Earnings call transcript: True Corporation Q4 2024 misses forecasts, stock drops

True Corporation reported its fourth-quarter 2024 earnings, revealing a larger-than-expected loss and a revenue shortfall. The company’s earnings per share (EPS) came in at -0.07 USD, missing the forecast of -0.05 USD. Revenue was also below expectations, totaling 46.2 million USD compared to the forecasted 47.29 million USD. The market reacted negatively, with True Corporation’s stock plummeting by 16.47% in after-hours trading. According to InvestingPro data, the company maintains impressive gross profit margins of 85% despite these challenges, though five analysts have recently revised their earnings expectations downward for the upcoming period.

Key Takeaways

• True Corporation’s Q4 2024 EPS and revenue both fell short of analyst expectations.
• The stock price dropped significantly by 16.47% following the earnings announcement.
• The company reported continued growth in service revenue and EBITDA for the year.
• True Corporation aims to modernize its network and expand its product offerings.
• The company expects to be profitable on a reported basis in 2025.

Company Performance

In Q4 2024, True Corporation experienced a 2.3% increase in service revenue year-on-year, contributing to a 4.6% increase for the full year. EBITDA grew by 12% in the quarter, marking eight consecutive quarters of growth, and 14.5% for the entire year. Despite these positive trends, the company reported a normalized profit of 3.6 billion THB for the quarter and approximately 9.9 billion THB for the year.

Financial Highlights

• Revenue: 46.2 million USD, below the forecast of 47.29 million USD
• Earnings per share: -0.07 USD, missing the forecast of -0.05 USD
• Service revenue growth: 2.3% year-on-year in Q4
• Full year EBITDA growth: 14.5%

Earnings vs. Forecast

True Corporation’s actual EPS of -0.07 USD was below the forecasted -0.05 USD, resulting in a negative surprise. Revenue also fell short of expectations by approximately 1.09 million USD. This performance contrasts with the company’s trend of consistent EBITDA growth, indicating challenges in meeting market expectations this quarter.

Market Reaction

Following the earnings announcement, True Corporation’s stock fell by 16.47% in after-hours trading, closing at 2.79 USD, down from 3.34 USD. This decline reflects investor disappointment with the earnings miss and revenue shortfall. The stock is now trading closer to its 52-week low of 2.325 USD, highlighting the market’s negative sentiment. InvestingPro analysis indicates the stock is currently undervalued, with technical indicators suggesting oversold conditions. The company maintains a strong balance sheet with a healthy current ratio of 4.11, indicating robust liquidity position.

Outlook & Guidance

Looking ahead, True Corporation projects a 2-3% increase in service revenue and an 8-10% growth in EBITDA for 2025. The company plans to invest 28-30 billion THB in capital expenditures and aims to achieve an EBITDA margin of 63% in 2025, improving to 67% by 2027. Analyst consensus from InvestingPro shows a mixed outlook, with price targets ranging from $3.25 to $5.00, suggesting potential upside from current levels. Subscribers to InvestingPro can access 12 additional key insights about True Corporation, including detailed financial health scores and comprehensive valuation metrics in the Pro Research Report. True Corporation also expects to reduce its net debt to EBITDA ratio to below 4x in 2025.

Executive Commentary

CEO Kon Manath emphasized the company’s commitment to sustainability and customer experience, stating, "We are investing in development initiatives like solar power site to cut carbon emission and protect our planet." He also highlighted the focus on network consolidation to enhance customer satisfaction. Co-CFO Kun Nakul expressed optimism about future profitability, noting, "We expect to be profitable on a reported basis in 2025."

Risks and Challenges

• Continued earnings misses could further impact investor confidence.
• Market saturation and competitive pressures in the telecom industry.
• Potential delays or cost overruns in network modernization efforts.
• Macroeconomic factors that could affect consumer spending and demand.

Q&A

During the earnings call, analysts inquired about True Corporation’s spectrum auction strategy and accounting changes. The company also addressed questions about network modernization, enterprise growth strategy, and tactics for improving average revenue per user (ARPU). These discussions highlighted the company’s focus on strategic growth and operational efficiency.

Full transcript - Truecar Inc (NASDAQ:TRUE) Q4 2024:

Maureen, Head of Investor Relations, True Corporation: Good morning, everyone. Welcome to Troop Operations’ Earnings Disclosure for the Fourth Quarter of twenty twenty four. My name is Maureen. I’m the Head of Investor Relations. With me today are our CEO, Kon Manath our Deputy CEO, Kun Sharad and our Co CFO, Kun Nakul.

We are having this meeting in a hybrid format. So with us in the room today are also some of our local Thai analysts. To ask questions, please raise your hand. For those of you in the room, we will take your questions first. For those of you in room, This meeting is going to be one point five hours, so please bear with us.

With that, I would like to pass on to Khun Malas to begin our presentation.

Kon Manath, CEO, True Corporation: Okay. Thank you. Good morning, everyone. Welcome the analyst from the offline online today. First time of our hybrid.

Thank you for being here today for our Q4 twenty twenty four update. I’m excited to share how true population is driving connectivity, powering the diesel growth and creating the sustainable value for our stakeholders. I’m proud to announce that for the seventh consecutive year of number one more sustainable telecom company under the BTSI twenty twenty four that recognized further better deal life, a higher quality of life for everyone in Thailand. We’re investing the development in initiative like solar power site to cut the carbon emission and protect our planet. At the same time, we’re working hard to bridge the user wide, ensuring the education, healthcare and useful opportunity are reaching each for all.

Our strong governance and ethical AI practice continue to set global standards for transparency and accountability. Putting ahead, we remain dedicated to innovating, empowering communities and building a safer healthier and more productive future for R and A Hub. Let’s now take cross over to the financial and operational performance over the past year. Despite first external challenge, we achieved eight consecutive quarters of EBITDA growth reaching our RMB98.1 billion in 2024. Our billion less focus on profitability has also resulted in a steady quarter on quarter lasting normalizes impact, which totaled RMB9.9 billion this year and a half.

I’m pleased to report that our global modernization effort, our progressive growth is 77% of our site, about 13,000 in total, solidifying our leadership in five gs. It’s real honor that the stock exchange of Thailand recognized as a deal of the year, highlighting our commitment to sustainable growth of this equity restructuring. Let’s move on how we enhancing customer experience that we derive into our three must win battle. Our key focus on this main three areas to deliver number one world class customer experience, become number one digital growth champion for consumers, business, appetite, be the number one future ready performance team. Let’s dive into each section and explain how we grow in 2025.

Our focus on the network consolidation is helping us delivering a truly world class experience to our customers. We are tracking the tower reduction plan targeting 18,000 towers by Q3 twenty twenty five to optimize coverage and efficiency. This target of 18,000 is an up dilution from the earlier communicator target of 17,000. We have identified the first opportunity to modernize more tower improving in building solutions. Now to date, over 13,000 have already been modernized ensuring our customer enjoys fastest and reliable connectivity nationwide.

Thanks to our AI first approach, our AI MLI service has handled more than 22,000,000 transaction with 92% of this study. We’re aiming for 33% shift to the digital transaction by end of this year, further enhancing our service quality. Next (LON:NXT), let’s dive into how our mobile services evolve into a holistic lifestyle offering. We remain committed to delivering best in class device value along with personalized lifestyle services that truly enrich our customer life. This transformation position through as a leader growth champion as we shift from Apple (NASDAQ:AAPL) but first to a lifestyle given model.

On one side, we’re proud to offer the best value for five gs devices. Our five gs subscriber have extended around 10% to 15% boost in the ARPU and about 30% increase the data usage in 2024, creators of the strong demand for advanced connectivity. On the other hand, our personalizing benefit and peers including TrueID through CyberSafe, TrueProtect and TrueYou is decided to enrich our customer lifestyle. Over the past year, customers who fully invested, they also enjoy nearly double the ARPU and experienced 60% less churn compared to those without using privilege, clearly demonstrating the value of our tailored offerings and peer adjust. By combining the right device, personalized plan and exclude privilege exclusive approval, we’re creating a comprehensive lifestyle solution that enhance the aspect of our customer digital experience.

