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dtac
second quarter 2009
22 July 2009
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882
2
Disclaimer
Certain forward looking statements may be made in the course of the presentation.
These forward- looking statements generally can be identified by use of
statements that include words or phrases such as DTAC or its management
“believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words
or phrases of similar import. Similarly, statements that describe DTAC’s objectives,
plans or goals also are forward-looking statements. All such forward-looking
statements are subject to certain risks and uncertainties that could cause actual
results to differ materially from those contemplated by the relevant forward-
looking statement. The forward-looking statements contained in the slides are not
and should not be constructed as representations of the future performance of
DTAC and that such statements are an expression of the Company’s reviews based
on its current view and certain assumptions including, but not limited to, prevailing
economic and market conditions and currently available information.
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882
3
summary of second quarter
• The market was under pressure from the weak economy, domestic political
uncertainty, as well as the recent outbreak of the type-A (H1N1) flu.
• Subscriber growth further slowed down.
• Excluding international business and IC, service revenues held up quite well
despite second quarter being seasonally low.
• Despite cost improvements, EBITDA declined modestly as a result of the sharp
decline in revenues from international business and worsening IC balance.
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882
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operational highlights
Investor Relations: www.dtac.co.th
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sub base continued to expand but at a slower rate
866
681616
350 389
221
18
119
-126
96
34
164
263
777
469
780
255
884
Q108 Q208 Q308 Q408 Q109 Q209
Postpaid
Prepaid
Total
• Subscriber base continued to grow
amid weak economic condition.
• But the growth slowed down due to
shift of focus from acquisition to
retention.
• Total sub base at end of Q209:
19.2 million.
– Postpaid 2.4 million subs
– Prepaid 16.8 million subs
net adds (000 subs)
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IC ratio unchanged
67% 68% 69% 69% 71% 71%
33% 32% 31% 31% 29% 29%
Q108 Q208 Q308 Q408 Q109 Q209
on-net off-net
outgoing on:off-net traffic off-net incoming:outgoing traffic
55% 55% 55% 53% 53% 53%
45% 45% 45% 47% 47% 47%
Q108 Q208 Q308 Q408 Q109 Q209
incoming outgoing
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240 232 219 220 215
8376 68 62 59 56
262
344317 300 281 279 271
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
260 253 250 249 240
8376 68 61 58 54
284
367336 320 311 307 294
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
MOU and ARPU dropped from seasonality
• Higher average tariff partly offset the impact of slightly lower MOU on ARPU.
• Decline in blended ARPU mainly driven by prepaid segment.
• Incoming traffic from AIS and True Move continued to decline.
blended MOU
-12.4 %-4.1 %
blended ARPU
-14.6 %-3.0 %
Investor Relations: www.dtac.co.th
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410 382 398 423 418
147141 125 107 105 106
470
616552
507 506 528 524
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
postpaid – ARPU slightly up
net adds (000 subs) MOU (mins/month/sub) ARPU (bt/month/sub)
• Owing to seasonality MOU declined modestly but ARPU slightly up from higher monthly fees.
• Lower net adds reflect increased focus on subscriber quality.
-4.9 %-0.8 %
-11.2 %+ 0.9 %
596 558 511 543 548
146143
127109 107 108
669
656650620
685739815
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
3418
96
164
119
-126
Q108 Q208 Q308 Q408 Q109 Q209
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240 235 230 226 217
7468 60 55 51 47
259
333 308 295 284 277 264
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
-4.5 %
193 187 178 176 172
74 68 60 56 52 49
207
281 261 248 234 228 221
Q108 Q208 Q308 Q408 Q109 Q209
outgoing incoming
prepaid – slow down in net adds
net adds (000 subs) MOU (mins/month/sub) ARPU (bt/month/sub)
• Net adds slowed down due to shift focus from acquisition to retention.
