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Symphony Communication eyes funding options after slump

Sep 14. 2015
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By THE NATION

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FINANCIALLY constrained Symphony Communication is considering various funding alternatives including debentures, capital mobilisation and strategic partners, with a decision expected to be reached by the middle of next year.
President Teerarat Pantarasutra said that Symphony could seek strategic partners if its shareholders are not willing to inject more capital.
He is the second-largest shareholder with a 15.6-per-cent stake, after founder and executive chairman Kranphol Asawasuwan with a 16.3-per-cent interest. 
The company could still honour its loan covenants until next year if no new major investment comes up.
After recording double-digit growth for many years, Symphony reported revenue growth of only 3.1 per cent and a net profit drop of 35.6 per cent in the second quarter of this year. 
Symphony’s heavy investment in rolling out its optical-fibre network over the past few years has been a drag on its earnings, while sales growth began to fall below its expectations in the second quarter of this year.
Symphony’s sales have been in line with its projection in all businesses except international private leased circuits (IPLC), as its single largest customer, Total Access Communication (DTAC), decided not to renew its annual contract with the company and decided to build its own network. 
DTAC’s departure clipped Bt48 million from Symphony’s profit this year.
Other IPLC customers in Thailand and neighbouring countries have also postponed their projects, because of the economic slowdown.
The market has become more competitive with a pricing strategy initiated by a newcomer. 
Given the altered market dynamism, Symphony is reviewing customer needs and considering whether it should maintain its policy to be a “premium” network service provider guaranteeing a high 99.9-per-cent service level.
The Malaysia-Cambodia-Thailand submarine-cable project, which Symphony is helping to develop, has drawn much interest from prospective clients. They should be speeding up their decisions since the project is to commence construction this month, after some initial delays.
The company has already cut its revenue-growth projection for this year to 5 per cent from 20 per cent. Earnings before interest, depreciation and amortisation (EBITD) should be similar to last year, Kranphol said.
Pongthep Thanakijsuntorn, executive vice president for marketing and integrated marketing communication, said Symphony was pinning its hopes more on a recovery of IPLC demand from its clients in neighbouring countries rather than on domestic customers.
In April, the company expanded to a new market by providing a fibre-optic backbone and Internet network to fibre-to-home companies, which so far have attracted 3,000 home subscribers. Symphony expects the business to grow and provide a significant contribution within one year, once its fibre-to-home clients can expand their subscribers to more than 10,000.
 

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