DTAC adjusts 2015 growth guidance
Total Access Communication (DTAC) has revised down its 2015 guidance on the growth of service revenue (excluding interconnection revenue) to reflect ongoing market competition and its soft performance in the first half of this year.
The company reported weaker-than-expected second-quarter performance. Its net income amounted to Bt1.375 billion in the second quarter, a sharp drop of 53 per cent year on year, due to lower EBITDA (earnings before interest, taxes, depreciation and amortisation) and higher D&A (depreciation and amortisation) expenses from network investment.
DTAC’s share price closed at Bt79.25 yesterday, down 4.52 per cent from Monday.
As the second half of this year is expected to remain challenging from a weak economy and intense competition, DTAC lowered its full-year forecast for service revenue (excluding interconnection revenue) to slightly below the 2014 level. Its service revenue last year was Bt68.275 billion.
Revenue is expected to recover with an improvement of network perception penetration, effectiveness of data monetisation and execution of a cluster-based operational model.
It has maintained capital-expenditure guidance this year at between Bt18 billion and Bt20 billion for strengthening its third- and fourth-generation network capacity and coverage nationwide. DTAC targets 2.5 million 4G users by the end of this year.
DTAC chief executive officer Lars-Ake Norling said the company continued to keep its focus on becoming the leading Internet provider in Thailand, as it sees huge potential in mobile data services.
"By the end of 2015, we aim to have a 3G footprint covering 95 per cent of the population, the fastest 4G network, and 2.5 million 4G customers and 60 per cent of our customers using data services.
Moreover, we are well prepared for the upcoming auction for 1,800MHz and 900MHz spectra in November, as scheduled by the NBTC [National Broadcasting and Telecommunications Commission]," he said.
In light of DTAC’s weak results of the second quarter, a telecom analyst has lowered his forecast of the company’s pre-exceptional profit this year by 5 per cent to Bt7.362 billion from the earlier forecast of Bt7.715 billion. He also trimmed his forecast of DTAC pre-exceptional profit next year by 3 per cent to Bt7.875 billion from more than Bt8.1 billion.
According to the analyst, DTAC’s second-quarter pre-exceptional profit dropped by 49 per cent year on year and 14 per cent below the consensus estimates. However, he expects mild improvement in performance in the second half and projects earnings growth to resume next year.
The analyst said one of DTAC’s mistakes, which the company is trying to correct, was under-investment in its network, which caused it to lose market share.
He said DTAC’s service revenue dropped 5.3 per cent year on year, steeper than expected, while its actual handset subsidy costs totalled Bt754 million, greater than forecast.
