Good evening, everyone. Welcome to True Corporation's earnings disclosure for the Q2 of 2024. My name is Naureen. I'm the head of investor relations. With me today is our CEO, Khun Manat, our deputy CEO, Khun Sharad, and our co-CFO, Khun Nakul. Our presentation and additional materials are already available for download from our investor relations website. It has also been circulated through email. To ask questions in this session, please raise your hand, or you can write in the chat box.
If you are unable to do either, please reach out to me over phone or email. We will be taking Q&A after the end of our presentation session. For now, let me welcome Khun Manat, our CEO, to start our presentation.
Okay. Thank you. Good evening. Good evening, everyone. Thank you for joining our Q2 online meeting. I'm so excited to share some fantastic progress and dynamic developments at True Corporation today. Our journey to 2024 has been marked by a seamless integration of our operations and the ongoing dedication of our team. In Q2 2024, we have achieved six consecutive quarters of EBITDA growth, with 9% year-on-year EBITDA growth, driving our EBITDA up to THB 24.3 billion.
This consistent performance reflects our strong commitment to driving profitability and efficiency across the organization. Our sustained profitability is evident with a normalized impact of THB 2.4 billion in Q2 2024. We also made significant progress in network modernization, with 42% of our network modernized, completing 7,100 sites since amalgamations. However, we are mindful of the macroeconomic challenge, with slower development impacting the GDP forecast of Q2.
Despite these hurdles, our strategy and disciplined approach continue to yield tangible outcomes, positioning us for the sustainable growth. Our dedication to delivering a number-one world-class customer experience is clear through our AI-powered initiative. We are proud to maintain the widest 5G coverage in Thailand, with 99% coverage in BMA, EEC, and 92% nationwide. Our modernization efforts have doubled the speed of our 5G network, with 7,100 sites already modernized.
This extensive network supports our leadership in tourists and migrants and ensures high customer satisfaction through AI-powered customer service and seamless omnichannel experience. Our commitment to improve customer satisfaction is reflected in our consistently rising NPS score over quarterly. This dedication has led us to achieve the largest number of 5G subscribers in Thailand, reinforcing our position as the preferred provider of 5G.
We continue to support our customers across our shops, ensuring that their needs are met with exceptional service quality. Ensuring a number-one future-ready performance is central to our strategic direction. We have embarked on comprehensive technology operation transformation in partnership with industry leaders. Our goal is to be the digital first, integrating with touchpoints seamlessly and enhancing AI capability to serve our customers better.
One of our key strategic partners is TCS, so-called from the Tata Consultancy Services, or we call so-called TCS, the backbone for many world-class hyperscalers in the world. TCS helps us in future-ready IT operations, enhancing our IT capability and accelerating transformation. This partnership will enable us to fulfill our telco tech vision. The first step of this will benefit the chain and make the long term with the quantifiable savings expected from year two.
Speaking of the cloud, data centers, and AI, we are using the full power, including the experience of our major shareholders, CP Group, Telenor, China Mobile. We are working closely with our strategic partner, with our sister company, True IDC, or True Internet Data Center, the biggest data center provider in Thailand, to speed up Thailand's digital transformation. Go to the part of the ESG.
Our ESG-driven digital transformation is at the forefront of the strategy, emphasizing sustainability, social responsibility, and strong governance. We are leading with the e-Waste HACK BKK 2024 project, turning e-waste into valuable innovations. We are also pushing for the net zero by 2050 by engaging our suppliers in climate action. We have introduced Cell Broadcast for emergency alerts in the five languages, and many people have seen enhancing the safety across Thailand.
Our use of AI data analytics is helping eliminate scam call centers, supporting government efforts. True Corporation has been honored as an outstanding organization in anti-corruption for 2024. We are also strengthening our AI governance for the Mari [audio distortion] assistant ecosystem, ensuring the robust and ethical AI use. This initiative showcases our commitment to integrating ESG principles into our operation, driving sustainable and responsible growth. Okay, let me hand over to the exciting part to Khun Nakul.
[Foreign language] Thank you so much, Khun Manat. Let me walk through the financial performance of Q2 2024. First, the financial highlights for the Q2 of 2024. We are comparing ourselves against the first full year of operations for True. Hence, what we are saying is we are doing a comparison on a year-on-year basis. If you look at the service revenue, we are reporting a 5.7% growth year-on-year on service revenue and a 0.6% QoQ.
The EBITDA growth is 9% on a year-on-year basis, which normalized for the one-time effect that we had in Q2 last year is about 15.5%. This normalization has already been disclosed to you. On a QoQ basis, we continue our momentum to increase our EBITDA by THB 733 million, or approximately 3.1% QoQ. As Khun Manat mentioned, it's the sixth consecutive quarter of growth for us.
