dtac reports strong performance in Q2
Total Access Communication Plc or dtac reported strong performance in the second quarter of this year as it successfully focused on customer-centric network optimisation to rebuild customers’ trust and confidence in the network resulting in a better perception and fewer complaints.
As part of the ongoing efforts, an acquisition of 700MHz through allocation in late June 2019 will provide an improvement opportunity in the near future to boost dtac’s network coverage nationwide as well as improve mobile internet experience in remote areas in addition to higher capacity for urban users.
At the end of second quarter this year, total subscriber base stood at 20.6 million with a reduction in subscriber loss of only 94k, best since the first quarter of 2016. The number of 2300MHz base stations reached 16.0k, an addition of 0.6k base stations during the quarter. In addition, 348 2100MHz base stations were added to fix coverage in existing areas.
Service revenues excluding IC for the second quarter this year increased 1.6 per cent quarter-on- quarter (QoQ), mainly driven by the removal of the unlimited prepaid acquisition package and the introduction of aggressive fixed-data volume packages at a slightly higher price, and continuous growth in postpaid. EBITDA for second quarter this year amounted to Bt6.6 billion, increasing 7.2 per cent QoQ from higher service revenues, slightly lower regulatory costs, and well controlled SG&A expenses. EBITDA margin excluding revenues from CAT lease agreements and TOT network rental in the denominator for the quarter was 36.9 per cent, an improvement of 2.2 percentage points from the previous quarter. CAPEX for the quarter was Bt2.3 billion, accounting for 15.3 per cent of service revenues.
Net profit for second quarter of this year amounted to Bt1.7 billion, increasing 20.3 per cent QoQ due to better EBITDA performance. Operating cash flow (EBITDA – CAPEX) for Q219 was positive at Bt4.2 billion. Net debt to EBITDA ratio increased to 1.8x due mainly to one-off CAT settlement and network CAPEX.
dtac’s immediate focuses are on turnaround pillars for growth comprising 1) consistent customer centric network experience, 2) winning back B2C customers, and 3) addressing B2B opportunities. dtac guided a low single-digit decline in service revenue excluding IC for the year with EBITDA in the range of Bt24 billion and Bt25 billion. Moreover, dtac plans to spend Bt13 billion and Bt15 billion of capital expenditure in 2019.
Alexandra Reich, dtac’s Chief Executive Officer, said “Our development in the second quarter of 2019 was in line with our turnaround pillars as communicated in the Capital Markets Day. dtac has been rebuilding trust and confidence in dtac network and started to see positive results in both network perception and network complaints in Q219. While the postpaid segment continued to grow with good momentum, the prepaid segment also started to show a better trend. We will continue our focus on building customer centric network and we will never stop improving.”
Dilip Pal, dtac’s Chief Financial Officer, said “We had strong financials with QoQ growth in service revenues excluding IC. Cost of services and SG&A expenses were also well under control, resulting in sequential EBITDA and net profit improvement. We also had strong operating cash flow development in this quarter with a solid financial position.”
