Subject: Submission of the Interim Financial Information for Q3/2020
Enclosure:
1.
A Set of the Reviewed Interim Financial Information for Q3/2020
(Thai / English)
2.
A Set of the Management's Discussion and Analysis for Q3/2020
(Thai / English)
True Corporation Public Company Limited (the "Company") would like to submit a reviewed interim consolidated and separate financial information for the third quarter ending 30th September 2020 to the Stock Exchange of Thailand.
The Company reported a consolidated net profit to equity holders of the Company of Baht 104.15 million for the third quarter of the Year 2020, representing a change of greater than 20 percent compared with the net results of the same period in the last year. Please see further details in the Management's Discussion and Analysis for Q3/2020 as attached herewith.
Please be informed accordingly.
Respectfully yours,
- Signature -
(Ms. Yupa Leewongcharoen)
Group Chief Financial Officer
Management's Discussion and Analysis
Overview
True Group maintained the topline with service revenue of Baht 26.5 billion in 3Q20 and Baht 79.7 billion in 9M20 as core service revenue grew 4% YoY amid the prolonged impact from COVID-19 outbreak and economy lowering overall domestic spending and tourist arrivals. Continued cost discipline, resulting in declining trend of core operating expenses, together with the Group's growing digital ecosystem boosted EBITDA up 19% YoY, 2% QoQ to Baht 9.4 billion in the third quarter, or increased 30% YoY to Baht 13.4 billion including the effect of the new accounting standard (TFRS16). True Group reported EBITDA of Baht
billion, aligning with net operating cash flows of Baht 38.6 billion, and net profit of Baht
billion in the first 9 months of 2020. The Group is implementing an aggressive array of major cost and productivity initiatives to significantly enhance margin and financial health with sustainable profitability.
Although consumers' spending and behavior has been affected by weakened economic situation and the pandemic, this challenge has created the new normal lifestyles that should boost growth potential for True Group as consumers and businesses become more digitized as proven with continued escalation of digital transactions and behavior as well as growing demand for broadband connectivity. True Group is in a prime position to ride on significant growth potential of the New S-Curve capitalizing on its comprehensive digital platform and ecosystem as proven with its solid growth record alongside technological changes like the past 3G and 4G era and should continue in upcoming 5G. At the same time, the Group will continue to focus on digital sales and services to increase its competitive strengths and accelerate scale further.
TrueMove H continued to grow its postpaid base with industry's highest postpaid net adds of 269k in Q3 driving postpaid revenue up in double-digit rate from the same period last year. The effect from economy and COVID-19 on consumer spending as well as loss of foreign travelers, however, pressured prepaid and international roaming revenues, the same trend as the overall industry whose competitive landscape was relatively stable with unlimited data offerings as key attractions. TrueMove H recorded service revenue of Baht 19.9 billion in 3Q20 boosting its 9-month service revenue up 4% YoY to Baht 60.2 billion. The business ended the third quarter with total customer base of 30.1 million, of which 20.8 million were prepaid and 9.3 million were postpaid. TrueMove H will continue to place importance on network and service quality, adding on value-driven contents while the 5G commercial launch with its 5G network strength catalyzed by rising adoption and 5G devices, more premium models expected in coming quarters, should contribute to TrueMove H's growth amid high penetrated mobile market.
The broadband internet market continued to expand given positive momentum from the new normal but remained competitive with operators highlighting speed and device while also providing affordable packages to capture larger growth. TrueOnline maintained its broadband leadership proven with continued solid net adds of 111k increasing its total broadband subscriber base to 4.1 million. This drove its broadband internet revenue up 3% to Baht 6.8 billion in 3Q20 and up 4% to Baht 20.0 billion in 9M20 compared to the same period last year. Enhancing customer's internet experience via value-driven products and innovation has been key strategy for TrueOnline. These include Gigatex Fiber Router and Mesh Wifi, band steering technology that combines all WiFi frequency bands and chooses the best signal automatically, speed boost and service upgrade especially with benefits from True Card. These, together with rising demand for broadband connectivity, should boost
1
growth with revenue upside.
TrueVisions' service revenue was Baht 7.9 billion in 9M20 and Baht 2.6 billion in 3Q20 with core subscription revenues picking up in the third quarter as the prolonged COVID-19 impact on the business has stabilized along with premium subscriptions resuming growth and positive momentum of domestic tourism recovery. The progress toward online, customized and A-la-Carte packages that respond to the evolving preferences of Thai consumers, and rising contribution from influencer revenues should boost growth for TrueVisions going forward. TrueVisions ended the third quarter with total customer base of 4.0 million underpinned by 4% QoQ growth of premium customer base and continued increase of mass subscribers.
The Group's digital related businesses continued to expand with revenues from digital content subscription and advertising growing in double-digit rates. TrueID reached the new high for content transaction at 311,000 transactions, representing 18% growth from the previous quarter, and 240 million monthly video views in the third quarter. TrueID TV further expanded with approximately 1.8 million TrueID TV boxes at customers' premises, widening cross selling potential for subscribing additional products of True Group along with enhancing customers' engagements via privilege campaigns under TrueYou. In the enterprise segment, True Digital Solutions sustained solid growth connecting over 281,000 IoT endpoints and devices by the end of Q3. The business further introduced Smart Living solutions for consumer market such as Home Center application, Home IoT sensors, and other homecare devices to accelerate growth in this segment.