Happy to report a normalized net profit of about THB 2.4 billion this quarter, which is about THB 1.6 billion higher than the previous quarter where we reported THB 0.8 billion. Most importantly, our leverage, which stood at 5.7x in Q2 of last year, has gone down by one turn to 4.7x, which is a reduction on a year-over-year basis. QoQ, we see a reduction of 0.3x as well. Looking at the performance in the H1 of 2024, we have taken this opportunity to revise the guidance for the full year 2024.
Let me then start to explain the performance in a little bit more detail. First, we see a 5.7% growth year-over-year in service revenue, which is driven by strong performance management across all business segments. Let me explain that in a little bit more detail. First, on a QoQ basis, we see a revenue increase of about 0.6%.
However, on a year-on-year basis, the improvement is primarily driven by uplift in the mobile and online segments. I'll explain that in a subsequent slide. The product sales increased 3.4% on a year-on-year basis, but it declined quarter-over-quarter by 10.7%. Of course, it is affected by seasonality. Actually, it's a 3.4% increase on a year-on-year, and quarter-over-quarter is a 10.7% decline. As a consequence, the total revenue increased 4.4% year-on-year for the Q2, mainly driven by growth in the service revenues.
If we look a bit deeper into the service revenues, first, let me talk about the mobile segment. We see a 5.2% growth year-on-year in terms of the mobile business, which is primarily coming on account of an uplift in ARPU of about 3.9%.
If you go from right to left of the screen, as you can see, postpaid ARPU, prepaid ARPU, and blended ARPU all have shown a growth trend in this quarter and on a year-on-year basis as well. The blended ARPU has improved 1.9% QoQ to THB 207 , with postpaid ARPU improving THB 8 quarter-on-quarter and prepaid ARPU improving THB 3 on a quarter-on-quarter basis. On the subscribers, we continue with our initiative of focusing on quality acquisitions, especially in the prepaid business.
As a consequence, we see a 1.7% decline in prepaid subscribers and a 1.3% on a year-on-year, which, like I said, is focused on quality subscribers for us. There is an insignificant impact on revenue.
As a consequence of the ARPU growth and the growth in subscribers, we see a mobile service revenue growth QoQ of about 0.8%, 5.2% on a year-on-year basis. Please also note that the mobile service revenue growth was also benefited by higher contribution from domestic roaming of about THB 0.2 billion and also, of course, the effect of the base management, as you can see from the improvement in ARPU as well. I move on to the online business.
We see a 5.5% growth year-on-year in the online revenues, with almost a 10 percentage point improvement in the ARPU. The ARPU has improved THB 14 on a QoQ basis, and there is also a marginal improvement in the subscribers. So we, in a way, have bucked the trend on the negative net adds that you saw in the previous couple of quarters.
As a consequence, with a 3.1% decline in the subscribers and a 9.6% increase in ARPU, which is mainly driven by the removal of discounts, as we have highlighted in the past, and also a deep focus on upselling our customers to higher value packages, we see almost a 5.5% growth in revenues and a 0.9% growth on a quarter-on-quarter basis, 5.5% being year-on-year growth for us.
Then the TV business has seen a 7% growth in the business on a year-on-year basis. However, as we have seen, the subscription revenue remains under pressure. The ARPU is marginally lower at about 0.5%, but almost on par or slightly higher on a year-on-year basis. The subscribers are slightly lower as the market focuses on moving to OTT.
As a consequence, the revenue has regrown about 4.4% on a quarter-on-quarter basis, with slightly lower revenues coming on account of this others component, which is basically on music and entertainment. But on a year-on-year basis, because of the higher music and entertainment business, we are growing about 7%. Then to the item that we are quite proud of, now I switch to the OpEx. We see a 3.9% year-on-year decline in normalized OpEx, which is mainly benefited by the synergies and strong focus on performance management.
Let me walk you through each element of the OpEx one by one. The regulatory cost has increased 9.1% year-on-year due to a higher effective rate of NBTC, which, if you recall, we had explained in the previous quarter. The interconnection cost in Q2 2023 was benefited by a one-time effect of a reversal of provision on account of a litigation settlement.
As a consequence, you see an increase on a year-on-year basis. The network cost has declined 7.6% year-on-year, which is driven by savings on account of the network modernization, which Khun Manat also explained that we are actually trending quite well in terms of the site modernization. Please also note that there is a lower electricity tariff on a year-on-year basis that also has led to the year-on-year decline in the electricity costs.
The cost of sales has declined 6% on a year-on-year basis as well. The selling general and admin expenses, the one area that you always ask questions on, and you ask whether the trend that we see on SG&A is going to continue in the future.
