The Business Times (15 November 2007)
Earnings worse than expected as number of post-paid customers declines.
Earnings worse than expected as number of post-paid customers declines.
ADVANCED Info Services (AIS), Thailand's largest mobile phone operator and the crown jewel of Shin Corp Plc, a company that is majority-owned by Singapore's Temasek Holdings, reported worse-than-expected earnings for its quarter ended September. There was a decline in the number of its post-paid subscribers.
AIS said profits fell to 3.5 billion baht (S$160 million), a 4.1 per cent drop quarter on quarter or a 3.9 per cent drop year on year. Service revenue fell 5.7 per cent year on year.
AIS, which has just over 23.2 million customers out of the 65 million population of Thailand, said revenues were helped by an increased contribution from the sale of handsets.
Selling and administrative costs fell 12.9 per cent year on year due to lower bad debt provisions. Earnings for the first nine months of the year stood at 11.2 billion baht, down 14.6 per cent and only about 68 per cent of consensus market forecasts.
AIS director Vikrom Sripataks said that at the end of the third quarter, the company had generated an earnings per share of about 1.19 baht, which was a decrease from 1.24 baht per share seen during the same period last year.
Mr Vikrom said there were just 513,000 new subscribers in the quarter, down from 1.6 million of new subscribers in the second quarter.
Of total new subscribers, there were 734,200 pre-paid accounts, while post-paid subscriptions fell by 221,200 - something he attributed to the company not promoting as much as it did in the second quarter.
He said in the quarter, there were revenues of 22.41 billion baht, 2.3 per cent up from a year ago due to the growth of subscribers.
The company had generated around 19.08 billion baht in revenues from services in the third quarter of this year, 5.7 per cent up from the same period last year but 2.6 per cent down from the second quarter's 19.6 billion baht.
The proportion of marketing expenses to total revenue decreased to 3.3 per cent in the third quarter from 3.5 per cent a year ago and 3.8 per cent in the second quarter due to low marketing activity for seasonal reasons.
Analysts said that the decline in the earnings was mainly due to seasonal factors, something which was also seen in Singapore and in the results of AIS's Thailand-listed rival, Total Access Communications.
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