Bangkok--17 May--True
Strong revenue and EBITDA growth at group level
True Move revenue reaches a new peak; remains on track to meet year-end subscriber target
Wireline performance improves
Consumer broadband continues its steady growth
UBC now fully consolidated and making valuable contribution
Non-voice revenue continues to grow
Won arbitration award against TOT
Continued strong growth at cellular business True Move and the consolidation of pay-TV operator UBC helped boost the first quarter performance of True Corporation PLC (SET: TRUE).
True’s consolidated service revenue of Bt 12.9 bn was 25.2% higher than in Q405 and 18.5% higher than in Q105, while EBITDA of Bt 4.8 bn was up 24.6% on Q405 and 9.6% greater than a year ago. EBITDA margin of 35.6% was also higher Q-on-Q, driven mainly by an improvement in Wireline’s margins.
Group net profit was Bt 498 mn, explained largely by a Bt 1.3 bn foreign exchange gain. The net loss from ongoing operations fell 31.1% from the previous quarter to Bt 865 mn.
True President and CEO Supachai Chearavanont said True Move added a net 441,000 subscribers over the quarter, remaining on track to meet its full-year target of 1.2 million new subscribers and 5.7 million subscribers in total by year-end.
Buoyed by this subscriber growth, True Move’s service revenue reached a new peak of Bt 5.6 bn, 11.3% higher Q-on-Q and 3.4% higher Y-on-Y.
True Move’s EBITDA was 2.8% lower Q-on-Q. With a net loss of Bt 342 mn, True Move remains close to breakeven.
Service revenue for True’s wireline segment (including broadband/internet, fixed line telephone, data services and PCT) rose 5.3% Q-on-Q and 7.9% Y-on-Y, due largely to the growth in consumer broadband and Internet. Quarterly improvements in wireline’s EBITDA (up 17.3%) and EBITDA margin (to 45.2% from 39.9%) were also helped by lower selling and promotion expenses.
Consumer broadband subscriber growth remained steady through the quarter with basically stable ARPU. Service revenue rose 8% Q-on-Q and 49% Y-on-Y. Subscriber numbers grew by 11.5% during the quarter to 335,000. UBC was fully consolidated at the start of the quarter, putting in place the final component of True’s integrated operator strategy. UBC posted a solid performance, growing service revenue 5.8% Y-on-Y to Bt 2.0 bn. Combined with lower operating costs, this contributed to a 34.8% higher EBITDA Y-on-Y of Bt 535 mn and a higher EBITDA margin of 26%.
With a net profit of Bt 214 mn, UBC contributed a healthy free cash flow (cash flow from operations less capex) of Bt 252 mn to the Group.
“We expect to see further growth in UBC,” said Mr Supachai. “At the beginning of April we launched a mass market “UBC Knowledge (Bronze) Package” aimed at widening UBC’s subscriber base as well as increasing the household penetration of other True Group services, in line with our strategy of bundling our services wherever possible. Early indications are that this initiative is proving successful.
“With the full consolidation of UBC, and growth in consumer broadband, we are seeing an increasing portion of our revenue driven by video and data services. These now represent 28% of group revenue, compared with 11% in Q105,” said Mr Supachai.
“We expect video and data to continue to grow, building shareholder value in the long term.” Chief Financial Officer Mr William Harris said True’s balance sheet also continued to improve. Wireline’s debt fell by Bt 1.3 bn, resulting in a net debt to EBITDA ratio for wireline of 4.0 times. The consolidated net debt to EBITDA ratio also fell to 4.3 times. True’s free cash flow of Bt 974 mn was up strongly over both the quarter and the year, due to contributions from UBC and True Move.
True also made good progress on the regulatory front, said Mr Supachai. “This included the recent arbitration award in our favor against TOT regarding access charges.”