So we come back with another quarter of reduction in SG&A, which now stands at about 5.7%, or a 14.2% decline on a year-on-year basis, which is benefited by the synergies, mainly on account of optimization of commission, on account of optimization of marketing expenses, and the benefits that we get from organization modernization. The other cost of providing services has increased 1.3% year-on-year in line with the increase in revenues.
In fact, the increase in other costs of providing services is lower than the increase in revenues that we've seen on a year-on-year basis, so it means this is also well managed as well. Then I move on to the EBITDA picture. As Khun Manat mentioned, we see six consecutive quarters of growth in EBITDA, which has now witnessed about THB 4.9 billion growth since amalgamation.
If you can see from the graph, there is a reported increase in EBITDA of about 9% from THB 22.3 billion in Q2 of 2023 to THB 24.3 billion in Q2 of 2024. But as I mentioned, there was a one-time effect that we had in Q2. If we normalize for that, we see a 15.5% growth. The EBITDA has improved by THB 0.7 billion QoQ, an increase of about 3.1%.
And EBITDA to service revenue has improved to now almost touching 59% for Q2 of 2026, which is, sorry, Q2 of 2024, which is a growth of about 1.8 percentage points on a year-on-year basis. Then let me move on to the profit picture for the company. We see a THB 2.4 billion normalized profit in Q2, which is an improvement of about THB 1.6 billion QoQ.
The net profit in Q2 was negatively impacted, as we had expected and we had highlighted to you, due to the one-time effect on organization, on basically doing the write-off of the redundant assets on account of network modernization, which stands at about THB 4.3 billion. The net profit in Q2 2023, if you recall, was also negatively impacted by one-time effects of about THB 0.5 billion.
So if you normalize for all of this, we see a significant increase year-on-year in the normalized performance of the company, roughly about THB 4.2 billion increase. The CapEx in Q2 stood at THB 6.1 billion. So in total, we are almost THB 10 billion for the year as far as CapEx is concerned for the H1. Overall, before I move on to the next slide, THB 2.4 billion normalized profit, which is almost 3x the profit that we saw in the previous quarter.
Then another very important element that we are focusing on is our net debt. We see a THB 27 billion reduction in the net debt over the past one year. From THB 462 billion that we saw in Q2 of 2023, we are sitting at THB 435 billion in Q2 of 2024. Like I said, THB 27 billion reduction. More importantly, the leverage, which was 5.7x, as you all know, was quite high, has very quickly reduced by one turn to about 4.7x in Q2 of 2024.
This quarter, we have also indicated the effective interest rate, which is basically a combination of gross interest expense on loan and debentures, which is divided by average gross debt, again on the loan and the debentures, which stands at a healthy 4.1%. The debt maturity profile is what you see on your slide, which shows the repayment profile in 2024, 2025, and 2026.
In this quarter, we've actually issued debentures of about THB 15 billion at a weighted average interest rate of 3.8%. We've also secured JPY facility of about $700 million to be utilized for the repayment of USD loans. As we have said in the past, there is a good arbitrage in terms of the rate of interest on the USD loan and the Japanese yen loan. We also have an upcoming debenture issuance, which is with the expected subscription period between August 27-29.
We will share more details on the sizing in the coming days. Since we have passed the end of H1, we are also showing you a comparison of 1H 2023 versus 1H 2024. Going from left to right, we see a total revenue improvement of about 2.2%. As you can see, a significant improvement is coming on account of the service revenues.
The total OpEx, excluding D&A, has declined 7.1% for H1 2024 versus H1 2023. As a consequence, the EBITDA for six months or for the H1, on a reported basis, though it shows a significant increase of 14.8%, on a normalized basis for the one-off that I had mentioned, is increasing 18.3% for H1 2024 versus H1 2023. As a consequence, the net profit after tax on a normalized level has seen a THB 5.9 billion improvement as well.
I will end my presentation with indicating the guidance that we have for 2024. As I had mentioned earlier, we are extremely proud to announce that we are revising our guidance upwards. The service revenue, excluding interconnect, which was indicated as 3% to 4% for the full year of 2024 versus 2023, is now revised to 4% to 5% growth.
The EBITDA, which was expected to grow 9% to 11% in 2024 versus 2023, is now expected to grow 12% to 14%, a 3 percentage point increase from the last guidance. We stick to the CapEx guidance that we had given in the beginning of the year, which was THB 30 billion for the full year. Also reiterate the normalized profit guidance that we have of staying profitable for the year 2024, having reported Q1 and Q2 of a good amount of normalized profit, THB 0.8 billion in Q1 and THB 2.4 billion in Q2.