• ARPU declined at a slower rate than MOU as calling rate inched up slightly
-14.0 % -15.6 %-3.5 %866
681616
350 389
221
Q108 Q208 Q308 Q408 Q109 Q209
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882
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financial highlights
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service revenues down 2.6% QoQ,
mainly from a sharp reduction in IR and IDD
13,470 12,746 12,786 12,720 12,981 12,674
3,9583,886 3,629 3,405 3,266 3,149
17,42816,632 16,415 16,125 16,247 15,823
Q108 Q208 Q308 Q408 Q109 Q209
Service revenue IC revenue
13.0%
3.4% 4.4%
20.1%
14.4%
44.6%
23.4%10.5%
3.3% 4.5%
14.0%
44.2%
13.4%2.6%3.9%
19.9%
14.3%
46.0%
service revenues (THB million)
-4.9 %
-2.6 %
Postpaid airtime
Prepaid airtime
InterconnectionVASInternational
Roaming (IR)Others
Q209Q109 Q208
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QoQ Revenue change illustrated
16,501
16,029
Q109 Lower Inbound
Roaming / IDD
Lower Domestic
revenues
Lower IC Higher outbound
roaming
Higher Other Q209
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3,551
3,396 3,404
3,481
3,619
3,404
Q108 Q208 Q308 Q408 Q109 Q209
… resulted in lower regulatory cost
+0.2 %-5.9 %
revenue share & numbering fee (THB million)
• Regulatory cost declined QoQ due to
lower service revenues and one-time
adjustment on provision for numbering
fee dispute with CAT in Q109.
• Excluding the one-time provision in
Q109, regulatory cost declined 1.3%.
Note: Comprise revenue share to CAT and numbering fee to NTC
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1,798 1,7411,922 1,922
1,795 1,735
Q108 Q208 Q308 Q408 Q109 Q209
Network OPEX Others
declining prepaid voucher cost and network OPEX
network OPEX and other cost of services
Note: Other CoS consists mainly of prepaid voucher, roaming & IDD
charges, and others.
-0.3 %
-3.3 %
9,017
549
Q208 Q109 Q209
No. of new sites 128 42
Total sites on air 9,829 9,871
• Network OPEX slightly increased YoY due to
higher no. of cell sites, but declined
moderately QoQ.
• Other CoS declined from lower prepaid
voucher cost, and lower roaming and IDD
charges.
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2,549 2,509 2,554
2,8212,705 2,649
14.4% 14.9% 15.3%17.2% 16.4% 16.5%
Q108 Q208 Q308 Q408 Q109 Q209
SG&A SG&A of total rev
reduction in selling & marketing was offset by rental increase
SG&A excl. A&D (THB million)
+ 5.6 %
SG&A excl. A&D as % of total revenues
4.5%5.3%
4.5%
5.7%5.1%
4.7%
9.9%9.5%
9.9%
11.3% 11.3%12.0%
5.3%5.9%
5.1%4.5%
5.8%
3.9%
Q108 Q208 Q308 Q408 Q109 Q209
S&M of total rev. Prov for doubtful account
Admin excl A&D of total rev
-2.1 %
Note : SG&A include impairment of goodwill & intangible asset. Note : Provision for doubtful account is in percentage to postpaid
revenue.
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2,149 2,1702,335
2,476 2,4102,571
Q108 Q208 Q308 Q408 Q109 Q209
A&D - cost of service A&D - SG&A
increase A&D (SG&A) from HQ renovation & IT system
A&D - deferred right, PPE, and SG&A
+18.5 %
+6.7 % • A&D – cost of service slightly up.
• A&D – SG&A increased from relocation
to new HQ and investment in IT system.
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4,7724,8204,465
5,130
7,879
5,7205,458
Q108 Q208 Q308 Q408 Q109 Q209
EBITDA EBITDA ex DPC EBITDA margin ex DPC
30.3%
27.0%29.1%
32.1%32.2%
29.6%
EBITDA margin improved QoQ
EBITDA (THB million)
-12.6 % (excl DPC )
- 1.0 %
net profit (THB million)
1,3641,4701,2391,836
3,905
2,346 2,053
Q108 Q208 Q308 Q408 Q109 Q209
Net Profit Net Profit ex DPC
-7.2 %-33.6 % (excl. DPC )
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QoQ EBITDA change illustrated
4,820 4,772
Q109 Lower
IR/IDD
Lower
domestic &
other
revenues
Higher net
IC cost
Increase
admin
Lower COS Lower S&M Lower Prov
bad debt
Numbering
fee effect
Other items Q209
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healthy operating free cash flow
• Slightly higher CAPEX compared to last
quarter.
