Bangkok--17 Aug--PR Focus
TRUE REPORTS HIGHER GROUP REVENUE FOR 2Q11 DRIVEN BY RECORD BROADBAND GROWTH AND STRONG MOBILE NON-VOICE PERFORMANCE
True Corporation PLC (SET: True) posted higher revenue for the second quarter of 2011. TrueOnline reported record Broadband revenue growth and the Wireless Group rose with the consolidation of the Hutch business and Y-on-Y revenue growth at TrueMove. Overall performance at TrueVisions was stable.
Consolidated Q2 service revenue excluding interconnection charges (IC) rose 11.1% Y-on-Y to Baht 14.1 billion mainly from the consolidation of the Hutch business and strong growth in Broadband and mobile non-voice revenues. EBITDA increased 5.3% Y-on-Y to Baht 4.7 billion on improved performance at TrueOnline and TrueMove. Q-on-Q, service revenue and EBITDA softened mainly on seasonality at TrueMove.
Net income from ongoing operations (NIOGO) excluding deferred income tax declined to a loss of Baht 187 million, mainly due to higher costs related to the Hutch acquisition. A mark-to-market FX loss saw bottom line performance fall to a loss of Baht 1.25 billion.
Meanwhile, a survey conducted in July 2011 showed that the True Convergence Index of households using two or more True services rose 3.5% from a year ago to 2.5 million.
True President and CEO Suphachai Chearavanont said, “Several key factors drove our solid revenue growth in Q2, such as the consolidation of the Hutch business, record results for Broadband revenue and strong performance in non-voice revenue at TrueMove, supported by rising sales of smartphones and smartphone packages.
“Investment in Hutch to expand CAT’s 3G+ reseller service under the TrueMove H brand will help the Wireless Group grow continuously and strengthen its competitiveness in the market. At the same time, TrueOnline’s investment in the Broadband network using DOCSIS 3.0 technology to reach more than 2 million households will support rapid business growth. Moreover, this technology will significantly drive the TrueVisions’ business into the HDTV and Internet TV era.
“TrueVisions also plans to upgrade the set top boxes to MPEG-4 technology which will support HD content and prevent illegal signal decoding. These three key developments will not only allow us to deliver complete convergence services, but will also serve as an important technological foundation for True Group to grow strongly over the next five years.”
At the Wireless Group, which includes TrueMove, TrueMove H and Hutch, service revenue excluding IC increased 21.4% Y-on-Y to Baht 6.8 billion mainly on the Hutch consolidation and growth in non-voice and postpaid revenues.
TrueMove service revenue excluding IC increased 4.7% Y-on-Y to Baht 5.9 billion driven by impressive growth in postpaid (19.0% Y-on-Y, 5.5% Q-on-Q) and non-voice (34.7% Y-on-Y, 4.0% Q-on-Q) revenues, supported by rising smartphone sales and the widespread adoption of social media.
Prepaid revenue remained soft mainly from competition in on-net promotions which started in 2Q10. However, all-net promotions and provincial network expansion spurred a recovery in June.
Postpaid net adds at TrueMove were very strong at 46,000 (of the total 261,000 net adds), compared with 26,000 in Q1. This was mainly driven by the rising popularity of TrueMove’s smartphone packages. Wireless Group subscribers totaled 18.5 million at the end of Q2.
TrueOnline service revenue grew 3.0% Y-on-Y to Baht 6.6 billion, as new Ultra hi-speed Internet packages delivered record Broadband revenue growth (14.6% Y-on-Y, 2.9% Q-on-Q). During Q2, download speeds were increased to 7 Mbps for the standard Broadband service and 8 Mbps for the Wi-Fi network (compared with an industry standard of 2-4 Mbps). Wi-Fi hotspots were expanded to more than 30,000 from 21,000. TrueOnline posted 40,000 Broadband net adds in Q2, broadening its subscriber base to 1.25 million.
TrueVisions service revenue was stable Y-on-Y at Baht 2.3 billion as advertising revenue growth was offset by lower subscription revenue due to competition and piracy. Q-on-Q, service revenue declined from seasonality with the end of the 2010/11 English Premier League season in May. Mass-market expansion increased advertising revenue Y-on-Y to Baht 143 million. Meanwhile, overall subscriber numbers were maintained at 1.7 million.
True Group repaid Baht 4.0 billion of long-term debt, excluding financial leases, during the first half of 2011. This brought the long-term debt balance down slightly to Baht 66 billion.
The Baht 13.1 billion raised from the Q2 rights offering, which was 110.5% oversubscribed, will primarily finance the expansion of True Move H 3G services.
TrueGroup CFO Noppadol Dej-Udom said, “While we expect EBITDA to be pressured by the continued expansion of new businesses including 3G, DOCSIS 3.0 and HDTV — a normal outcome for any company at this stage of its business cycle — these developments will provide us with new opportunities and help improve our long-term profitability and share price performance. In addition, the fact that our rights offering in Q2 was oversubscribed is testament to the market’s confidence in our long-term prospects.”