Please note that the normalized profit excludes the impact that may come from the write-off of the redundant assets on account of network modernization. And the write-off definitely helps the D&A, which is the depreciation and amortization going forward. With this, I end my presentation and hand it over to Khun Naureen. Thank you.
Thank you, Khun Manat. Thank you, Khun Nakul. We already have some questions on the chat box, but let us first take the questions live. The queue for Q&A is being shared in the chat box. If you could please keep your eye on that. We have some brief questions on the chat box. Let me go through them first. This question is from Khun Natapop from Thanachart Securities. Thanachart Securities, sorry.
May I ask on site modernization, whether it means upgrade of technology, change of equipment, or elimination of redundant sites? Is there any color you can add to the actual activities? Khun Nakul, you can take this one.
Yeah. Okay. Thank you for your question, Khun Natapop. It's actually a combination of all three, Nakul. We are obviously of sites that we have on our network, which improves the overlap in terms of sites.
With this, we also take the opportunity to upgrade the site that is going to be used in the future, which means that site needs to have actually needs to withstand a higher load. So that's why we need to modernize the site as well. And by modernizing the site, we also make sure that we can try to utilize the spectrum much better, try to reduce the space on the towers, and have better performance in terms of electricity consumption.
So actually, it's a combination of all the three things. It's a combination of dismantling a site, improving the condition of an existing site, and modernizing the site as well so that the electricity consumption is future and the site is more able to radiate better spectrum and full spectrum of the company. Thank you, Khun.
Can we try Khun Pisut again?
Why don't you say that it's okay?
Okay. While we wait for that, Khun Pisut, please just hold on for one more minute. We have another question. This is from Khun Jean from KKPS. Why did interest expense decline year-over-year and QoQ? Khun Nakul, would you like to take that one?
Yes. I can take that. Thank you for your question, Khun Jean. The interest expense has declined on a year-over-year basis and on a QoQ basis because, as you can see, our net debt has declined as well over the same period. If I just look at the numbers, you can see that there is a reduction in the net debt over this period.
What we've also done is, as I had mentioned, because we have taken a Japanese yen loan, which is we've taken the opportunity to having the Japanese yen loan to voluntarily prepay the US dollar loan of about $750 million, which is roughly about THB 26 billion, which was supposed to be due in 2025. The difference between the two loans is approximately 50-60 basis points in terms of the interest.
That helps us in saving the interest cost as well. So besides the overall reduction in the net debt, which reduces our interest expense, there is a voluntary prepayment of USD loan towards the last half of the quarter, and that helps us in reducing the cost as well.
If you also notice that what we have been doing is we have been raising new debentures in the market, which are also at a good rate of interest. So the last round of borrowing that we had done was about THB 15 billion at an effective interest rate of about 3.8%. And when our total average cost of debt is about 4.1%, to raise new debt at about 3.8% brings the effective cost down as well. So these are the multiple reasons why the interest expense has actually gone down on a year-on-year and on a quarter-on-quarter basis.
Okay. I think we have solved the sound problem now. Maybe we try one more time, Khun Pisut. I'm really sorry about this. Can we? Yes, we can. Okay. Yes.
Thanks for the opportunity and congrats on your strong performance this quarter. This is from Kasikorn Securities. May I have three questions?
My first question is about the prepaid ARPU. I noticed that your prepaid ARPU in Q2 was up nicely to THB 112 . But it is still below the combined prepaid ARPU of the dtac and True in Q2 2019, which was THB 136 . Despite the fact that your prepaid subscribers in this quarter were much lower than Q2 2019 in combined. And moreover, your prepaid ARPU was far below AIS prepaid ARPU, although you hold quite a bunch of low-band spectrum bandwidth.
What would be your strategy to fix your prepaid ARPU in the short and medium term? This is my first question. My second question is about your bandwidth sufficiency.
Considering the amount of bandwidth you have and the natural growth of the bandwidth consumption you have projected in the future, when would you need to acquire more bandwidth other than the one you subleased from NT, which is about to expire next year, in order to maintain the service quality? Or would there be other options apart from additional bandwidth acquisitions if you want to maintain the service quality until 6G spectrum becomes available?
And my last question, just want to hear from you about when would the integration cost or any other kind of one-off item be reduced significantly that would turn your net loss into net profit at the reported basis? Thank you, Khun.
Thank you so much, Khun Pisut. Let me turn over the first question to Khun Sharad on the prepaid ARPU.
Thank you, Khun Pisut. Good to hear your voice.
We all wholeheartedly accept your congratulations. Thank you very much. On your first question on the prepaid side, Khun, it's a very good observation. Prepaid ARPU definitely got benefited from focus on our quality acquisition along with healthy top-up growth from our existing base. Please recall that we have been focusing on digital channels, and that also helps the ARPU growth. This is all happening when we are focusing on quality subscriber acquisition.
