Dialog Delivers Net Profit of Rs1.3Bn in First Quarter

Dialog Axiata PLC announced, Friday 09th May2014, its consolidated financial results for the three months ended 31st March 2014. 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 strong growth momentum across Mobile, Digital Pay Television, Tele-infrastructure and Fixed Line businesses to record a consolidated revenue of Rs16.3Bn for the 1st Quarter of 2014. Group revenues were stable on a Quarter on Quarter ("QoQ") basis and demonstrated growth of 7% relative to Q1 2013.

Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) was recorded at Rs4.7Bn in Q1 2014, an improvement of 1% QoQ. Group EBITDA however declined by 6% YoY, impacted by the recognition of a TDC (Telecommunications Development Charge) refund of Rs429Mn during the corresponding period in 2013. Group EBITDA margin was registered at 29% for Q1 2014.

Group NPAT (Net profit After Tax) for Q1 2014 was recorded at Rs1.3Bn, an increase of 14% QoQ. However on a YoY basis, Group NPAT contracted by 20% on the back of increased depreciation in line with investments totalling to Rs7.1Bn in Spectrum and License Assets and Infrastructure related investment in coverage and capacity expansion of the Group's Mobile and Fixed telecommunication networks. Overall, the Group recorded an incremental depreciation and amortisation impact of Rs176Mn in Q1 2014 compared to the corresponding period in 2013.

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 (86%) and of Group EBITDA (89%). In Q1 2014, Company revenue remained stable on a QoQ basis to be recorded at Rs14.2Bn, representing an increase of 6% YoY. The Company’s mobile customer base stands at 9.3 Million mobile subscribers at end Q1 2014. Company EBITDA grew by 2% QoQ to be recorded at Rs4.2Bn for the quarter. Company EBITDA declined by 5% on a YoY comparison due in the main to the recognition of TDC refund of Rs404Mn in the previous year. Company NPAT for the quarter was recorded at Rs1.5Bn.

Dialog Television (DTV), the Digital Pay Television business of the Dialog Group continued its positive growth momentum recording a revenue growth of 27% YoY to reach Rs1.1Bn for Q1 2014. DTV EBITDA was recorded at Rs260Mn for Q1 2014, an improvement of 118% YoY underpinned by strong revenue growth. Downstream of strong EBITDA performance, Net Profit for the period was recorded at Rs132Mn. compared to a Net Loss of Rs14Mn in the corresponding period of 2013.

Dialog Broadband Networks (DBN) featuring the Group's Fixed Telecommunications and Broadband Business recorded stable revenue of Rs1.5Bn for Q1 2014. Following the expiration of VAT credits recognised during the previous year, DBN EBITDA contracted 39% on a YoY basis to reach Rs248Mn. DBN’s Net Loss for Q1 2014 was recorded at Rs311Mn relative to the Net Loss of Rs62Mn in the corresponding period of 2013. Negative movement in NPAT performance was underpinned by the decline in EBITDA in combine with the increase in depreciation related to Fixed 4G LTE related investments.

Group capital expenditure for Q1 2014 amounted to Rs3.2Bn and was focused on coverage and capacity expansion alongside the extension of the Group’s Optical Fibre Network. Group Free Cash Flow (FCF) was recorded at Rs1.5Bn for Q1 2014 on the back of lower Capex spend during the quarter. The Dialog Group continued to maintain a structurally robust balance sheet with the Net Debt to EBITDA ratio at Group level being maintained at 1.39x as at end of Q1 2014