So, let’s share and move to the pipeline growth in 2025. Through our smart leading innovations, We committed to ensure the service experience backed by the technology, service excellence and innovation to accelerate net app growth from last year. Our router feature embedded AI for real time monitoring and automatic ticketing, meaning potential issue identified and resolved before they affect our customers. We continue improving our after sales service with our partner with shared measurements and technology put our customer at the center. For certain segment, which require 20 fourseven Internet availability, we just have offer add on dongle allowing our router to switch automatically from wireline to wireless.

If unexpected disruptions occur, this is the new innovation that’s offered to the customer last month and a half. Our third generation 2IB TV is built in microphone and camera, enabled interactive game, fitness, KalaOK right in your living room for an immersive entertainment experience. We are also offering second place smartphone Gigatex router with WiFi seven delivering faster wireless coverage, supporting the IoT devices and integrating seamlessly into our 2x ecosystem. This innovation I decided to carry out to today’s shifting lifestyle where you are a pet owner carrying on the elderly or looking to enhance home security and energy management. As a leader in the Smart Life solutions, we will safeguard and focus on premium coverage.

Office speed up to two gigabit per second via WiFi seven to grow our broadband base with this churn and ensure a robust network. We will continue leading by providing service guarantees, right key maintenance and exceptional after service support to ensure the best in class marketing experience. Now, let’s turn our focus to our enterprise growth strategy to our beyond connectivity portfolio, which has grown 14% year on year in 2024. This portfolio include the management service from the network side, cloud services, IoT solution and the cybersecurity solutions enable us to provide end to end confirmation for business across various industry, look ahead to 2025. We are also focusing on key sectors such as manufacturing, education, healthcare and SMBs.

Tailor our corporate solution to address their unique challenge, our global partnership with CP group, Telenor Group, through IVC, China Mobile (NYSE:CHL) and others play an important role in delivering innovative solutions, certifying our position as a top partner for digital transformation in Thailand and beyond. The last must be noted for us is, I want to highlight how we’re building our feature ready organization through synergy realization, organizational transformation and process automation. We are investing in our people and foster and innovation first mindset, creating a unified and engaged team that always put the customer first. Our evolving mobile change with the partner like Ericsson (BS:ERICAs)’s TCS to touch focus on streamlining process and optimizing resources, which allow us to consistently deliver the superior customer experience. This change is not giving immediate or short term cost saving, but it will benefit us in the mid to long term in cost saving and capabilities.

By prioritizing AI led automation, we plan to automate repetitive process from 18% in 2024 to 40% within ’25, for our teams to focus more on innovative initiatives that keep us agile in rapidly changing market matter. This is for underscore our commitment to continuous improvement, collaboration excellence ensuring that truly means a leader in telecommunication and visa services. That’s the business must be Doctor. Naha. Before I hand over to Kunakun Naha, I’d like to share our key sustainable initiative that will remain steady in our net zero commitments, working with 27% of our major suppliers to reduce Scope three emission and lower our overall carbon footprint.

Our healthy KK initiative drive innovative e waste solutions, ensuring safe disposal and upcycling for a healthier environment for Thane. Through our education program like through digital academy, through Bupanya and Connex ED, we empowered 32,000,000 learners in Thai with an AI ready skills, fostering the digital inclusion in Thailand. And with our responsibility AI roadmap, we maintain the highest standard of governance, reinforcing our reputation as a more sustainable to our globally asset providers by the GSI. Thank you for your continued trust and support for Tocco relation. I will hand over my presentation to Kunakuni and hopefully this will be a good session.

Thank you.

Kun Nakul, Co CFO, True Corporation: Thank you so much, Gurmanand. Good morning, good afternoon, everybody. Please allow me to walk you through the financial highlights for Q4 and for the full year ’twenty four. I’ll also take this opportunity to give you an update on the mid to long term ambitions for True Corporation in Nakab. As far as the highlights are concerned, in the fourth quarter of ’twenty four, Cloud II reports that we had a 2.3% growth year on year on service revenue, a marginal growth of 0.2% Q on Q.

For the full year 2024, we had a 4.6 growth year on year, especially good in an era of transformation for us. As far as the EBITDA is concerned, 12% growth on a year over year basis for fourth quarter, ’1 percent Q on Q growth, which marks eight consecutive quarters of growth for this amalgamated company. Full year ’24 is 14.5% growth for us, which is outperforming the guidance that we have given to the capital markets. The normalized profit for fourth quarter is about 3,600,000,000.0, which is 500,000,000 higher than the previous quarter. And for the full year, we reported normalized profit close to $10,000,000,000 or approximately $9,900,000,000 IBAAT.

More importantly, the leverage has seen a gradual reduction and continues to reduce this quarter as well. We’ve improved the leverage by 0.2x in this quarter, 1x for the full year 2024 as well and we end fourth quarter at 4.2x, outperforming the guidance that we have given to the Capital Markets at the Capital Markets Day. If I go on to the business drivers, first, let me focus on the total revenues and the service revenue for fourth quarter and full year. The service revenue increased 2.3% on a year on year basis. This is a growth mainly driven by mobile and online segments.

As you can see on the left, the service revenue marginally improved 0.2% Q on Q. This is coming on the back of growth in mobile business, offset by lower contribution from online and TV, which I will explain in a subsequent slide. If I look at the product sales, the product sales have actually declined 6.9% on a year on year basis due to our continued efforts on optimization of subsidy. We’ve also improved 45% Q on Q because of seasonality and due to the launch of the iPhone that happened early in the fourth quarter. I must highlight that the subsidy per unit has remained more or less stable.

And we are quite we are managing this quite well. The total revenue has increased 1.6% on a year on year basis for the full year, which is driven by growth in service revenue. You can see a decline in interconnection revenue of about $1,500,000,000 but as you all know, this was on the back of our one time benefit that we recorded in 2023. If I go into the mobile business, we’ve seen a 2.1% growth in mobile service revenue, which is driven by growth in prepaid. And more importantly, as I had explained earlier, the subscribers are back to growth.

I think a lot of you had expressed some concerns on the last few quarters, the subscriber net adds had been negative. So, this quarter, we report positive subscribers both on prepaid as well as our postpaid business. If I look at from right to the left, our ARPU on the prepaid business has improved has continued to improve in fact. Q1Q has improved 4.2% and year on year 11% ending at 121 Thai Baht. Restored ARPU has remained stable at $4.26 on a Q1Q basis, but for the full year has improved 1.5%.

And as a consequence, the blended ARPU has actually improved 2.2% Q1Q and about 5.9% on a year on year basis, ending at $2.15 percent THABA. As I mentioned, the subscriber growth has been positive, 0.2% growth Q1Q. The decline that you see from the previous year was thanks to the focus that we had on quality subscriber acquisition, which has benefited us on the EBITDA. As you can see, the SG and A is down significantly from the previous year. In addition, in collaboration with law enforcement agencies on scam prevention, we have churned 133,000 customers in Q4.

So the point I’m trying to make is if 133,000 churn was not there, then our subscriber net adds would have been even more healthy at 250,000. And hence, as a consequence, the mobile service revenue has grown close to 0.7% on a Q1 through basis, 2.1% year on year. And for the full year, thanks to the efforts that we had done on price rationalization, we benefited by the growth in the mass and migrants as well as higher influx of tourists. We had a full year growth of 4% in mobile service revenue. As far as the online business is concerned, we have a 3.9% year on year growth in online revenues with a 5.8% improvement in ARPU.

Again, from the right to the left, as you can see, the ARPU has improved about 5.8% on an year on year basis, slight decline in the quarter, which is primarily on account of certain solution sales that we recorded on the B2B business in Q3, which has had a normalization effect in Q4. There is a 1% decline Q on Q on online revenue, as I mentioned, which is basically on account of lower corporate Internet business, while the consumer broadband has slightly grown

Kon Manath, CEO, True Corporation: on a Q on Q basis.

Kun Nakul, Co CFO, True Corporation: There is a 6.2% growth full year in the online business, which is driven by increase in ARPU from the renewal of discounts and also the upselling of tariffs of a higher value to our customers, something that we have been mentioning for the last few quarters. I move on to the TV business. There is a 7.6% growth in pay TV revenue on an year on year basis, an 8.9% decline Q on Q, which is due to lower consoles. As we had mentioned earlier, Q3, we had seasonally high concerts, and that’s why the revenue growth in Q3 was higher. When I compare Q3 versus Q4, it shows a decline.