On your point about True and dtac separately, I think I can say we are coming very closer to that. Finally, our continuous efforts on quality acquisition for the market and also fortifying these prepaid subscribers with rich value services, we are quite confident that we should continue to follow this path, Nakul. Thank you.
Thank you, Khun Sharad. We move on to Khun Nakul for the remaining two questions on bandwidth and integration cost.
Yeah. Okay. Thank you so much, Khun Pisut. You're always the first one to ask questions, so this was no surprise. On the bandwidth sufficiency, Nakul, as we have shared in our spectrum strategy, we intend to make sure that we continue to use the 2300 MHz spectrum that we currently have from NT, which is supposed to be reallocated by means of auction.
If we are able to do that, then we will be in a strong position to have a good portfolio of mid-band spectrum. And then, as we modernize our network, as we build a future-proof network, we'll be able to dedicate the entire 2600 MHz spectrum, which is 90 MHz with us, for 5G.
The moment we are able to do that, there is no immediate need for additional spectrum for us. So that's the answer to the spectrum sufficiency question. You also asked about any spectrum auction expected in the future, if I understood your question right. The answer is there is only one spectrum round that has been announced by the regulator, which is supposed to happen in Q1 or next year.
That's what we know. But like I said, there is no immediate need for us for additional spectrum because our spectrum strategy is quite foolproof. You also asked a question about the integration cost and when it is expected to reduce significantly. Our integration cost is mostly related to actually modernizing our network. As we maintained in the past, a significant portion is actually CapEx.
Whatever cost was pertaining to people modernization or organization modernization has already been booked in Q4 of 2023, even though the payout is going to happen as we continue to modernize our organization. So from a P&L standpoint, it's already in the books. And I guess you're concentrating on the P&L view because you're looking at profitability for the company.
We have maintained that of the 17,000 sites that we want to dismantle or we want to modernize as part of the network modernization program, we will do approximately 10,000 until the end of this year. And so far, we've already done 7,100, as Khun Manat had explained. So there is another 2,900 to go. We expect the total modernization program to be completed by Q3 of 2025.
Until then, to the extent of the sites that we modernize and dismantle, there is going to be a one-time cost that's going to be coming in. We also reiterate the guidance that we see. There is a significant improvement in the normalized profit of the company, which obviously augurs well for the future. And of course, there is this one-time element of cost that is being recorded, but that definitely benefits the depreciation and amortization in the future.
As you can also see, there is a significant QoQ reduction on the D&A. So long story short, as we complete the modernization program, which will be by Q3 of 2025, all the write-offs will already be exhausted in the books. So it's going to come every quarter going forward. The magnitude is going to depend on the sites that we dismantle.
But as you said, 42% has been done already. I hope that answers your question, Khun.
Thank you, Khun Pisut. Arthur, if you're still there, we can move on to you. Yes. Hi.
Hi. Can you hear me? Yes, we can hear you. Hi. Thanks for the opportunity. Two questions, please. Firstly, on the margin, how should we interpret the change in growth guidance for EBITDA? Is this front-loading of the benefits because you're seeing them come in faster, or are you seeing incremental benefits which are not previously budgeted? Just wondering how this impacts your targets for 2027, 2028 based on your capital markets today.
Second question I had is on the revenue outlook. What do you think is driving this up versus your prior expectations? The momentum is quite impressive, around 6% growth, considering GDP has been downgraded to around 2% level. Basically, why are Thai consumers spending up when there are no major price increases happening in the market? Thank you.
Thank you, Arthur. Khun Nakul, would you like to take them?
Yeah. Thanks for the question, Arthur. Good to hear your voice. You're asking about the margin and the improvement that we see in the performance. Actually, if we just look at our H1, and we do not assume any further growth in H2, we are already sitting at 4.4% growth in the revenues and about 12.6% growth in the EBITDA on a year-on-year basis. So actually, looking at the trajectory of the performance, we have revised the guidance for the year.
This is a combination of many things. I mean, one is, as we had explained last year, we saw the momentum on the integration plan or the synergy realization was actually faster than what we had expected.
We see that momentum carry on in 2024 as well. So that's actually one of the reasons. In terms of the total NPV that we see on the synergies, there is going to be an increase in the total NPV, and that's primarily coming on account of the fact that we've had faster realization on the synergies. So the NPVs are going to be higher. In terms of the total synergies on a gross value basis, those are expected to be more or less the same, except for the significant savings that we've got on the CapEx.
