Dear Teo Boon Choi, you wrote:
1. What are the reasons that cause the delay of announcement of year-end results of the company and why is not being audited?
Our FY04 results were announced on 28 Feb 2005, within the time frame required by the SGX listing rules (within 60 days of our FY04 year end on 31 Dec 2004).
The audited accounts are not ready on the date of announcement. However, we do not expect material difference between our audited accounts and our FY04 results announcement.
2. The company declared an interim dividend of 2.5 cents and not year-end dividend. Is this going to be a consistent issue for next year?
We are committed to enhancing shareholders’ value through annual dividend payout. Going forward, we expect to declare and pay annual dividends of up to 25-30% of the annual net profit after tax. However, the declaration and payment of any dividends, the timing and the amount of dividends is subjected to the discretion of the Directors. Any future determination by the Directors to pay dividends will be based upon our earnings, cash flow, financial condition, capital requirements and other conditions the directors deem relevant.
3. Will the company consider placing an advertisement on the main papers for the next fiscal year's results?
We currently do not place newspapers advertisements on our financial results announcement. Investors can access SGXnet (www.sgx.com), our corporate website (www.telechoice.com.sg) as well as our investor relations portal (www.shareinvestor.com) for information on our results announcements as well as other corporate announcements.
Dear Yap Wai Meng, you wrote:
1) Can you further elaborate on the new value-added services TeleChoice is planning to have in your telecommunications services? Will this tie-in with the launch of 3G networks for the various telcos companies in Singapore as well as within the region?
We intend to augment our telecommunications services segment with new product offerings such as value-added services to the current iDD1521 service. We are also keen to expand into the regional markets such as Malaysia and Thailand through acquisition and joint ventures.
The launch of 3G networks presents interesting opportunities for us. Our proven expertise and track record in mobile network and engineering services puts us in an excellent position to take advantage of regional 3G mobile infrastructure opportunities. As telecommunications operators around the region beef up their 3G networks, we expect to benefit from this trend.
2) Are there plans to acquire distribution services of other companies to enlarge the distribution segment of TeleChoice?
Where suitable opportunities arise, we plan to leverage on mergers and acquisitions for growth. We will also continue to grow organically, by replicating our proven business model in new regional markets.
3) Is there any reason why the contribution from distribution services in Australia is expected to be lower in volume? What is the proportion of Australia's distribution services compared to the overall business volume of distribution services?
This is due to changing business conditions. Australia, being a mature market, has high mobile telephony penetration rates and the contribution from distribution services is generally lower in volume compared to high growth regions such as Indonesia, Malaysia and Thailand. Australia registered a growth rate of 159% and contributed 11% of our total revenue in FY04. However, the financial performance of the Australian distribution operations is not expected to materially affect the Group’s performance in FY2005.
Dear Jason Ling, you wrote:
1) Congrats on the outstanding results again! Has the distribution in Thailand taken an ideal course yet? When will we see substantial contribution from this market? Any updates on this progress will be good.
Thanks for the compliment. We believe we have consistently performed well, and will continue to sharpen our competitive edge and maintain leading market positions in all our business areas.
As with penetrating other new markets, we need to take calculated risks and invest for future growth. In the past, we have successfully done so for our other overseas markets such as Indonesia and Malaysia.
We have commenced our distribution operations in Thailand in February 2005. We are striving to increase sales volume, product models range, and distribution coverage and hope to see good business growth over the near to medium term.
2)With 3G kicking in harder this year, what comments do you have on Spore's distribution business in view of our appetite for new phones/models?
More consumers may be expected to purchase 3G handsets over the near to medium term, as 3G takes off in Singapore and around the region. A surge in demand for 3G handsets should be beneficial for the mobile handset distribution market in general.
3) What are the chances for TeleChoice to deal with the 3G network for overseas markets? Will it be higher costs if conducted for overseas markets, while quality services held constant?
Given our track record in mobile network and engineering services, we believe we are well-positioned to compete for regional 3G roll-out opportunities.
While we seek to maximise margin opportunities wherever possible, we will continue to satisfy the needs of our customers through consistent and high quality deliverables, by maintaining and deploying our proven project management expertise and resources.
4) Your statement shows that profits for telecoms services or IDD had improved while revenue remains constant. Does that indicate that you are leaving this as a cash cow business? If not, what plans do you have to compete with the other telcos on IDD business?
The telecommunications services business is an important part of our business and we expect to maintain our telecommunications services performance in FY2005. To stay ahead of the competition, we will continue to focus on innovative and competitive service offerings that meet our customers’ needs.
5) How can TeleChoice differentiate itself from the other telcos' offerings? Can your rates be better than them?
For Telecommunications Services
We offer best of breed, quality services at highly competitive prices. We believe our services and rates offered rank amongst the most competitive in the market.
As a Group
Our competitors include both local and international communications products and services providers, covering different segments of the telecommunications industry. We are not aware of any similar competitor, in the markets we operate in, that provide the same range of products and services as we do.
