiya Poapongsakorn, investor relations manager at AIS, said this quarter should reveal a greater impact from fading domestic purchasing power on the company’s performance as it has more customers in the provinces where farm income has missed estimates and flooding has caused widespread problems. Such difficulties cause declines in mobile phone usage.
Local political developments have had a psychological impact and if the situation has not eased yet this quarter, the company’s performance would suffer more. However, the company continues to forecast growth of 5-6 per cent this year.
Of the company’s three-year capital expenditure budget of Bt70 billion, about Bt19 billion was mostly invested this first year for the transition from the 2G to 3G system. The remaining budget will be spent on developing the 3G network as a means to increasing the number of 3G customers who account for 40 per cent of total customers. Most of the funds come from the company’s Bt14-billion cash hoard.
It continues to maintain its 100-per-cent dividend payment policy despite its big investment plans.
Switch to 3G models
“Competition is still there but does not focus on pricing. The company’s marketing strategy focuses on promotional campaigns for customers to change their mobile phones to 3G models this year and next. This will reduce the cost of network management.
“The company’s budget for marketing rises from no more than 2 per cent to 3-3.5 per cent of total income this year. This is partly attributed to lower income in the third quarter of this year,” she said.
Bualuang Securities has revised down INTUCH’s 2013 profit by 2 per cent to Bt14.7 billion and 2014 profit by 5 per cent to Bt15.7 billion on the back of AIS’ profit cuts of 3 per cent in 2013 and 5 per cent in 2014.
.