And that's the reason why if we compare to what we had mentioned in the capital markets today, our CapEx guiding for 2024 was already lower than what we had indicated in the CMD. And that benefit is going to continue in the future as well, at least on the CapEx side.
Then, to your question on the revenues, why have we increased the guidance on the revenue? We are actually seeing the improvement in the revenue basically come on account of the following factors. One, there is an improvement in ARPU in the mobile business from strong focus on performance management, which has also been benefited from the influx of tourists in the Q1 of this year, which was higher than what was anticipated. And this is also going to be higher in Q4 of 2024.
As we know, Q4 is a seasonally good quarter. So the total number of tourists expected this year are actually around 36 million in Thailand, which is slightly higher than the previous estimates. There is also growth in the online business, which is primarily led by higher ARPU.
As you can see, there's a THB 14 growth in ARPU that we've seen in Q2, which is almost 10% increasing on a year-on-year basis. With the stabilization of the net adds that we have in this quarter, there is a growth in the business expected as well. We also take a lot of pride in our strong focus on base management.
I mean, I think Khun Sharad had explained what we are doing in terms of the base management that also helps us in improving ARPU. Even though the macroeconomics have been softer, as what we had seen in the previous quarter, we are still able to grow the ARPU using our CVM or customer value management capabilities.
Last but not the least, we also have domestic roaming revenues from National Telecom in this quarter, which is roughly about THB 200 million higher than what we saw in the Q1 of this year. And that has also been factored into the guidance that we have given for the year. Yeah.
Okay. Thank you, Khun Nakul. Thank you, Arthur. We move on to Khun Wasu.
Hi. Good evening. And thank you for the presentation. And congratulations on the strong results. So the first question I have is on roaming revenue from National Telecom. So have you done any new deal with National Telecom? And is this revenue recurring? So that's the first question. And the second question is about the subscriber trend.
Since you lost a lot of prepaid subscribers in the Q2 and in the Q1 as well, so what's the subscriber trend in the H2 of the year? My third question is about the DNA cost savings. So in the Q2, True saw a reduction of DNA expenses. The QoQ drop was THB 500 million. Is it fair to assume that the pace of the decline will ease in the coming quarters because you need to eliminate only 3,000 towers in the H2 of the year to achieve the full-year target?
And the next question is on the loss on handset sales. So why was the loss on handset sales so small in the Q2? And what's the trend going forward? And finally, for the interest-bearing debt, it dropped by 4% QoQ. What's the trend of the interest-bearing debt in the coming quarters?
And how much did you prepay the US dollar loans in the Q2? Is there going to be more prepayment in the coming quarters? That's all my questions.
Okay. So maybe we go to the subscriber question first, Khun Sharad, and then we come back to Khun Nakul.
Yeah, sure. Thank you. Good to see you, Khun Wasu. You're talking about the trend going forward. And what we can mention is that we will continue to focus on quality subscriber additions going forward, as we have witnessed in this quarter, Nakhab. At the same time, very important and strong focus on ARPU via fortifying our customers with rich services, as I alluded to.
At the same time, we also continue to work towards migrating the prepaid customers towards the postpaid side so that we continue to provide value-added services by means of postpaid.
So that is what we can confirm in terms of trend for subscribers going forward, Khun. Thank you. Thank you, Khun Sharad. Can we move on to Khun Nakul for the remaining questions?
Yeah. Okay. Thanks. Thanks so much, Khun Wasu. I have five questions if I got the list right. So please correct me if I missed something. So firstly, on the national roaming that we have from NT, this is an old contractual arrangement, Khun. So there is nothing new that has been entered in this quarter. Let me confirm that first. As per the said arrangement that we have with NT, True is charging them for the capacity that is being used on our 4G network.
And actually, pursuant to the said utilization, an amount of approximately THB 400 million or slightly less than THB 400 million has been recorded in Q2, which is about THB 200 million higher on a QoQ basis. The capacity that had been allocated to them was up to a certain limit. And beyond that limit, we have to start charging them since the thresholds were breached in Q1 of this year by a small amount.
So that's why it has come now. Whether this will continue in the future? Yes, of course. As long as NT continues to use our network on 4G, this revenue is going to continue. So that's how the arrangement is right now. Your next one on the subscriber trend is answered by Khun Sharad already. On the DNA, yeah. That's a good point.
There is a reduction of roughly about THB 500 million, if my memory serves me right, on the D&A. And like I emphasized, of course, we are modernizing our network, right? As we modernize the network, we record a significant amount of write-off. We recorded THB 7.1 billion last year. We've recorded about THB 4.2 billion in this quarter. And sorry, yeah, THB 4.3 billion in this quarter. So as we continue to record this write-off, we will obviously have savings in the D&A.
