Dialog Consolidates NPAT at Rs3.9Bn for 1H 2015

Dialog Axiata PLC announced, Friday 7th August 2015, its consolidated financial results for the six months ended 30th June 2015. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post-consolidation with subsidiaries Dialog Broadband Networks (Pvt) Ltd (“DBN”), and Dialog Television (Pvt) Ltd (“DTV”).

The Group continued its growth momentum across Mobile, Digital Pay Television, Tele-Infrastructure and Fixed Line businesses to record a consolidated revenue of Rs35.1Bn for 1H 2015 demonstrating a growth of 6% Year to Date (“YTD”). Group Revenue grew 2% Quarter on Quarter (“QoQ”) to be recorded at Rs17.7Bn for Q2 2015. The 2nd Quarter of 2015 featured the impact of the industry wide introduction of a 25% Bonus on Mobile Prepaid Domestic Calls with effect from 7th April 2015.

Robust revenue growth combined with operational efficiencies derived through cost management initiatives resulted in Group EBITDA for 1H 2015 growing by 20% YTD to reach Rs11.9Bn. The Group EBITDA margin for 1H 2015 was accordingly recorded at 33.9%. On a QoQ basis however, Group EBITDA declined by 1% QoQ to be recorded at Rs5.9Bn. Downstream of EBIDTA, Group NPAT (Net Profit After Tax) was recorded at Rs3.9Bn (up 33% YTD) and Rs1.9Bn (down 4% QoQ) for 1H 2015 and Q2 2015 respectively.

The Dialog Group remitted a total of Rs12.0Bn to the Government of Sri Lanka (GoSL) during 1H 2015. Total remittances included direct taxes and levies as well as consumption taxes collected on behalf of the GoSL. Direct taxes, fees and levies contributed by the Dialog Group totalled to Rs4.9Bn inclusive of income tax. The Group additionally collected consumption taxes, totalling to Rs7.1Bn on behalf of the GoSL in 1H 2015, comprising in the main of Telecom Levy collections amounting to Rs5.6Bn.

At an entity level, Dialog Axiata PLC (“the Company”) featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group Revenue (84%) and Group EBITDA (84%).The Company further consolidated its market leading position within Sri Lanka’s mobile market to surpass the 10Mn subscriber milestone during the 2nd quarter. Company Revenue grew by 3% QoQ to reach Rs15.2Bn, with revenue for 1H 2015 being recorded at Rs29.8Bn, up 5% compared to 1H 2014. As alluded to earlier in the context of Group Performance, the Mobile Business was impacted by the industry-wide introduction of a 25% Bonus on Mobile Prepaid Domestic Calls since April 07 2015. Company EBITDA for the Quarter decreased by 3% QoQ to reach Rs4.9Bn. On a YTD basis however, strong revenue growth and positive outcomes from cost management initiatives resulted in Company EBITDA for 1H 2015 growing 12% YTD to be recorded at Rs10.0Bn, translating to an EBITDA margin of 33.4%. In line with performance dynamics at EBITDA level, Company NPAT was recorded at Rs1.8Bn (down 6% QoQ) for Q2 2015 and Rs3.8Bn (up 9% YTD) for 1H 2015 respectively.

Dialog Television (DTV), the Digital Pay Television business of the Group recorded a revenue growth of 25% YTD to reach Rs2.8Bn for 1H 2015. Notwithstanding robust revenue growth, EBITDA (recorded at Rs516Mn for 1H 2015) was constrained in growth to 2% YTD, due to direct cost expansion accruing from product enhancements featuring the expansion of channel genres. DTV NPAT for 1H 2015 recorded at Rs114Mn, a decrease of 49% compared to the corresponding period in 2014. DTV’s Pay TV subscriber base grew by 37% YoY to be recorded at 534,000 as at the end of June 2015.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs3.5Bn for 1H 2015, representing an increase of 19% YTD. DBN EBITDA was recorded at Rs1.4Bn for the same period, an improvement of 177% YTD driven by strong revenue growth and operating cost improvements. Downstream of healthy EBITDA performance, Net Profit for 1H 2015 was recorded at Rs48Mn, compared to a Net Loss of Rs655Mn posted in 1H 2014.

Group capital expenditure for Q2 2015 amounted to Rs3.6Bn. Capital expenditure was directed in the main towards investments in high speed broadband infrastructure to support the Group’s strategy to consolidate and grow its leadership in the Broadband space. Group Free Cash Flow (FCF) was recorded at Rs1.8Bn for Q2 2015 on the back of strong EBITDA performance and calibrated capital expenditure. The Group continued to exhibit a structurally robust balance sheet with the Net Debt to EBITDA ratio being maintained at 0.71x as at end of June 2015.