There is also growth in the EPL subscription revenue. This is something that I had highlighted in Q3 as well, that Q3 marked the end of the last season of EPL. And with the start of the new season, these revenues are expected to grow. Yes, then I move on to the next, move a little bit deeper into the OpEx development. There is a 7.7% decline in OpEx, which is benefited by synergies and our ongoing financial discipline.

I think that has been the bedrock of eight consecutive quarters of growth and the full focus that we’ve had on transformation. Q on Q OpEx is also impacted by seasonal cost and yet there is a reduction that you see on a year on year basis. Let me go a little bit deeper into the different elements. The regulatory costs have declined 8.8% on a year on year basis due to one time deductible claim related to USO (NYSE:USO). The network costs have increased 4.7% Q on Q due to procurement related synergies that were recognized in Q3 and higher operation and maintenance costs and the change in operating model related to organization modernization.

What this does is that as we outsource some of the staff to high class world world class service providers, which Kornmanath had spoken about earlier, TCS, elections and the like. There is a reduction that happens in the personnel cost in the SG and A and there is a consequent impact in the consulting cost. That’s why you see the net cost goes up. There is also a decline in cost of sales of 7.8% on an year on year basis due to optimization of subsidy. This is a consistent trend that we see across the industry.

These of course have increased 45.6 Q on Q, pretty much in tandem with the increase in product sales that I had explained in the previous slide on the revenues as well. The SG and A has declined 22.38.6% sorry, 22.3 on a year on year, 8.6% on a Q on Q basis, which is benefited by synergies mainly from organization modernization, commercial initiatives and improved collection. I take you back to first quarter of ’twenty three. Our SG and A was roughly 8,000,000,000. So from 8,000,000,000, we have reduced almost 40%, thirty seven % to about 5,000,000,000 fast forward eight quarters, Nara.

The other cost of providing service has increased 2.3% Q on Q, which is as expected due to the seasonal content cost increase because of EPL. Accounting for EPL is the more the number of matches, the more the cost needs to be booked. That’s why there is an increase. This is as expected, Krat. And as a consequence of all of these efforts, for the full year, the OpEx has reduced almost 8%.

Then I move on to the profitability matrices. We tried to report eight consecutive quarters of EBITDA improvement with 14.5% growth on a full year basis, which is surpassing the revised guidance that we have given to the capital markets. Going from left to right, there is a 1% improvement on a Q on Q basis, which takes our EBITDA to $25,200,000,000 and a 12% on a year on year basis. The EBITDA margin is something that we have been really focusing on because we believe in the strategy of profitable growth. So as you can see, the year to year margin for fourth quarter as a percentage of service revenue has improved to 60.6% and which was 35.4% in the fourth quarter last year.

So in one year, we’ve seen roughly 5.2 improvement here. Even for the full year, we end the year ’24 at 59.2% EBITDA margin to service revenue, which is again a 5.1% improvement on a year on year basis. The right side of this presentation or this slide, I would like to explain in a little bit more detail. All of you have asked us in the past on what are the levers of the EBITDA improvement. So, important to give you a walk through of how the EBITDA has improved $12,400,000,000 over this last one year.

Approximately 7% of the 12.2% improvement in EBITDA is coming from our businesses, mobile, online, TV and other businesses, and this is on a gross margin level. So the revenues minus the direct costs that are incurred to drive those revenues has resulted in this increase. So even if the service revenue increases 4.6%, there is a seven point contribution of that to the margin. We know that in 2012, we have been benefited by the domestic roaming revenues from National Telecom (BCBA:TECO2m). That has improved our EBITDA margin by 1.4%.

RBB growth by 1.4%. And at the same time, we’ve had a one off benefit that we recorded in FY ’twenty three, which was a negative from last year to this year, which is bringing it down by 1.4. So these two exceptional items more or less offset each other. Then at the same time, the big benefit that we got from the synergies and as we had shared some numbers in the Capital Markets Day, the net effect of all the synergies, all the efforts of operational excellence, about financial discipline has resulted in a 7.5% increase in EBITDA on a year on year basis. And this is the waterfall explanation of the EBITDA improvement of 14.5% on a year on year basis.

I hope this gives you a perspective of the different levers that have led to the EBITDA improvement. Turning on to the net profit. We reported $3,600,000,000 normalized net profit in Q4, which is benefited by the EBITDA improvement and a good reduction in finance costs. Of course, this quarter has had a few one offs and please let me explain this in a little bit more detail. The net profit in Q4 was negatively impacted by one time effects of roughly 11,100,000,000.0 Let me explain.

Approximately 3,440,000,000.00 of this is non cash, of which majority is on account of impairment of redundant assets related to network modernization, as we’ve done in the previous quarters as well. As and when we modernize our network, we dismantle the equipments and the accounting standards mandate us to record a write off as and when the equipments are not in use. This is roughly 3,400,000,000.0, again non cash. We have recorded approximately 5,000,000,000 in terms of non cash adjustment again, majority of it is the annual impairment exercise. Then we reported roughly $1,800,000,000 as a loss from investment in associates.

This is mainly the valuation of assets that has been done by DIF. And since we have a 20.5% stake in BIF, we’ve done an equity pickup to the extent of our share of the valuation of assets that was done by the year. That’s roughly $1,800,000,000 again non cash. Last,

Maureen, Head of Investor Relations, True Corporation: there

Kun Nakul, Co CFO, True Corporation: is a provision for compensation to local authorities of roughly about $800,000,000 which is expected to be paid in cash in 2025. So as you can see, the majority of this adjustment of 11,100,000,000.0 is non cash in nature and nonrepetitive. The financial costs have declined 5.2% on a Q1Q basis due to a 4.6% reduction in interest expense from the lower net debt and improvement in the effective interest rate, which I will explain in a subsequent slide. The net profit amounted to $9,900,000,000 as I have mentioned earlier on a normalized basis with the CapEx for the fourth quarter at $11,400,000,000 mainly focusing on network modernization. The full year CapEx, as you can see on the slide, is 31,000,000,000 as compared to 37,100,000,000.0 in the previous year.

Then as far as the leverage and the net debt is concerned, there is a 35,000,000,000 reduction in the net debt over the last one year and a 1x improvement in the leverage as well. If I go from the left to right again, we end the fourth quarter at about 4.2x EBITDA sorry, net debt to EBITDA, which is a 1x improvement over the last one year. As you can see, the improvement is coming both on account of a healthy improvement in EBITDA as well as an overall reduction in net debt as well. So both levers are contributing to this improvement in the leverage. The effective interest rate has improved to 4.1%.

I know optically it looks like it is still 4.1% that was there in the previous quarter. But this is actually 4.06%. So, I mean, zero ramp up, it’s been shown as 4.1% here. But as I mentioned earlier, we’ve had a good reduction of 5.2% Q1Q in the financial cost, which is coming on account of the various initiatives that we have taken in the past. Most notably is the improvement in the free cash flows.

As far as the debt maturity profile is concerned, roughly 89,100,000,000.0 is to be refinanced in 2025. But we are proud to say that we have refinanced already 126,000,000,000 in the year 2024. So from that standpoint, 89,000,000,000 is relatively small as compared to the mammoth start that we have done in 2024. We’ve also voluntarily repaid the US dollar denominated debt that was done in Q3, which has had a benefit to us in terms of the interest expense as well. We’ve issued $16,500,000,000 of the ventures at a weighted average cost of 3.56% in Q4 and another $13,000,000,000 at $3,530,000,000 has been issued in Q1 already.

So as you can see, the new issuances are actually below the effective interest cost of the company. And that’s why this is expected to go down as we go forward. Then my FY ’twenty three versus FY ’twenty four development, total revenues increased 1.6%, four point six % is coming on account of the service revenues. OpEx seen a decline on almost all the elements, there is roughly 7.9% decline. And as a consequence, the EBITDA has improved 14.5, which if I normalize for the one time benefit that we got on the settlement of a litigation in ’twenty three is actually 16.2%.