But please also keep in mind, so the baseline that you see is obviously going to be recurring in nature, except for the fact that CapEx in the H1, as you can see, is quite low. It's roughly about THB 10 billion. And we expect to catch up in the H2 by spending about THB 20 billion.
To the extent of the marginal increase that we may see because of the additional CapEx, that's the only thing that is going to affect. Otherwise, this is going to be the trend of the D&A that you're going to see because the D&A is a factor of the write-off that we do. So D&A goes down. And also, please keep in mind, as we modernize our network, we reduce the number of towers.
As we reduce the number of towers, the rental goes down, which is captured in the amortization as well. Then you asked about the loss on handset sales, which is so small. Let me give a little bit more nuanced answer to this. So there are two or three aspects here. One is, as we have mentioned in the past, we are focusing on quality acquisition.
At the same time, we are trying to optimize the level of subsidy that we give in the market as well. But also, what we have seen in the Q2 is we have got a benefit of volume discount from the device OEMs. That has been booked in the Q2. Now, if you compare our numbers versus our competitors, like I've mentioned in the past, there is an accounting difference between how we record the subsidy versus how our competitor records.
So this, per se, is not comparable. What I can say and confirm to you is that the subsidy levels per customer for each type of handset is pretty much the same in the market. So there is no comparative difference between the two operators on the subsidy. So long story short, we focus on quality. We try to optimize the subsidy.
There is also a one-time benefit that we've got on account of volume discounts, which are basically pertaining for this year only. What you're saying is the interest-bearing debt has dropped on a QoQ basis, which is roughly 4%. Please also note that the cash balance has actually reduced as well from THB 29 billion in Q1 to about THB 21 billion in Q2. The net reduction is roughly 2%.
As I had explained in the past, we have voluntarily prepaid the US dollar loan, which is also what your other question is, to what extent is the repayment? That's roughly about $750 million. That obviously has resulted in the reduction of net debt.
It's also a combination of the fact that we have positive free cash flow in the company, and the net debt overall is going down as well because of the strong operational performance that we have. Whether we will do this going forward? Yes, of course, we will look at all opportunities to reduce our interest expense. Like I said, because there is operational performance improvement, we have cut down on the CapEx spend that we were historically having in the past.
And as a consequence, with the THB 27 billion improvement in the net debt, whatever opportunities we get in the future to prepay our debts and reduce our interest costs, those will be exercised as we go forward, depending on the cash flow of the company.
If I just do a comparison with the capital markets today, we had given a guidance of about 4.5x in terms of leverage by end of 2025. Looks like we will reach this much sooner than what we had expected, Khun, because we're already at 4.7. I hope this answers the questions now, Khun Wasu, Khun.
Okay. There are a lot of questions in the chat box. We will not be able to answer all of them in the next 10 minutes. I'll just take one that is very common among all of you. The write-off amount is booked in the other income expense line item below EBITDA. If you look at our MD&A, it is in the other income expense line item. Khun Thitithep, you seem to have dropped off. Khun Jean, are you online? Yes. Okay.
Right. Okay. Thank you. I just have one question.
In the slide presentation that you showed earlier, there was THB 34.7 billion of other liability which is due in 2025. I would like to know what are those and how do you plan to fund the repayment? Is it by internal cash flow or by refinancing? Thank you. Just one question.
Khun Jean, I am not sure where you got the number 34.5.
Thank you. You said that next year, there was debt maturity of THB 76.2 billion.
Okay. Understand. Okay.
Yeah. Okay. I can answer that. Khun Jean, thank you for the question. And of course, good to see you as well. So the remaining debt maturity profile for this year is roughly about THB 44 billion, of which THB 37 billion is basically the debentures. And next year is about THB 111 billion, which includes THB 76 billion in terms of the debentures.
Actually, when we started this year now, we were looking at approximate THB 74 billion of debt to be refinanced. And today, that stands at about THB 44 billion. So there is already a reduction of THB 30 billion that's coming on account of better internal accruals of cash flow, about the funding that we have raised in the past, and most recently, that was done in Q2. We've also announced that we will issue debentures in August, around 27th to 29th, which will also help in further cash flows.
Sorry, further reduction in the debt or further refinancing of the debt. As I mentioned, we have voluntarily repaid approximately $750 million, which is THB 26 billion. And this was done using the JPY loan and also internal accruals of cash that we had. And this basically was supposed to be due in 2025.
So we have done a prepayment of the loan to handle our obligations in 2025, which has seen this much of reduction. Also, it helps us in reducing the interest cost as well, as you have already seen. Overall, because the company seems to be performing good, we've had an improvement in free cash flow also, and there is a reduction in overall debt of about THB 27 billion.