We are a leading regional provider of telecommunications equipment and solutions. We have demonstrated our ability to tap growth opportunities in South Asia Pacific mobile telecommunications markets with diversified products and markets. In addition, we have an experienced management team with strong execution track record and have achieved consistent profitability.
Dear Kreagon, you wrote:
1) Hi, what is the management view for the rise of 3G in Singapore? In your views, when do you expect a substantial market in appreciating 3G?
How and when 3G’s market potential may be fully realised depends on the rate the market adopts the technology & supporting applications, and the viability of the business models tapping on 3G. We seem to be in the earlier stages of the product and market cycle, which could last a few years.
The launch of 3G networks presents interesting opportunities for us. Our proven expertise and track record in mobile network and engineering services puts us in an excellent position to take advantage of regional 3G mobile infrastructure opportunities. As telecommunications operators around the region beef up their 3G networks, we expect to benefit from this trend.
More consumers may be expected to purchase 3G handsets over the near to medium term, as 3G takes off in Singapore and around the region. A surge in demand for 3G handsets should be beneficial for the mobile handset distribution market in general.
2)How sustainable is your growth or presence in the segment of distribution and mobile network engineering services? Can you describe the core / distinctive competencies you are building to stay strong in these areas?
We are positive of the growth opportunities in all our three business segments and we expect to maintain our operating performance for FY2005.
While we believe we occupy leading market positions in our various businesses, our continued success depends on our ability to continually sharpen our competitive edge to stay ahead of the competition, and to exploit new business opportunities.
3)How would you view barriers to entry to the distribution business in Spore and Indonesia? What will be your growth drivers for 2005 and 2006?
The business is highly competitive and requires sound management, financial resources and good relationships with business partners and customers. For the info-communications sector in general, there appears to be good growth prospects in the regional consumer markets, spurred on by innovative product and service offerings.
4) Looking at your margins, it has dropped from 10.7% to 7.9%. A huge drop. With your revenue bulk from distribution, is this drop expected to keep middle man activities competitive?
While we expect Distribution Services to continue to face margin pressures, we seek to continually sharpen our competitive edge through higher value added, innovative products and services. Revenue growth potential for Distribution Services remains good, in view of the large populations of the markets we operate in such as Thailand, Malaysia and Indonesia which have relatively lower mobile telephony penetration rates.
Dear Ang Yee, Gary, you wrote:
1) Who are your competitors? How are your results compared to theirs?
It may be difficult to draw any direct comparison, as our businesses span different areas of the telecommunications sector, ranging from Distribution Services, Mobile Network and Engineering Services and Telecommunications Services. We compete with players in all of these segments. Our competitors include both local and international communications products and services providers, covering different segments of the telecommunications industry. We are not aware of any similar competitor, in the markets we operate in, that provides the same range of products and services as we do.
We believe we have consistently performed well, and will continue to sharpen our competitive edge and maintain leading market positions in all our business areas. We will continue to leverage on the strength of our business model and the growth strategies for our three business segments in growing our business going forward.
Dear Joe Chen, you wrote:
Hi, I am an investor of TeleChoice and would like to ask the management a couple of questions. Would appreciate your kind reply:
1)From your recent financial statement, the group expects its distribution business in Australia to record lower biz volume in FY2005. May I know why?
This is due to changing business conditions. Australia, being a mature market, has high mobile telephony penetration rates and the contribution from distribution services is generally lower in volume compared to high growth regions such as Indonesia, Malaysia and Thailand. Australia registered a growth rate of 159% and contributed 11% of our total revenue in FY2004. However, the financial performance of the Australian distribution operations is not expected to materially affect the Group’s performance in FY2005.
2)The company has in fact ventured into different countries and did pretty well. Has the company ever considered PRC as the next market to venture into?
Thanks for the compliment. We are always on the look-out for suitable and good market opportunities, including the PRC market.
3)Can this year 2005 result surpass last year 2004? What could be the main hindrance?
Barring unforeseen circumstances, the business outlook for our Group is expected to remain positive with growth opportunities in all our three business segments. We expect to maintain our performance in FY2005. How well we perform also depends on overall market conditions and trends, and how quickly we are able to seize opportunities and move ahead of the competition.
Dear Ling, you wrote:
1) Referring to the latest unaudited full year financial statement, which financial period is the interim dividend of 2.5 cents per share for? (4Q2004 and FY2004) Is it from 1/1/2004 to 30/6/2004 (interim for 2nd 6 months of the financial period)? Or is it from 01/10/2004 till 31/12/2004 (Q4 of the financial period)?
The Interim Dividend (paid in December 2004) was declared for FY04.
Dear y s boey, you wrote:
1) Please advise if the inventory stocks of paging equipment has been written off. If not, can you please tell us how much of the pagers & related pager equipment is still in the books.
The amount of pagers in our inventory is immaterial and the pagers are carried at net realisable value in our accounts. The paging network has been fully depreciated.
Dear Investors,
Thank you for all your questions and your interest in TeleChoice International Limited. We have come to the end of this Q&A session.
We have enjoyed the session and have learnt much from your questions. We hope that through this Q&A, you have gained better insights to our Company and our operations.
Rgds,
The Management Team
TeleChoice International Limited