• Target free cash flow of THB 12 billion is
maintained.
Operating free cash flow (THB billion)
5.7
7.9
5.1
4.54.8 4.8
2.22.6 2.6
1.51.3
3.93.5
5.3
1.9
3.5 3.3
1.3
Q108 Q208 Q308 Q408 Q109 Q209
EBITDA Capex Operating FCF
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ample liquidity for repayment & 3G auction
54.6
63.172.8 67.8 67.7
61.6
11.112.712.7
12.211.59.6
0.60.70.90.60.81.2
0.20.30.40.20.30.4
Q108 Q208 Q308 Q408 Q109 Q209
FFO to Total Debt (%)
Interest Coverage
Ratio
Net debt to EBITDA
Net debt to Equity
interest-bearing debt (THB billion) financial ratios
debt maturity profile (THB billion)
• Cash on hand of THB 15.2 billion (incl
short-term investment).
• Undrawn committed facilities of
THB 6.0 billion.
35.9 35.1
28.9 28.1 27.4 26.5
Q108 Q208 Q308 Q408 Q109 Q209
3.7
5.87.2
6.5
3.3
Q309 Q409 2010 2011 2012-2015
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regulatory updates & other issues
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• HQ relocation completed.
• Non-commercial trial of 3G on 850 MHz to be launched in
Q309.others
• On Access Charge case, we have not been served with TOT’s
plaint of the Admin Court.
• IC rate recommendation by DRC has not been endorsed by NTC.
• We are in the process of filing disputes on IC agreement with
True and TT&T before NTC.
• NTC intends plans 3G auction by the end of 2009.
• NTC targets to publish the MNP regulation in Q309.
regulatory
regulatory updates & other issues
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business direction 2009
• Focus on retention & quality of new subs by using
segmentation approach.
retention &
usage stimulation
• CAPEX significantly lower than in 2008.
• Cost efficiency programs – target THB 2 billion OPEX
reduction by year end 2010.
cost control
preparation for
3G
• Prepare for 3G auction, which is expected to take place by
year end 2009.
• Revise dividend policy when financial implications from 3G are
available.
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outlook for 2009
• 3 – 4 million net adds for the industry.
• dtac expects to maintain market share.
• Approximately THB 12 billion.operating free cash flow
net adds
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income statement
-65.1%3,905-7.2%1,4701,364Net profit
-33.6%2,053-7.2%1,4701,364Net profit ex. DPC
-64.1%1,322-8.9%521474Income tax
-61.1%5,751-7.2%2,4112,238EBIT
-23.8%
-16.7pp
-2.5pp
-39.4%
+5.2%
-7.1%
-5.0%
-0.6%
-19.0%
YoYQ209 Q109 QoQ Q208
Service revenues (w/o IC)
IC revenues
12,674
3,149
12,981
3,266
-2.4%
-3.6%
12,746
3,886
Total revenues 16,029 16,501 -2.9% 16,880
Operating Costs (w/o IC)
IC Costs
10,416
3,469
10,618
3,538
-1.9%
-1.9%
9,957
3,734
EBITDA 4,772 4,820 -1.0% 7,879
EBITDA margin
EBITDA margin (excl. DPC)
29.6% 29.1% +0.5pp 46.3%
32.1%
Financial Costs 399 421 -5.2% 523
THB million
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registered vs active subs (in million)
18.119.2
20.220.9 21.1 21.5
16.7 17.4 18.2 18.7 18.9 19.2
Q108 Q208 Q308 Q408 Q109 Q209
registered subs active subs