Having said that, the Thai Baht Bond is going to be the primary source of borrowing for us going forward, as we have maintained. What we've also done is we've looked at diversification of our debt. In the recently concluded board meeting, we've got an approval of a local borrowing from Bangkok Bank of roughly about THB 10 billion as well.
So we have multiple sources of funds, and we remain quite confident that we will be able to manage our refinancing needs for 2024 and 2025 as well, Khun.
We are unable to hear Khun Jean. Yes, Khun Jean, please repeat.
Oh, you can hear me now.
Yes, we can.
Sorry. Yeah. From your slide presentation, you have a total THB 100 billion due next year, right? THB 70 billion, it's the debenture. And the remaining THB 30 billion something, I suppose, is that accounts payable?
No. Borrowings. No.
I can answer.
Yeah.
On page 15.
Yes. Can we pass on to Khun Nakul?
Yeah. Yeah. So Khun Jean, this THB 34.7 billion is basically the other borrowings. This is not accounts payable. This is basically the debt. This is basically the bank borrowings.
Oh, okay. The bank borrowing. Okay. Sure. Thank you.
Thank you, Khun.
Before we move on to Piyush, there's a quick question from Ranjan. Is the Japanese yen debt hedged, Khun Nakul?
Yes. Fully hedged. Okay. Then I invite Piyush. I apologize. I'm rushing. We only have 5 minutes. Piyush, if you could please turn on your camera. Piyush, are you there?
[audio distortion] .
While we wait for Piyush, Khun Nakul, I have a question for you. This is on the dividends. Since the performance is improving and the leverage is coming down, this is from Jorgen. Can we provide some color on dividends?
Yeah. Let me answer that. Yeah. So for 2024, as you have seen, True is expected to be loss-making on a reported basis, but underlying is actually a decent amount of profit. We've already had roughly THB 3.2 billion in H1.
True has an ambition to turn profitable in 2025, upon which the dividend consideration is going to be made to the board and obviously subject to the availability of cash flows. A decision with that regard is going to be done. So yeah, we can look at it in 2025, Khun.
Thank you, Khun Nakul. Khun Manat, I have a question for you. Can we have a progress update on the organization modernization plans we have?
Okay. Thank you. We have so many things to do with the people. First, we have to reduce the redundancy , modernize our organization, reskill, upskill the people, change of the operating model such as managed service of the IT to make the telco tech journey with the TCS, and also have to study and make the proper layer of the team, also improve those layers and find the talent to fit in.
So that's our focus. And up to now, the focus is aligned with the plan. Thank you. Khun Manat, Piyush, if you're able to turn on your mic and your camera now.
Thanks a lot. And many congratulations for strong results. Just want to ask a little bit midterm question. I think it was earlier asked also, but on the EBITDA margin, you're already reaching the margin guidance which you had given for 2025 in the CMD. And 2027 also seems modest in light of what you have achieved in the last six quarters.
So just wanted to pick your brains on how much more can we expect on the margins for 2025 or 2027, if you can throw any color, because it seems there are few items which have progressed much faster and maybe few cost items which you were able to leverage on or reduce much more than what you had initially expected.
Thank you, Piyush. Khun Nakul, would you like to take that one?
Yeah. Well, thank you for your question, Piyush. Yes, we are almost sitting at 58.6%, which is kind of the margin number that we had indicated for 2025. I mean, as we continue to go forward, our ambition has always been to show a QoQ improvement. That's why we emphasize there is a sixth consecutive quarter of improvement in our EBITDA.
In terms of margin, we haven't done that calculation yet, but we do maintain that on a QoQ basis, we'll continue to improve. And if you look at the guidance that we've given for the year, which is 12% to 14% growth in EBITDA and 4% to 5% growth in revenue, which also factors in the revenue that we get from NT as well on the domestic roaming, I think this will still see an improvement trend as we go forward, but not in the same magnitude of what we've seen in the past.
We will look at the midterm ambition, and we'll come back in terms of explaining what that can be in the future. But let's look at what we have done so far. It seems to be better than what we had planned, and that's why we are ahead of time.
Also, I would say that, like we have always explained, right, we've done a thorough benchmarking with our competitor. We know the specific line items in the P&L where there is a difference between us and them, and we have an ambition to see how we can bridge that gap in the future. This forms a very important part of our strategy process and how we plan the next couple of years. Our ambitio n is to reach those levels to try to see how we can bridge the gap going forward.
Thank you, Khun Nakul. Unfortunately, that is the end of our hour. There are a lot of questions pending. I will get back in touch with you on each of these. I'm so sorry we have run out of time today. Thank you so much.
We look forward to seeing you next quarter, and I hope you have a great weekend.