Dialog Consolidates Performance with Strong 1st Quarter Results

11 May 2018         Colombo


Dialog Axiata PLC announced, Friday 11th May 2018, its consolidated financial results for the three months ended 31st March 2018. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

Dialog Group continued its growth momentum across all key business segments including Mobile, Tele- infrastructure, Digital Pay Television and Fixed Line to record a consolidated revenue of Rs. 26.1Bn for Q1 2018, demonstrating a growth of 5% Quarter-on-Quarter (“QoQ”) and 18% Year-on-Year (“YoY”). Underpinned by strong revenue growth coupled with disciplined cost management and operational efficiencies, Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 9% QoQ and 38% YoY to record at Rs. 9.9Bn for Q1 2018.

Dialog Group adopted SLFRS 15, ‘Revenue from Contracts with Customers’, with effect from 1 January 2018. The adoption of the standard resulted in an EBITDA upliftment of Rs. 422Mn for Q1 2018 which is a 1.6pp increase in the EBITDA margin. The impact on revenue and Net Profit were not material. Normalised for the positive impact from SLFRS 15, the EBITDA margin was recorded at 36.6% for Q1 2018.

The Group Net Profit After Tax (NPAT) declined 10% QoQ on the back of non-cash translational forex loss of Rs. 369Mn for Q1 2018 compared to a gain of Rs. 68Mn recorded for Q4 2017, as the Sri Lankan Rupee (LKR) depreciated against the United States Dollar (USD) by 1.5% in Q1 2018. NPAT grew 84% YoY to be recorded at Rs. 2.8Bn for Q1 2018.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 9.2Bn to the Government of Sri Lanka (GoSL) during the first three months of 2018. Total remittances included Direct Taxes and Levies amounting to Rs. 2.9Bn as well as Rs. 6.3Bn in Consumption Taxes collected on behalf of the GoSL.

The Group capital expenditure for Q1 2018 totalled to Rs. 2.4Bn (USD 15.4Mn). Capital expenditure was directed in the main towards investments in High-Speed Broadband infrastructure to further strengthen the Group's leadership in Sri Lanka's Broadband sector. Group Operating Free Cash Flow (OFCF) was recorded at Rs. 5.5Bn for Q1 2018. The Group continued to exhibit a structurally strong balance sheet with the Net Debt to EBITDA ratio being maintained at 0.77x as at end of March 2018.

At an entity level, Dialog Axiata PLC (“the Company”) continued to contribute a major share of Group Revenue (79%) and Group EBITDA (77%). The Company further consolidated its market leading position in the Sri Lankan mobile space to surpass 13Mn subscribers during the quarter. Company Revenue for Q1 2018 grew by 2% QoQ and 13% YoY to reach Rs. 20.6Bn. Underpinned by strong revenue growth and cost initiatives, Company EBITDA for Q1 2018 was recorded at Rs. 7.7Bn, an increase of 3% QoQ and 33% YoY. As mentioned, the adoption of SLFRS 15 had a positive impact on the Q1 performance of the Company resulting in an EBITDA upliftment of Rs. 222Mn. Company NPAT was recorded at Rs. 2.5Bn for Q1 2018 declining 20% QoQ due to increase in depreciation and non-cash translational forex loss albeit growing 43% YoY driven by strong EBITDA performance relative to Q1 2017.

Dialog Television (DTV), the leader in Sri Lanka’s Digital Pay Television space, achieved yet another milestone during the quarter as it reached 1 million households in the country. Post normalisation for SLFRS 15 impact, DTV Revenue grew by 9% YoY and QoQ to reach Rs. 1.6Bn for Q1 2018 driven by aggressive subscriber acquisition. Leveraging its broader subscriber base, DTV introduced Sri Lanka’s first online media buying platform,, enabling small/medium entrepreneurs and corporates to advertise on Dialog Television. Normalised DTV EBITDA grew 217% YoY to reach Rs. 205Mn for Q1 2018 as a result of strong revenue growth. Accordingly, DTV Net Loss declined to Rs. 118Mn in Q1 2018 relative to a Net Loss of Rs. 311Mn for the corresponding period in 2017.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs. 3.7Bn for Q1 2018, representing an increase of 26% YoY and 12% QoQ. Strong top line growth was supported by the Fixed Home Broadband segment driven by subscriber growth and expanding network coverage. On the back of strong revenue performance, DBN EBITDA grew 46% YoY to record Rs. 2.2Bn in Q1 2018. Downstream of healthy EBITDA performance, DBN NPAT was recorded at Rs. 605Mn for Q1 2018 increasing by 155% YoY.

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