The net profit after tax has improved 14,700,000,000.0 on a normalized basis with 9,900,000,000.0 in Q4. It’s important to end this section with the comparison versus the guidance that we have given to the capital markets. Yes. The initial guidance that we have given in the beginning of ’twenty four was 2% to 3% growth in service revenue, excluding interconnect, a 9% to 11% growth in EBITDA, which was considered quite optimistic actually at that point in time. CapEx at around $30,000,000,000 and net profit being profitable on a normalized basis.

We revised the guidance, thanks to a good performance that we had in the first half of twenty twenty four, where service revenue was increased from 2% to 3% to 3% to 4%. Everyday was increased by three percentage points from 9% to 11% to 12% to 14% CapEx and net income was remaining unchanged. The achievement for 2024 is actually outperforming the revised guidance as well, especially on the top line and the EBITDA. Revenues, we ended up at 4.6%. I must highlight that this is in the year where we are heavily focusing on transformation.

Still, we had an improvement of 4.6 on the revenues. The EBITDA improved at 14.5% and CapEx was slightly higher than what we had guided to the capital markets at about 31,000,000,000 Most notably, we were profitable in the first quarter itself, which was also quite a positive surprise that was received was well received by the capital markets. I also want to share one more thing here. As the Capital Markets Day on 09/23/2023, we had spoken about two financial matrices. Number one, everyday as a percentage to service revenue, we had an ambition to reach 59% in 2025 and fifty three percent in ’twenty seven.

The leverage, our target was to be less than 4.5x in ’twenty five and less than 4x in ’twenty seven. Actually, five we reached the numbers for twenty five, five quarters in advance. If you remember our third quarter, our EBITDA margin to service revenue was already higher than 59% and the leverage was already 4.4x at that point in time. We ended the year, of course, even better at 4.2x. And you had all been asking us that since you are outperforming your capital markets day guidance, do we expect to improve these numbers going forward?

Or is there any uncertainty that we have not factored into our numbers already? Hence, in the last part of this presentation, I will give you an update on what we expect the mid to long term view on the financial performance for us. Very importantly, I mean, as I start my section on 2025 and the future, I want to highlight on what were the key drivers that resulted in overachievement. Again, this is a question that everybody has asked multiple times, so that’s why we try to explain it in the form of a slide. Number one, the realization of dis synergies.

We know that we have accelerated the network modernization, which also has meant that we have written off more than what we had expected to write off in this year. We have over delivered on the organization modernization. We have recorded procurement synergies which were above our expectations. And also we’ve increased our focus on commercial initiatives as well. Then the second reason behind our over achievement was the performance management framework.

I’ve explained many a time in the past that in our company, we hold the CXOs accountable for all revenue and cost streams. Each and every line item in a trial balance is allocated to a CXO in the company. On top of it, we have annual, quarterly and monthly targets, which are being monitored on a weekly basis on revenue and a biweekly basis on OpEx or EBITDA. Anything coming out on account of those actions where we do a forecast on how the numbers are going to look like for the month and for the quarter are being taken as actions if they are not as per what we had planned. And each CXO is then held accountable to make sure that they deliver on the plan.

More importantly, we have quarterly and annual bonus KPIs, which are linked we have annual and quarterly KPIs, which are linked to the numbers that I had shared in terms of the frames that are given to the CXX. If one C level is doing well and the other is not, the company will not get a bonus unless and until everybody is successful on a particular target, which then encourages the organization to work together as a cohesive unit to outperform the company level targets, not looking at their own targets alone. This has been a key differentiator for us in ’twenty three, continues to be a differentiator in ’twenty four and we hope that this is going to benefit us in ’twenty five as well. Last but not the least is the financial discipline. We shared about our disciplined CapEx management.

The CapEx program which comprises of the CFOs, the CMO and the CTO, they look at our CapEx spend in excess of 5,000,000 baht. I know it sounds bureaucratic, but this is one of the reasons why we’ve been able to create a lot of discipline in terms of the CapEx spends, yet not disregarding what the customer needs. We’ve taken wholehearted efforts of market rationalization as you have seen in the past in the good ARPU growth of almost 5% and we’ve refrained from loss making propositions. The biggest example of that is ETL. Then my last section of this presentation is giving you a round up of 25 to 27 numbers and the guidance for the year 2025.

Before I jump into the guidance of 2025, I want to explain two significant accounting changes that affect our financial statements from August of third, twenty twenty five. Number one on the left is something that I think all of you are more or less familiar with, but let me explain. The spectrum roaming arrangement with National Telecom is expected to expire on March ’25. And that’s why there is a spectrum auction that is yet to happen sometime in Q2. Right now, this spectrum arrangement is currently recognized as revenue and cost with the net being negative on the EBITDA.

That’s roughly about $1,700,000,000 per quarter. Once this spectrum is reallocated by means of auction and if we end up acquiring this spectrum, this will get converted into intangible assets, which is a CapEx model with a consequent impact on depreciation and interest expense. The amount of this cannot be determined, of course, because it is determined based on the spectrum option that will happen sometime in Q2. But what we can confirm and mention to you that the EBITDA will benefit by $1,700,000,000 per quarter on account of this accounting change. We do expect a net benefit on cash flows and also a net benefit on income statement.

But again, it will be everybody anybody’s guess on what the spectrum auction will entail. The second item is we will transfer some of the assets to DIF on a pre agreed arrangement that is already existing with DIF upon the expiry of this eight fifty megahertz arrangement with MT, again on August of twenty twenty five. This will lead to a $600,000,000 improvement in EBITDA per quarter because we will end up capitalizing these assets on a lease accounting, which is the clear IFRS 16. So, the EBITDA is going to improve and the below EBITDA is going to increase as well. Of course, in the initial year, the impact below the EBITDA is going to be higher because the lease liability is going to be higher, so interest expense is higher.

But this will taper off as we go forward. Pursuant to this capitalization, there will be an increase in the lease liabilities approximately 19,000,000,000 to 20,000,000,000, which is structured in the guidance as well. I must reiterate here that there is currently no new cash obligation for true on account of this change. This is purely an accounting adjustment. Then what you’ve been waiting for is the guidance for 2025.

On the service revenue, excluding Internet and excluding the impact of domestic roaming with National Telecom, we expect ’25 to grow 2% to 3% the EBITDA to grow 8% to 10%, factoring in the accounting changes as well as further synergies as well as the growth in top line CapEx to be in the range of $28,000,000,000 to $30,000,000,000 will be perhaps slightly lower than what we had in $24,000,000,000 and we expect to be profitable on a reported basis. Even if we have to record any impairment, which we will because the network modernization is not complete, we will be profitable we expect to be profitable on a reported basis for ’25. Our rationale is that the industry is predicted to grow in line with the GDP forecast, which is roughly 2% to 3%. The outlook improvement will continue in the mobile segment. There is going to be a subscriber growth in online and there is going to be a muted performance in Pay TV because the loss from EPL is already factored into these numbers.

As mentioned, the domestic roaming with national telecom is expected to decline. The EBITDA will be benefited by synergies, will be benefited by the spectrum arrangements that I showed in the previous slide. And we’ll continue with the financial discipline and the performance management framework that has helped us quite well so far. To the completion of the network modernization project in ’twenty five, this will result in a reported net profit for the company. And with that, the dividend consideration of more than 50% of consolidated net profit, of course, this will be submitted to the approval of the Board of Directors, is going to be there in 2025.

Giving you slightly mid to long term views, the EBITDA margin, which was 54% in the year ’twenty three, ’50 ’9 percent in ’twenty four is expected to improve to 63% in ’twenty five and further improve to 67% in 2027. This is a four percentage point improvement from what we had shown in the capital markets. And as I mentioned earlier, we are five quarters ahead of what we have planned, so first for us to revise our long term guidance. Everyday improvement will be driven by synergy realization and financial discipline. The benefits on account of spectrum arrangement and the capitalization for the assets is already factored into these numbers.

CapEx intensity is expected to continue to reduce. 20% was CapEx to total revenues excluding the spectrum arrangement, which is a network rental revenue, was 20% in ’twenty three, down to 17% in ’twenty four, further down to 16% in ’twenty five based on the 28,000,000,000 to 30,000,000,000 CapEx number that we have guided is expected to taper down to 13% to 14% for the year ’twenty seven. We have had higher than anticipated procurement related synergies. We have had the network modernization that has resulted in the benefits. And also, we will get benefits on the spectrum pruning as well.

