Bangkok--Nov 14--True Corporation
- True EBITDA improves, revenue decline eases
- Consumer Broadband subscriber net adds accelerated compared with Q2, revenue more than doubles in 9M05
- Further improvement in TA Orange net adds expected in Q4; ARPU from Q1, 2006
- UBC acquisition major step forward in support of True’s convergence strategy
True Corporation PLC (SET:TRUE) reported Q3 results with increase in EBITDA and ease of revenue decline as subscriber net adds and ARPU at wireless subsidiary TA Orange bottomed out during July and improved slightly during the rest of the third quarter.
The decline in True’s consolidated service revenue eased to 2.9 percent Q-on-Q during the third quarter to Bt 10.0 bn (from a 5.9 percent decline in Q2). EBITDA improved by 1.9 percent to Bt 3.9 bn (from a 14.2 percent decline in Q2) due to reduced selling and promotion expenses at TA Orange, and increased 20.2 percent Y-on-Y.
Further improvement is expected in TA Orange net adds in Q4 and in ARPU from Q1, 2006 after low tariff plans signed in Q2 expire in December. TA Orange is expected to achieve its year-end subscriber target of 4.2 mn and breakeven is expected in Q1, 2006, assuming stable pricing.
True reported a reduced net loss of Bt 732 mn for the quarter (from Bt 964 mn in Q2), due mainly to a foreign exchange gain.
TA Orange service revenue declined by 8.1 percent Q-on-Q to Bt 4.4 bn, easing back from a 10.9 percent decline in Q2. Year-on-Year, service revenue increased 24.6 percent. EBITDA contribution increased 9.0 percent to Bt 1.2 bn and EBITDA margin improved to 27 percent (from 21 percent in Q2). TA Orange added 36,789 subscribers in Q3, bringing total subscribers to 4.1 mn.
Subscribers are responding strongly to TA Orange’s non-voice services, which contributed 6.7 percent of TA Orange revenue in Q3 (from 5 percent in Q2). Over 20 percent of subscribers have signed up to the ‘Color Ring’ ring-back tone service in its first eight months.
Consumer Broadband enjoyed further strong growth, with revenue increasing 5.8 percent during the third quarter to Bt 499 mn and more than doubling (up 237 percent) during the first nine months to Bt 1.4 bn. ARPU stabilized at Bt 739. Subscriber net adds accelerated to 49,731 (compared with 36,394 in Q2) bringing the subscriber base to 294,713, and an estimated market share of 85 percent.
True President and CEO Supachai Chearavanont said the company would continue to focus on its high growth TA Orange and Consumer Broadband, Data and Internet businesses, while maintaining cost control at its core fixed line business.
“TA Orange will take advantage of expansion in network capacity and coverage to grow its subscriber base in the BMA and upcountry. It will continue to differentiate itself on ‘best value, best buy’, and by providing a growing range of non-voice content and services. With a subscriber profile dominated by young early adopters, we see strong growth potential in non-voice services.
On November 4, True’s Board of Directors agreed to buy the 30.6 percent stake of MIH in UBC, which will trigger a tender offer for the remaining 29.3 percent of shares in the pay TV company held by public. In addition the Board agreed to buy MIH’s all shares in MKSC, which owns 40 percent stake in the Internet provider KSC.
Shareholders of True and UBC will meet on December 13, 2005 to vote on the planned buyout and delisting of UBC, which is expected to take place early in 2006, provided all approvals are given.
Mr. Supachai said the acquisition would help bring to fruition True’s vision to become a fully-integrated communications solutions provider, lifestyle enabler, and convergence as well as a triple player with market leadership in voice, data, and video.
“The planned buyout of UBC means True will be in a strong position to spearhead the convergence of broadband and cable TV in Thailand, in line with global technology trends.”
“Data, content and non voice services are the biggest growth areas in our business and this acquisition would give us the potential to grow even more rapidly as it will expand our network and subscriber base at the same time as helping us to provide better content.”
“The launch of the trueworld.net portal during the quarter was another important building block in True’s strategy to provide subscribers with integrated content and services across a range of platforms, and will fuel further subscriber growth with content sourced from major music labels, publishers and sports clubs.
Chief Financial Officer Mr William Harris said True remained committed to deleveraging, with repayment of Bt 1.2 bn of debt in Q3, bringing total debt repayment to Bt 2.7 bn in the first nine months. The consolidated net debt to EBITDA ratio during the first nine months stood at 4.8 times compared to 6.0 times for 2004.
“True’s cash balance remains sufficient to fund planned Capex for the remainder of the year, with the company finishing the quarter with a consolidated cash balance of Bt 6.5 bn, of which Bt 2.3 bn was at TA Orange.”
For more information contact:
TRUE PR
Pimolpan/Sisadhi/Nawanooch
Tel: 0-2699-2772, 0-2643—2463 End.