Release Date: May 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 strong bottom line growth driven by a profitability-focused strategy and efficient spending. Mobile revenue grew by 4.3% year on year, supported by superior network quality and a value uplifting strategy. Broadband growth of 10% year on year was driven by high-quality subscribers and value-added service bundles. Enterprise services saw double-digit growth year on year, fueled by rising demand for connectivity in Thailand and the CLMV region. The company's financial position remains solid, with an improved leverage ratio and decreased average cost of borrowing.

Negative Points

The company remains cautious due to macroeconomic factors such as trade tariffs affecting GDP and FX, and local challenges like delayed government spending. There is pressure on the low-end segment from high household debt, which could impact future growth. Device sales margins declined due to promotional campaigns and tax incentive schemes. The company faces seasonal slowdowns in Q2 and Q3, which could affect overall performance. Tourism, which contributes significantly to Thailand's GDP, remains a concern due to potential declines in tourist arrivals.

Q & A Highlights

Warning! GuruFocus has detected 10 Warning Signs with AVIFY.

Q: What are the underlying economic assumptions for your EBITDA guidance, considering the economic headwinds expected in the second half of the year? A: We have revised the GDP down to 1.8% and are taking a cautious view on the second and third quarters, which are typically low seasons. Therefore, we are maintaining our current guidance. (Unidentified_3)

Q: Can you explain the strategy behind the mix of prepaid and postpaid services and its financial implications? A: We have been focusing on repairing market prices by canceling unprofitable plans, which has positively impacted prepaid revenue. The market dynamics between prepaid and postpaid are becoming similar, with customers choosing based on payment preferences. (Unidentified_4)

Q: How is the company managing postpaid churn, and what are the targets for handset sales margins? A: We are focusing on acquiring quality customers, which has reduced churn rates. For handset sales, we aim to achieve a 5% margin this year, supported by strategic pricing and partnerships with mobile brands. (Unidentified_4 and Unidentified_7)

Q: How does the adoption of AI in call centers affect operational expenses? A: AI implementation is not only for cost reduction but also for increasing efficiency. It helps maintain operational costs despite increased activity, and we plan to extend AI use across various processes. (Unidentified_9)

Story Continues

Q: What is the impact of the potential removal of the foreign ownership limit in the telecom sector? A: We currently do not have detailed information on this development. However, we will assess its impact on the industry once more details are available. (Unidentified_3)

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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