AIS cuts revenue target

       The mobile market leader Advanced Info Service (AIS) revised down its 2009 revenue growth target and capital expenditure plan in light of the worsethan-expected operating results in the first half.
       The company reduced its revenue growth target from a range of 3-4% to between -3% and zero this year. It also trimmed the capital expenditure plan to 11 billion baht from the original 13-15 billion.
       However, AIS affirmed its target of free cash flow growth of 15% this year thanks to a 6% reduction in total costs following a series of internal cost-control measures.
       Its earnings before interest, taxes,depreciation and amortisation (EBITDA)margin also increased slightly to 44.8%in the second quarter, from 42.5% in the same quarter last year.
       "The guidance figure reduction was based on the calculated factors of no improvement in second-quarter performance and no clear signs yet of a fast economic recovery," said Pornrat Janejarassakul, vice-president for marketing and planning of AIS.
       AIS's net profit fell 33.7% year-onyear to 4.2 billion baht in the second quarter. Revenue fell 6.5% to 23.6 billion baht. First-half net profit was 8.8 billion baht, down 23.5%, on revenue of 47.8 billion, down 6% from a year earlier.
       Mr Pornrat attributed the poor performance to a sharp drop in tourist numbers due to political tensions and the H1N1 flu, which resulted in a 34%drop in its international roaming revenue and a 13% drop in international direct dialling earnings.
       "The 43% reduction in our international roaming revenue in the second quarter plunged to a record low figure,"he said.
       Mr Pornrat said AIS decided to reduce its investment budget in order to match the stagnant growth in the local mobile market. The company spent around 5.9 billion baht on expanding its existing 2G network in the first half.
       AIS expects positive growth in the fourth quarter, aided by high seasonal business, economic improvement and a tourism rebound.
       This year, AIS expects 3 million new subscribers out of a forecast industry total of 6 million.
       However, Mr Pornrat said the number of new subscribers did not necessarily mean business was very healthy as some mobile users now have two or more SIM cards.
       For AIS, he said revenue growth provided an indication of business growth.With a 6% reduction in voice revenue in the first half, AIS was shifting its focus to non-voice services with a growth target of 20% this year.
       Non-voice revenue now contributes 16% of total revenue for AIS, up from 13% last year.
       AIS shares (ADVANC) rose 75 satang yesterday on the Stock Exchange of Thailand to close at 89 baht, in trade worth 288.5 million baht.