3Q20 Financial Summary
True Group reported a consolidated net profit to shareholders of the parent company of Baht
104.2 million in 3Q20, representing a change of greater than 20% YoY, which is summarized as below:
Consolidated service revenue was Baht 26.5 billion in 3Q20, flat from the same period last year, and Baht 79.7 billion (+1.4%YoY) in 9M20 amid the prolonged COVID-19 and economy impact. This was driven by higher postpaid and broadband internet subscriber base. At the same time, True Group continued to optimize its cost structure which resulted in EBITDA growing 19% YoY to Baht 9.4 billion in the third quarter, or increased 30% YoY to Baht 13.4 billion including the effect of the new accounting standard (TFRS16). In the first nine months of 2020, EBITDA increased to Baht 38.6 billion.
Net profit declined YoY to Baht 104.2 million in 3Q20 and Baht 1.2 billion in 9M20 driven by higher depreciation and amortization expenses following continued network expansion and spectrum acquisition, TFRS16 adoption this year, and the gain from asset sale to DIF in 3Q19.
2
Consolidated Results of Operations - Normalized Basis
3Q20
2Q20
3Q19
% Change
9M20
9M19
% Change
(Baht in millions unless otherwise indicated)
Y-o-Y
Q-o-Q
Y-o-Y
Revenues from providing services
30,011
30,135
30,378
(1.2)
(0.4)
90,207
90,139
0.1
Interconnection revenue
405
389
723
(43.9)
4.3
1,183
2,387
(50.5)
Network rental revenue
3,140
3,134
3,058
2.7
0.2
9,365
9,156
2.3
Service revenue
26,466
26,612
26,598
(0.5)
(0.5)
79,659
78,597
1.4
Revenues from product sales
2,997
3,743
6,357
(52.9)
(19.9)
11,523
13,123
(12.2)
Total revenues
33,008
33,878
36,735
(10.1)
(2.6)
101,730
103,263
(1.5)
Total cost of providing services
20,606
19,976
22,063
(6.6)
3.2
60,837
64,800
(6.1)
Regulatory costs
764
716
703
8.6
6.6
2,149
2,147
0.1
Interconnection cost
533
545
860
(38.0)
(2.2)
1,612
2,700
(40.3)
Cost of providing services exclude IC
10,268
10,070
14,628
(29.8)
2.0
31,211
43,076
(27.5)
Depreciation and amortization
9,041
8,645
5,872
54.0
4.6
25,865
16,877
53.3
Cost of sales
3,256
4,315
4,569
(28.7)
(24.5)
12,913
12,236
5.5
Selling and administrative expenses
6,595
6,912
6,670
(1.1)
(4.6)
20,429
19,833
3.0
Depreciation and amortization
1,759
1,741
998
76.3
1.1
5,214
2,522
106.7
Others
4,836
5,172
5,672
(14.7)
(6.5)
15,215
17,311
(12.1)
EBITDA
13,351
13,060
10,303
29.6
2.2
38,630
25,792
49.8
EBITDA excl. TFRS16 and gain from asset sale to DIF
9,376
9,225
7,910
18.5
1.6
27,059
23,399
15.6
Depreciation and amortization
(10,800)
(10,385)
(6,869)
57.2
4.0
(31,079)
(19,399)
60.2
Operating profit
2,550
2,674
3,433
(25.7)
(4.6)
7,551
6,393
18.1
Interest expense (net)
(2,323)
(2,191)
(1,929)
20.4
6.0
(6,574)
(5,232)
25.7
Interest income
66
34
78
(15.5)
92.6
244
230
6.0
Interest expense
(2,389)
(2,226)
(2,008)
19.0
7.3
(6,818)
(5,462)
24.8
Interest expense related to lease liabilities
(1,605)
(1,621)
-
NM
(1.0)
(4,861)
-
NM
Other financial fees
(225)
(250)
(77)
192.5
(10.2)
(572)
(177)
223.4
Financial cost related to license
(473)
(502)
(478)
(0.9)
(5.8)
(1,416)
(1,457)
(2.8)
Income tax (expense) revenue
(27)
(12)
(3,044)
(99.1)
117.0
(14)
(2,198)
(99.4)
Share of results in subsidiaries and associates
913
1,016
1,002
(8.8)
(10.2)
2,946
4,073
(27.7)
(Income) loss attributable to non-controlling interests
41
40
(23)
NM
3.7
118
24
385.0
Foreign exchange gain (loss)
(234)
276
(67)
(249.1)
NM
399
505
(20.8)
Other (expense) income
1,486
1,833
4,040
(63.2)
(18.9)
3,629
3,495
3.8
Net profit (loss) to equity holders of the Company
104
1,262
2,857
(96.4)
(91.7)
1,205
5,426
(77.8)
Non-controlling interests
(41)
(40)
23
NM
(3.7)
(118)
(24)
(385.0)
Net profit (loss) for the year
63
1,222
2,880
(97.8)
(94.9)
1,087
5,402
(79.9)
3
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True Corporation pcl published this content on 13 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2020 12:20:00 UTC
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