TRUE REPORTS SERVICE REVENUE GROWTH IN 1Q10 TRUEMOVE GROWTH TREND CONTINUES
BANGKOK, May 14, 2010 - True Corporation PLC (SET: TRUE) reported Y-on-Y service revenue growth in the first quarter while on a Q-on-Q basis, EBITDA and EBITDA margin grew from cost decreases and higher net IC gain. TrueMove’s growth trend continued while a new convergence promotion helped lift Broadband revenue and net adds. Performance at TrueVisions was softer, although the upselling rate rose further and advertising revenues started to pick up.
First-quarter consolidated service revenue, excluding interconnection charges or IC, increased 1.2% Y-on-Y to Baht 13.3 billion, mainly on growth at TrueMove and TrueOnline. Q-on-Q EBITDA rose 7.4% to Baht 5.0 billion while EBITDA margin improved to 35.1% from 31.6%, benefiting from the recovery in margins in all business segments. Group net income from ongoing operations (NIOGO) increased from the previous quarter to Baht 411 million (excluding deferred income tax), largely from lower costs and interest expenses.
Bottom-line profit was Baht 1.2 billion in 1Q10 compared to a loss of Baht 131 million the year before, with the increase due mainly to the strong Baht.
True President and CEO Suphachai Chearavanont said, “TrueMove and TrueOnline grew as expected during the first quarter although TrueVisions’ results were softer on continued impact from unfavorable macro conditions and rising competition. For the rest of the year we will focus on TrueMove network expansion, smartphone sales and non voice. Broadband coverage and capacity will be increased in key provinces and the Bangkok outskirts. Meanwhile, a revamp of key bundling packages at TrueVisions is planned to enhance premium subscriber numbers while we will also increase our emphasis on satellite dish sales to boost the mass market subscribers.
TrueMove continued to perform well. First-quarter service revenue, excluding IC, increased 4.2% Y-on-Y to Baht 6.2 billion on a recovery in International Roaming and strong non-voice growth. EBITDA increased 5.9% Y-on-Y to Baht 2.0 billion with better net IC balance. On a Y-on-Y basis, postpaid revenue grew strongly by 14.4% with subscriber numbers up 13.8% driven by convergence packages and smartphone sales. Non-voice revenues also increased 14.0% from the same period a year ago on the ongoing popularity of mobile Internet. Meanwhile, with the launch of the Android-powered Motorola Milestone, TrueMove is the only operator to offer all three major smartphone platforms which will further support non-voice growth. TrueMove captured some 375,000 subscribers in 1Q10, pushing its total subscriber base to 16.2 million.
The growth trend in TrueOnline service revenues continued Y-on-Y (up 2.2% to Baht 6.7 billion) with Broadband and new business gains offsetting traditional voice declines. Strong response to a new Broadband convergence promotion in Q1 saw the subscriber base grow by over 27,000 to 718,000, the largest increase for several quarters, while Broadband revenue climbed 10.5% Y-on-Y to Baht 1.5 billion. True’s International Direct Dialling (IDD) service successfully increased usage among TrueMove and True fixed-line subscribers. Meanwhile, a new promotion to boost fixed-line usage is expected to help slow revenue declines.
At TrueVisions, efforts to encourage mass market subscribers to upgrade to higher packages continued to be successful with the upselling rate rising to 39.8%. However subscriber numbers decreased to 1.6 million due to continued emphasis on quality customer acquisition as well as rising competition. 1Q10 service revenue declined slightly Y-on-Y (down 0.9% to Baht 2.3 billion) with unfavorable macro conditions leading to cancellation of income-generating events such as concerts as well as premium segment churn. However, advertising started to pick up, realizing Baht 87 million in revenue for its first full quarter.
True Group continued to deleverage, long-term debt falling to Baht 67 billion, from Baht 67.5 billion the previous quarter. The net debt-to-EBITDA ratio declined significantly to 3.1 times from 3.7 times a year ago.
True Group CFO Noppadol Dej-Udom said, “Refinancing is one of our top priorities this year. We believe good liquidity in the local market will help facilitate this at TrueVisions and TrueMove and hence further improve our credit profile. Meanwhile, if the current political situation continues it will become more challenging to grow revenues and we will seek to enhance profitability through strict cost control.”