Last but not the least, the disciplined CapEx management definitely has an impact on how the CapEx is going to trend as far as the future is concerned. The most important lever, because at the end of it, we will be concerned about the high leverage that the Company has had. 5.2x was what we had in ’twenty three. In fact, Q1 of ’twenty three was 5.7 levels in Q1. End of ’twenty ’3 was about 5.2.

We spent down to 4.2 in ’twenty four. Is expected to be lower than 4x in ’25, even after considering the increase in the lease liabilities that are showed in the previous slide of roughly 20,000,000,000, and then is expected to go down to less than 3.2x by the year 2027. Two important things to mention here. We are already considering a dividend payment no less than 50% of the consolidated net profit in each of the years. And then, on the spectrum, which is a very important assumption is the auctions are going to be held very soon.

We have assumed spectrum to be renewed at the reserve price that has been there in the auction with the 10 installments similar to what was there in the two thousand six hundred megahertz auction that was last done in 2020. Last slide is basically the three takeaways that we had from this mid to long term ambition. ’twenty three was the year for us where we had a reported loss. Year where the transformation of the company started, we started to incur huge integration costs, slowly but surely working the company towards operational improvements. ’24 is when we reported normalized profit, in fact, in the first quarter of twenty four itself, yet had a reported loss for the full year because of the write off that we had to do on the network modernization.

’25, as I mentioned, will be a reported profitable year for True Corporation, first time since the time the company has amalgamated. And this story is going to continue as we go forward as well. Key takeaways, network modernization will lead to a strengthened leadership position for us. The accelerated synergies, the financial discipline, performance driven culture, they all resulted in a profitable yet sustainable growth. The completion of network modernization will mean that the company will report a profit on a normalized and reported level as well.

And the strengthened cash flow, approximately $17,600,000,000 is free cash flow that we generated in the year 2024 has led to and will continue to improve in the future and will lead to a gradual reduction in leverage, which is also a significant improvement from what we shared at the Capital Markets Day. With this, I end my presentation and hand over to Purnurin. Thank you, sir.

Maureen, Head of Investor Relations, True Corporation: Thank you, Sonakul. Thank you, everyone. We will start with questions from the room first. I believe Kun Jin wants to go first followed by Kun

Kon Manath, CEO, True Corporation: Hi, I’m Tijit Kep from KKBS. I have four questions if you don’t mind. Number one is about revenue growth. Your mobile phone revenue grew 2.2 year on year in the fourth quarter that’s related from 4.4% growth achieved in the third quarter. And it’s below Advanced growth of 5.5%.

Can you expand the deterioration in growth? And then is that your concern that you are going slower than advance or it’s okay with your focus on profitability? That’s the first question. Number two, when we talk to advanced management, I think it’s pretty clear that they are looking to buy the new spectrum as well, not only the expiring spectrum because they look at the demand in the next five years. Are you looking to do the same thing buying the new spectrum?

The first one in the Capital Day when you guided the net synergy in the synergy deducted by the indication cost, the big churn would come in 2025. The net synergies are possibly bigger than 2024. Is that still the case? And then the last one, Advanced, it’s appointing the Chief Retail Officer to boost their sales. And then I just noticed that their sales revenue per year is actually double your sales revenue, but your service revenue is actually larger than them.

Can you explain the gap? And is there any room for you to grow your sales? Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kunjian. We will take the service revenue related questions first. And for Spectrum, I will hand over to Kunjeen later. So, Kunjeen, maybe you can take the performance questions first.

Kun Nakul, Co CFO, True Corporation: Yes. Thank you so much, Kunjeen. Your first one on the revenue growth, 2.2%, which seems to be below our competition. That is definitely not a concern, Akram. But I think important to break this down into the different businesses.

As far as mobile business is concerned, our growth is close to 1%. And that growth is coming on account of the prepaid business and also the postpaid business is actually flat. As far as online business is concerned, the decline that we have in this quarter is not on the B2C. B2C business has continued to improve by about one percentage points. The decline is because of the one time revenues that we recorded on the B2B side in Q3.

So that’s why Q3 looks a little bit lower. The B2B business is such that when you sell certain solutions to the customers, there is some increase and decrease that happens on a quarter on quarter basis. This you see with our competitor as well. So, this is not abnormal. As far as the TV business is concerned, the decline that is there is because of seasonality.

And as I mentioned, we had seasonal concerts that were recorded in Q3. For the TV business, which are not there in as much number in Q4. So, that’s why there is a decline. So, if I break it down, I do not think this is an area of concern for us. As you rightly mentioned, we focus on profitability.

And there we try to balance revenue growth with the expenditure that is needed to grow that revenue as well. And hence, because of the focus on quality, we have our own strategy to play to show consistent performance on

Kon Manath, CEO, True Corporation: a quarter on quarter and on year end basis.

Kun Nakul, Co CFO, True Corporation: Then I think the next question that you had, sorry, yes, I can see. Yes, the next question I’ll take is the one on the synergies. And if I understand your question well, the synergies are obviously bigger in 2025. And the impact of the net synergies has already been factored into the EBITDA guidance that we’ve given of 8% to 10%, has already been factored into the CapEx guidance as well. If you just go back maybe five or six quarters at the CMB, we spoke about the CapEx guidance to be around 35,000,000,000 during this period.

So, the fact that we are guiding 28 to 30 means that the synergy is actually benefiting us and the CapEx is lower. And of course, 8% to 10% is a significant improvement in the EBITDA as well. So the net synergies are already factored into the numbers for 25% as well. And because these numbers are better for 24% and even better for 25%, we’ve had to upgrade the guidance that we’ve given for the EBITDA margin to service revenue as well, also improve the leverage. On this Chief Retail Officer and the sales revenue being double than us, As we’ve explained in the past, let’s look at the net sales revenue.

We should look at net of the subsidies. The accounting that both operators have in the market is a bit different. So hence, we cannot look at the net product sales, which is revenue minus the cost and compare between the two operators and say one is profitable, one is not. For one of our businesses, we record the subsidies netting it off in the revenue line itself, which is not so much the case that is happening in the industry. That’s why it looks like a different picture.

What I can confirm, which I’ve done multiple times in the past, the subsidy levels that are there in the industry are pretty much same across in the market. So this is just the way of how the accounting is happening. And maybe, Punjara, do you have some thoughts on the Chief Retail Officer? Yes. I can add that.

Just wait for the mic. Mic. Yes. So, Konakkal, thanks. What we are also looking at, the market dynamics is also a bit moving side.

We also see open channels are also playing the part as far as device and accessories are concerned. So, we have also strengthened our devices and retail division by bringing more capacity so that we can look at very differently the way market is shaping. In short, we will focus on device as well as associated accessories 2025 onwards to see that we are capturing that full ecosystem. Thank you.

Maureen, Head of Investor Relations, True Corporation: Okay. Then maybe Kunmanath, we can take the question on Spectrum.

Kon Manath, CEO, True Corporation: Okay. Thank you for the spectrum question, Naha. For the operator position, definitely, we expect to have a better of the spectrum portfolio myself. In many countries, they have some countries they give for free and they give for the lower price of continuity and continue for the best of the service and the development of the country. I have a application to the NBTC many times and expected and our expected NBTC regulator would understand the situation of the country and also for the technology coming technologies, five gs, six gs, whatever together.

If you answer this, definitely we focus on our mid band. But definitely there is a price after public hearing that we also attend. In the February, we also gave some application on this as well. If we have the right and reasonable of the reserve price, we definitely expect to acquire. We have planned all the scenario of the spectrum portfolio and our mid band and also new re mid band, like RMB1500 on consolidation on the labor pending.

But everything depend on the regulator insurance of the regulation next month. So hopefully, we will get a reasonable for country and continuing our service and enhance our technology for the Thai people.

Maureen, Head of Investor Relations, True Corporation: Thank you, Sundaramath. Thank you, Sundin as well. We can pass on to Kwanvato.

Kwanvato, Analyst: Hello. Good morning and thank you for the call and congratulations on overachieving the full year target. I have three questions. The first one is about the goodwill impairment. So, my understanding is that most of the 5,000,000,000 Thai Bah goodwill impairment came from two revisions.

