Mobile Revenue Growth: 4.8% year-on-year increase. Broadband Subscribers: Reached 5 million. Enterprise Nonmobile Growth: 22% year-on-year increase. Sales Margin Improvement: Increased from 1.8% in 2023 to 5.6% in 2024. Net Profit: THB35 billion and THB75 million, a 21% year-on-year growth. Leverage Ratio: Declined from 2.9 times in 2023 to 2.2 times in 2024. Dividend Per Share: THB10.61 with a payout ratio of 90%. CapEx Budget: THB26 billion to THB27 billion.

Warning! GuruFocus has detected 8 Warning Signs with AVIFY.

Release Date: February 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Advanced Info Service PCL (AVIFY) reported a 4.8% year-on-year growth in mobile revenue, driven by superior network and rising data consumption. The broadband business maintained momentum, reaching 5 million subscribers, supported by network expansion and value-added services. Enterprise non-mobile revenue grew 22% year-on-year, driven by strong demand for connectivity and cloud services. The company exceeded its guidance upper bound for both core service revenue and EBITDA, reflecting strong business performance and operational efficiencies. A net profit of THB35 billion and THB75 million was achieved, representing a 21% year-on-year growth, with a dividend per share of THB10.61 approved for a full-year payout ratio of 90%.

Negative Points

The company faced mixed market sentiment due to weak consumer confidence and slow private investment in Thailand. There is a cautious outlook on EBITDA growth, which is expected to align with revenue growth at 3% to 5%, despite being an infrastructure capital-intensive business. The integration efforts, while on track, require significant focus on IT integration to achieve a unified operation by 2026. The CapEx budget for 2025 is substantial, around THB26 billion to THB27 billion, with emphasis on modernization and integration costs. Concerns were raised about the potential impact of spectrum auction outcomes on future network CapEx and competitiveness.

Q & A Highlights

Q: What is the outlook for data consumption growth in the consumer segment, especially with the rise of AI technologies? A: Pratthana Leelapanang, Chief Consumer Business Officer, explained that data consumption is expected to continue growing, particularly as more devices can broadcast data. AI technologies will likely facilitate more information processing, leading to an estimated 15% year-on-year growth in data consumption over the next three to five years.

Q: Why is the EBITDA growth guidance similar to the revenue growth guidance of 3% to 5%? A: An unidentified company representative noted that the EBITDA growth reflects variable costs that impact the EBITDA line. The depreciation and amortization levels are expected to remain similar year-on-year, aligning EBITDA growth with revenue growth.

Story Continues

Q: What are the implications of acquiring additional spectrum in the upcoming auction? A: Pratthana Leelapanang stated that acquiring additional spectrum, such as 1,800 MHz, would require minimal additional network CapEx due to existing infrastructure. However, acquiring new spectrum bands like TDD would necessitate more investment.

Q: Can you elaborate on the changes in prepaid ARPU and the impact of tariff rationalization? A: Pratthana Leelapanang highlighted that the focus on quality customer acquisition and eliminating unsustainable plans has led to an increase in prepaid ARPU. The industry is moving towards more sustainable pricing, which has helped rationalize market offerings.

Q: What are the plans for synergy and cost savings between AIS and 3BB? A: Tee Seeumpornroj, CEO of Broadband Business, mentioned ongoing efforts to integrate networks, consolidate shops, and optimize procurement to achieve cost savings. The goal is to have a unified operation by the end of the year or early next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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