Earnings call transcript: True Corp revises guidance in Q2 2025

True Corporation (TRUE) reported Q2 2025 service revenues up 1% year-on-year to THB 41.4 billion, with EBITDA remaining flat at THB 25 billion and a normalized profit of THB 4.2 billion. The company revised its full-year service revenue growth guidance downward to 0-1% (from 2-3%) and EBITDA growth to 7-8% (from 8-10%), citing macroeconomic challenges, reduced tourism, and a network outage. Despite these short-term pressures, True highlighted successful spectrum acquisition and ongoing network modernization efforts, reiterating unchanged long-term guidance for EBITDA margin and CapEx intensity, and announced a planned interim dividend exceeding 50% of net profit, signaling confidence in its strategic transformation amidst a complex operating environment.

Analysis

True Corporation's Q2 2025 results present a narrative of short-term operational headwinds contrasted with significant long-term strategic repositioning. While service revenues saw a marginal 1% year-over-year increase to THB 41.4 billion and EBITDA remained flat at THB 25 billion, the primary development was the downward revision of full-year guidance. The company now projects 0-1% service revenue growth, down from 2-3%, and 7-8% EBITDA growth, reduced from 8-10%, citing macroeconomic pressures in Thailand, a one-off network outage, and lower-than-expected tourism. This revision explains much of the stock's 56% year-to-date decline.

Despite the muted outlook, management is executing on key initiatives aimed at strengthening its competitive footing. The successful acquisition of 90 MHz of new spectrum and ongoing network modernization are central to its strategy, which the CEO believes will provide a significant "competitive edge" and superior network experience. Operationally, the company is demonstrating discipline by focusing on higher-value subscribers, which drove a 5.6% YoY increase in blended ARPU, and achieving an 8% YoY reduction in OpEx. Management's confidence is further underscored by its commitment to maintain its long-term guidance for 2027 and the announcement of a planned interim dividend exceeding 50% of net profit, signaling a strong belief in future cash flow generation despite near-term challenges.

Key Decisions for Investors

• Investors should weigh the revised near-term guidance, driven by macroeconomic and operational headwinds, against the potential long-term value creation from the company's enhanced spectrum portfolio and network modernization.
• Monitor the company's ability to sustain ARPU growth and operational cost discipline in subsequent quarters, as these are the primary drivers validating its strategic shift toward 'quality' subscribers and efficiency.
• The planned interim dividend of over 50% of net profit should be viewed as a strong signal of management's confidence in financial stability and future cash flows, potentially providing valuation support for the stock.
• Closely track the external risks cited by management, particularly Thai GDP forecasts and tourism data, as these factors were key drivers of the guidance cut and remain critical to the company's performance in the second half of the year.