The question is, could there be more impairment this year given that Tru is going to lose the EPL rights? So that’s number one. Number two, how do you plan to minimize the customer churns after the loss of EPL rights in May? And the final question is on the EBITDA margin guidance over the long term. So basically, you are guiding for rising EBITDA margin into 2027.

My question is, how do you plan to increase the margin into 2027 when the synergy program will already be completed in

Punsuppashai, Analyst: the third quarter of this year.

Kwanvato, Analyst: That’s all my questions.

Maureen, Head of Investor Relations, True Corporation: Thank you, Konvashuk. So let me first take the goodwill impairment and the margin related question from Kundakul, then we move on to Kanshara for the EP alone. Okay, Kundakul? Yes.

Kun Nakul, Co CFO, True Corporation: All right. Thank you so much for the question, Kanshwar, and always good to see you. The Google (NASDAQ:GOOGL) impairment, as you rightly mentioned, is primarily on account of the TV business. But this is on account of the fact that the linear TV or the linear part of the TV business has not performed as well as we had expected previously. You’ve seen from the numbers as well, the linear TV continues to go down in terms of subscribers and in

Kon Manath, CEO, True Corporation: terms of

Kun Nakul, Co CFO, True Corporation: revenue. And that’s why on a conservative basis, we factored in what can potentially happen in the future and recorded the goodwill in this TV. We do not expect anything to come negative on the loss of EPL. As we’ve mentioned many, many times in the past, EPL is a net negative for us. Even the direct revenues, direct indirect revenues on EPL minus the direct cost that we are still paying for EPL is a net negative.

So losing EPL is not going to increase the impairment on the goodwill or increase the recoverable value of the assets. So, that’s not going to happen. The second one on the EBITDA margin for ’27, it’s a good question. How do we plan to increase? We have demonstrated a 5.1% increase in EBITDA margin over the last one year.

And we showed you where this increase is coming from. It’s coming from more or less an equal contribution on the top line as well as on the synergy. If you remember, 7% came from gross margin of all the businesses and another 7.5% to 8% is coming on account of the synergies. So, while the synergies or bulk of the synergy program is going to be expected to end by the end of twenty twenty five, full year impact of this only comes in 2026. So, still there is an improvement that continues to happen in terms of the EBITDA margin.

Plus, at the same time, because of the financial discipline, we don’t stop on the synergy projects alone. We look at all possible ways where we can improve the OpEx by better cost management. And that’s why we do not separate synergies and operational excellence at all. We just talk about the whole concerted effort that we have on the better OpEx management for us. And as a consequence, there is an improvement that happens.

One important factor that I need to also explain is the benefit of these accounting adjustments. So while 2025 accounting adjustments have a five month impact from August till December, ’20 ’20 ’6 will be a full year impact on these accounting benefits, which further increases the EBITDA margin. And that’s why 2027 is a combination of all of these factors, which is these accounting adjustments, which is full year impact that we will get on the synergies that we continue to realize in ’twenty seven or ’twenty five, even though they are tapering off as we speak, will actually result in the FBA margin going to 67%. I hope this answered the question. Then on the second one on how do we plan to minimize customer churn from the loss of APL, maybe, Kansharil?

Yes. Sure. Thank you. This is Vijay, Mike. Yes.

In addition to what Kurnapul talked about, let me remind ourselves that TRUV has a portfolio of lifestyle services like streaming, entertainment, gaming insurance and then we sell TRUV as well as TRUV, TBS NOW OTT. EPL is one of such services in addition to our other premium content. So, we continue EPL till such time we are expiring. And as you may as you would believe that we have been mentioning that we want to continue our profitable growth journey. And And we will see how the partnership evolves later on.

At the same time, we are quite confident that we will continue our select portfolio of relevant content to attract our customers while continuing to offer with an attractive packages till May. Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Punsarad and thank you, Konvassu. We can move on to Punsuppashai next. Can you turn on the mic, please? Hello.

Kon Manath, CEO, True Corporation: Thank you. I have a couple

Punsuppashai, Analyst: of questions. First two for Kun Manat and Kun Chalatnakas. I know take that to Sai MOU with LiOH’s client in China. I would like to know the scope of the MOU and what do you plan with partnership with the LiU satellite and how would this affect your mobile visit? That’s my first question.

Can I go one by one, please? Yes.

Maureen, Head of Investor Relations, True Corporation: We can finish all the questions.

Kun Nakul, Co CFO, True Corporation: Okay. Hello? Yes. It’s okay.

Punsuppashai, Analyst: The second question is on DAF and ETAB will become a new core. It’s quite a pain in time market. A very big new core. And I think they try

Kon Manath, CEO, True Corporation: to go beyond mobile operator for AS.

Punsuppashai, Analyst: And what would this impact your long term strategy? Do you need to adapt something or do you see some change in the market according to this? That’s my second question. My first question to Koonakonaka, very easy one. Do you have a comment on net debt to equity and equity level do you see the equity in balance is uncomfortable?

The last one for Koonakun Nakap, your EBITDA guidance would improve the impact on the accounting adjustment hub. Thank you very much.

Maureen, Head of Investor Relations, True Corporation: Thank you, Konju Pache. It may be Sunwala.

Kon Manath, CEO, True Corporation: Okay. Thank you, Kap (JO:KAPJ) for the question about the technology transformation and also our roadmap on technology in the fab. I have to say that we talked to many of the new operator in the fab such as the OneWeb, such as the CUPER, have styling, also the Galaxy space. Let me explain a little bit on this one, for the LEO business there are two layer of the business. First is the service provider, I mean, first is the wholesale and the retailer and wholesaler for the business and another one is the manufacturer of the satellite.

So we talk to everyone and when we talking to Biotech Brothers, we explore the opportunity together, NAKAP. How this is going to have the opportunity of the year in the mobile. So we explore in the wholesale and retail as a for the year. But why we have to do that is we talk to RIO right now. In the roadmap of the 60 in the future in five year, six year time, the telecom of the mobile will change Nihap.

But not totally change, but we have the LEO as the combination of that Nihap. For more accessibility, let’s say, in the forest, in the mountain, in the ocean, but not necessarily to have much bandwidth, also connecting to the IoT. So, when we discuss, we open the discussion for every partnership for every provider. But for the Galaxy Express, we explore the volatility of the reseller and hopefully the Galaxies Spress has a better deal or has a better on the opportunity in-depth on the development together. That’s our scope.

But we don’t have any commitment at the moment on the CapEx. I don’t have any commitment on the binding anything. We enable you for opening each other to explore as a first step of the partnership.

Maureen, Head of Investor Relations, True Corporation: Okay. Then maybe, Gunshara, do you want to take the growth in touch?

Kun Nakul, Co CFO, True Corporation: Yes. I think that’s a very interesting question. I will answer in two, three parts. First part is that we are on track to our strategy on growth transformation as well as monetization has been highlighted. So that is first thing which is very important since the R and D merged that we are on track.

Second, we do understand that there are a lot of opportunities in the market. One from Nanak talked about this Galaxy or the LEO satellite, which is really going forward and we are also participating in terms of trials as we mentioned about the NOU. Third thing I would like to talk about is cloud AI and the data center, which are also emerging quite well. And if you see, there is a quite a good traction on the enterprise side in this area. So, what COO Corporation is doing that we are also working on this cloud business solution.

We of course do have a partner as to IDC. And we have aimed to double the cloud revenue in next three years from the base we have right now. And of course, we require very light investment because our model is very different. Second is, I think it’s worthwhile to mention maybe you’re touching upon this kind of a newer opportunities, but I would like to take this opportunity to also inform that we have also taken quite ahead in AI and GenAI side. How do we simplify process and automate them in year 2025 going up to 2027.

Just to mention, we have already done the key priorities on AI, which is customer experience, chatbot, CBM network related AS, they will be touched upon in 2025 with the quite a matured use cases, more than 10. And then, we will continue to simplify this process over this automation journeys. Finally, on data center and partnership, also would like to mention that our partner through IBC has also signed with Siham AI to access NVIDIA (NASDAQ:NVDA) chipset for announcing our capabilities through AI training and GPS service. So, we have full eye on the overall ecosystem and where market is going. And we will continue to adopt in addition to our transformation journey, which is definitely very, very important for us as you will agree.

Thank you, Kaap.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kansharaj. Then maybe we can move on to the covenant delivery question, Kansharaj.

Giteson, Analyst, Innovacx: Yes.

Kon Manath, CEO, True Corporation: So am I on? Yes.

Kun Nakul, Co CFO, True Corporation: Yes. Thank you for the nice questions, easy questions, as you said, confirming. So I’ll give very short answers also. Whether there is any covenant on net debt to equity, answer is no. And we are not uncomfortable with the equity levels in the company, especially when we are saying that we’re going to be profitable on a reported basis in 2025.

If you just look at the normalized profit that we have is roughly 3,500,000,000.0 now. You can just try to analyze this number, it reaches 14.5 for the full year. Of course, as a network modernization is behind us, write off will be finished and we’ll be profitable on a reported basis. So, there is no new math on this. It’s quite easy.

So, there is no discomfort at all, Nankar. Everyday guidance includes impact of accounting changes? Yes, of course. The reason why we wanted to mention these two items here in the call today is for everybody to transparently know that this is what is going to happen in August of ’twenty five. There was no need for us to wait till August and say that this is how it has changed.

We’ve just made it very, very clear that this also has a benefit in terms of the EBITDA for us, impact is for everybody to see. In fact, if you look at our NDA, we also have one slide as an appendix, which if you look at our presentation, there is also one slide which mentions the line items in the P and L and balance sheet which will be impacted by this adjustment for you to do your calculations as well, Naga. So in short, this is also considered in the guidance. Thank you, Gautam.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kansu Pachai. Thank you, Pankaj. Then we move on to Kannathapap.

Kon Manath, CEO, True Corporation: Hello. Thank you very much. Natapot from Panashat Securities. I think four questions. Let’s start with I think the housekeeping one on your CapEx and net debt equity guidance.

You mentioned about spectrum things. Just to make sure I get it right for you, factor in kind of whatever spectrum you plan to get at reserve price with the terms of ten years installment. Is that correct? Yes. But one thing we just said ten years installment is based on what already been announced.

It’s not that payment term, right? So, okay, but basically more to me like only downside from here rather than there’s a positive both on the second price and the payment term? Second question, maybe follow-up on the enterprise revenue. You mentioned in this presentation that you have double digit revenue growth. Correct me if I’m wrong, is it in that portion of the online revenue that in some corporate portion or where is that you are focusing on?

And with that, so I think since it is in online, right, in the live segment, I think most of the services on the connectivity or Internet connectivity or something like that. And Kunshara mentioned about cloud and that maybe that doesn’t build things, but I think we have also have duplication with two IDC, right? So how far downstream as true corporation or true would like to go down? Data center, cloud services, system integration as part of your business to grow this kind of like corporate service revenue? My third question is on synergy.

My calculation on your EBITDA guidance is more like 10% growth, let’s say, that will be RMB10 billion. But you already have for the half year impact of the that NT things we so around RMB5 billion, RMB6 billion sorry RMB4 billion serving this year and revenue growth you target maybe RMB3 billion to RMB5 billion. So that left me with only 1,000,000,000 to 3,000,000,000 of Syniti serving and that compare with 6,000,000,000 in 2024 that you did calculated the 4% to 4% for us. So how is that start to decline instead of which should be the peak year of the Acidity benefit you would get? And lastly, maybe the big question I think, you mentioned 2%, three % revenue growth, but I think mostly you took from ARPU, right, rather than the volume.

So what actually your strategy in ARPU improvement? So I know you try to improve ARPU, try to add service, but for me, can you add some color or some sort of evidence of what package or what service you try to add? Thank you.

Maureen, Head of Investor Relations, True Corporation: Okay. We can take the guidance one.

Kun Nakul, Co CFO, True Corporation: Yes. I can take all three and maybe Jara can join. Sure. Sure. Can

Maureen, Head of Investor Relations, True Corporation: you turn on the mic so from

Kun Nakul, Co CFO, True Corporation: the call? Can you just repeat the last question because I could not note that?

Kon Manath, CEO, True Corporation: I mean your strategy on APO improvement. So actually your plan to do it?

Kun Nakul, Co CFO, True Corporation: Sure. Okay. Maybe let me take the CapEx and the net debt to EBITDA first. Net debt to equity, we don’t talk about we always talk about net debt to EBITDA. Spectrum price is considered at the reserve price and payments over ten years.

Yes, they are talking about payments over five years, but our position externally also, as I think Unmanath also mentioned, is that the price is high and payment terms are not appropriate. I mean, they should be following the similar trends that we had in the past. For the purposes of our model that we have been following for the last many, many quarters in years, we’ve made it very consistent that this is what our stated position is. And should there be a change in that, then obviously our models will be adjusted accordingly. But I mean five versus 10, you can do the math.

If the price remains at what it is, then the delta can easily be calculated, Nakar. On the enterprise, I will pass on to Kunsarab also, but let me first answer where is this enterprise revenue booked? I think that’s what your question is. So, why we do not separate enterprise as a separate section, which is more or less consistent with how industry also reports it, the enterprise revenue comes in different items. There is a mobile element of enterprise revenue.

There is an online or connectivity element of the online revenue. Some B2B revenue is coming in TV business as well because that’s also there. And the others element also includes the center parts. I think what Kunsharaj was trying to say is that the connectivity or beyond connectivity part of enterprise, which is all the solution sales, all what we’re doing in IoT, five gs, private network and all the solutions that we are selling in the market, that is expected to double over a three year period. And we are seeing some green offshoots on how that is expected to happen in the future.

On the synergies, maybe I can help you be after this call with the math, but my broad answer is as follows. Firstly, the benefit of those accounting adjustments is not for half a year, it’s for five months. So that will change your numbers a little bit. Second is revenue improvement of 3% to five percent that you calculated. The revenue improvement should be looked at net of the costs.

For sure, when we increase the revenue, there is a direct cost required to earn that revenue. So, you can’t add just two to five straightaway into the EBITDA. Once you do these adjustments, then the synergy number that you are calculating is going to be higher than what it is and probably is going to answer your question, Akar. Then on the OpEx sorry, on the ARPU improvement, yes. On the mobile side, bulk of the growth that is expected in 2025 is going to come from ARPU improvement.

I’ll give you one good example here. If you look at our prepaid business, I mean, prepaid ARPU improved 11% on a year on year basis in Q4. If I do not grow my treated ARPU at all, which is impossible, treated ARPU will continue to grow on a quarter on quarter basis. Let me make it very clear. If I do not grow my treated ARPU from Q4 numbers, still compare 2025 versus 2024, we are already sitting at a 5.7% growth on ARPU on prepaid.

Not so much on the postpaid because postpaid has been more or less flat in the last two quarters for the industry as well. So that’s how we are saying that the improvement in the mobile service revenue or in the revenue guidance on the mobile side is primarily going to come on account of higher ARPU. There is going to be some incremental benefit from higher tourists as well. But as you’ve already seen, 2024 has witnessed a phenomenal growth in the tourists. There is going to be some more that can happen in 2025 as well.

And on the enterprise, if I remember the second part of your question was on the data centers and cloud, how far will you go downstream? I mean, maybe consider about So thank you, Kurnakul. First one, just to add on to what you have been talking about on this new generation solutions, which we have been doing quite well. This is a part of our strategy where we want to grow beyond connectivity to 2x over three years. And this includes five gs parallel networks, SD WAN, SAC and also SaaS and especially for SMB segment.

Second, we did touch about the cloud. So, our partnership is through AIC through IBC. And what we are working on, of course, one thing is Cian AI. But the second part is which is quite relevant for our enterprise customers is serving them with a hybrid cloud, multi cloud. So, we have a we are working on a core complete solution involving whether it is SaaS, cloud or colocation, all three together.

And then work along with our Beyond Connectivity solution as an overall strategy for enterprise, so that customers see some traction and then we see the growth there as highlighted already for cloud business turning in three years’ cup. Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kuncharad. I will take Khun Giteson’s question last, then we will move on to the people online. They’ve been waiting for some time.

Giteson, Analyst, Innovacx: Okay. Thank you for the opportunity. Giteson from Innovacx. I have three questions. The first one is about the net synergy value.

I remember at the Capital Market Day, you mentioned about RMB250 billion net synergy. My question is, is this number still valid or you are not seeing higher number than this? That’s my first question. My second question is about the trend of the one time expense related to the network modernization. Since you already completed 77% of your target, should we expect this number to decline in the first quarter twenty twenty five?

This is my second question. And my third question is about the one time expense as well. Apart from the network modernization expense,

Kwanvato, Analyst: should we

Giteson, Analyst, Innovacx: expect any one time expense to be booked in the first quarter ’twenty five? Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Konradi san. Konradi san,

Kun Nakul, Co CFO, True Corporation: yes. Thank you so much for your questions, sir. And thanks for patiently waiting. I know you’ve been raising your hands for quite some time. Net synergy value, $250,000,000,000 is what we showed in CMD.

For sure, we are going to exceed that curve. And the simple reason is, there are actually many reasons. Number one is that this is net present value of the future cash flows or future benefits, right? If we have accelerated the synergies, the NPV is going to be higher. That’s one.

Second is, on procurement, we have delivered higher than what we had expected. On network modernization from 17,000 sites, we are now going to 18,000 sites. So, it’s 1,000 higher. And last but not the least, on the organization modernization also, we are doing better than what we had expected. So in general, the $250,000,000,000 number is higher than what we had planned.

And it is this reason why our guidance on EBITDA to service revenue, our net leverage is all improving because the synergies are higher. Of course, we’re not giving a new value of $250,000,000 because we believe the level of details that we had shown in the past created more confusion than what we had expected to be very transparent with you. That’s why we are going on giving absolute guidance on in terms of the growth on the EBITDA and the margin going forward. The trend on the one time expense, firstly, on the network side, right? I mean, we have 5,000 more sites to dismantle in 2025.

We reiterated in the past that the write off per tower is going to be around 1,200,000,000.0 range 1,200,000.0 range, sorry, 1,200,000.0 per tower. So, you can do the math. This is the total magnitude of amount plus minus a few percent there because every site has different types of assets and amount of write off can vary. But this is the broad magnitude that we’re looking for. Whether there’s going to decline in Q1 versus Q4 is a bit difficult to say because it depends on the number of sites we dismantle.

What we believe is that by Q3, this will be behind us. We will try to do it even faster if it’s possible, but that’s what it is. So the number of sites decides the amount of write offs that we need to record. Actually, we should be urging us to do as much as possible in first half so that the whole or second half is going to be all normalized and reported levels of profit. Apart from net debt modernization, do we expect more?

No. I mean, right now, whatever the thoughts needed to be recorded in terms of impairment of goodwill, impairment of assets is all we have booked. I can answer it in a little bit more detail. Goodwill today, if you look at the books, the goodwill remaining in the books is primarily coming on a card of amalgamation. This is a mobile business.

And if I were to impair mobile business, that means I’m not doing well at all, which is not correct, right? So I think majority of what we all of what we were supposed to book in terms of these impairments, which we are aware of, has already been booked in 2024.

Maureen, Head of Investor Relations, True Corporation: Thank you, Nakul and thank you, Kankudasan. I’m conscious of time. We have only three minutes left now. We will move on to the Zoom (NASDAQ:ZM) questions. We start with Piyush first.

Hi, Piyush. Can we unmute Piyush? Sorry, it seems Piyush has dropped off the call. Maybe we move

Kun Nakul, Co CFO, True Corporation: on to one

Maureen, Head of Investor Relations, True Corporation: oh, you’re here. Okay.

Kon Manath, CEO, True Corporation: Yes, yes, I was just trying to unmute.

Kun Nakul, Co CFO, True Corporation: Thanks a lot, and congratulations to the management team for the excellent results and raising the guidance. One question two parts to the question. You are expecting the leverage to come down to below four times net debt to EBITDA by end of twenty twenty five. So how should we think about dividends in 2026 and beyond? And what is the comfortable level of leverage?

Because you’re expecting it to further go less than 3.2 by 2027. So you’re looking to continuously deleveraging or there is a threshold beyond which you will be comfortable to do more dividend payout?

Maureen, Head of Investor Relations, True Corporation: Is that all your questions, Piyush?

Punsuppashai, Analyst: Yes. Okay.

Maureen, Head of Investor Relations, True Corporation: Then, Kumnakul. Good.

Kun Nakul, Co CFO, True Corporation: I’ll take this. Thanks for your question, Piyush. And I’m happy that you are only one because means the rest of the questions have already been answered so far. What we have considered as an assumption on the dividend is more than 50% of the consolidated net profit has been considered in each of the years for the purpose of dividend calculation and also the leverage. Now, don’t please ask me to break down whether it is 50%, sixty %, seventy %, whatever.

We are saying that more than 50% is already considered for the purposes of dividend. And as we’ve maintained previously, we would like to strike a balance between the debt and the equity side. We want to reward the equity shareholders who’ve been with us over the last one and a half years phenomenal journey that we had. And at the same time, we are conscious of the high levels of debt in the company as well. So the guidance that we have given on the leverage, which is going down to less than 3.2 in 2027 is the level that we are comfortable with.

And that’s how it is coming in terms of the numbers for you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Piyush. No analyst call is complete without Kunbesut. Would you please unmute and turn on his video?

Giteson, Analyst, Innovacx: Thank you. Thanks for the opportunity. I have about three questions. Due to limited uptime, I just want to ask only one. I’m trying to figure out the EBITDA growth for this year that you guide about 8% to 10%.

But if I’m trying to subtract the efforting changes, I have got the number at about 5%. Could you please confirm me, am I right on that?

Maureen, Head of Investor Relations, True Corporation: That. Is that all your questions?

Giteson, Analyst, Innovacx: Okay. If I have more time, may I have two more questions? The first one, another one is about the two reasons strategy because we had quite a heavy write off last year. So what, probably you’re looking to scale down this business with Kelly in the future? What is basically the strategy of this one?

And my last question is about the spec options. It seems to me you are signal to the market trying to have the friendly options seems not working, especially after advanced management recently show intention to regain the leadership in detached telecom holding. What would be possible indications on your mid- to long term target if the option turn more intense than your plan? That’s all for me. Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kuntisud. We cannot accept any further questions. I’m really sorry, everyone. Let’s move on to Kuntisud first and we move on to Kuntisud for TBS.

Kun Nakul, Co CFO, True Corporation: Yes. Thank you so much, Kuntisud. On the EBITDA growth 8% to 10%, I think you probably need to redo the numbers a little bit, Nakad. This is not a six month impact of accounting changes. It is a five month impact.

So the benefit of these accounting adjustments will be less than 4%. And if it is less than 4%, then we are talking about 4% to 6% growth in every year to come from revenue growth, the synergies and all the works that’s there. On the spectrum option, maybe I can take that. I think Kurnmanath has explained this very well in one of the earlier questions that was raised in the room here. I don’t want to comment on whether the signal is well working or not.

We’ve reiterated in the past that we would like to renew the spectrum that is expiring at a reasonable price. If that were not to happen, there are alternatives available for us that we have already talked out and we will execute on that strategy. I will not comment any further on this because this is very speculative and there is a lot of game theory that can happen and there are possible scenarios in the spectrum auction and we are very well ready to participate in that. On the provision strategy on scaling down, for sure not, but maybe Kuntzarat can talk about what is our strategy on provision quickly, Nada? Yes, sure.

What we are doing here is that we continue to provide select portfolio of relevant content to our right customers. At the same time, please remind ourselves that Kunh Manhat mentioned in his presentation about launch of our new home Giga router, which is high speed. There is also we have connectivity of Donald. And what we’re doing is that we also introduced a new TrueID box, which is well enabled. So, what we would like to offer to customers is a complete integrated solution.

So, it’s not only dependent on the overall TVS only. Secondly, I have to mention that while we understand linear is going down, at the same time, we are refining our online market strategy in terms of going a bit high on OTT part of TVS Now, which we see initial signs of growth, but of course, it’s some time to go. So we have overall integrated plan to provide our customers an end to end solution, both postpaid as well as broadband Nakha. Thank you.

Maureen, Head of Investor Relations, True Corporation: Thank you, Kuntaram. Unfortunately, we’re already over time, so we need to end this call. Thank you, everyone, for joining, especially those of you in the room with us. I know there are a lot of questions unanswered. Please get in touch with me.

We’ll get back to you within today. Thank you so much and take care. Have a great weekend.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.