Dialog Posts Strong 3rd Quarter

Dialog Axiata PLC announced, Thursday 10th November 2016, its consolidated financial results for the nine months ended 30th September 2016. 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"), Dialog Television (Pvt) Ltd ("DTV") and Digital Holdings Lanka (Pvt) Ltd ("DHL").

The Group continued its strong growth momentum across Mobile, Digital Pay Television, Tele-infrastructure and Fixed Line businesses to record a consolidated Revenue of Rs21.7Bn for Q3 2016 and Rs64.0Bn for the nine months ended 30th September 2016, demonstrating a robust growth of 3% Quarter on Quarter ("QoQ") and 19% Year to Date ("YTD") respectively. On the backdrop of strong Revenue growth, Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) grew by 9% QoQ to be recorded at Rs7.7Bn for Q3 2016. Group EBITDA for the first nine months of 2016 was recorded at Rs21.8Bn, a significant increase of 20% relative to the corresponding period in 2015 translating to an EBITDA margin of 34.1%.

Downstream of EBITDA performance, Group NPAT (Net Profit After Tax) grew 24% QoQ to be recorded at Rs2.8Bn. NPAT for the first nine months of 2016 demonstrated a significant YTD growth of 71% to be recorded at Rs7.8Bn. The Sri Lankan Rupee depreciated at a moderate 1.7% YTD resulting in a non-cash translational foreign exchange loss of Rs0.2Bn compared to Rs1.7Bn during the corresponding period in 2015.

The Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs23.7Bn to the Government of Sri Lanka (GoSL) during the nine months ended 30th September 2016. 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 Rs8.6Bn inclusive of income tax. The Group additionally collected consumption taxes and levies, totalling to Rs15.1Bn on behalf of the GoSL for the first nine month of 2016, comprising in the main of Telecom Levy collections amounting to Rs10.0Bn.

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 (87%). Company Revenue for the nine months ended 30th September 2016 was recorded at Rs53.9Bn, up 17% compared to the corresponding period in 2015. Revenue for the 3rd Quarter grew by 4% QoQ to be recorded at Rs18.3Bn. Company EBITDA for the quarter increased by 13% QoQ to reach Rs6.7Bn on the backdrop of Revenue growth. On an YTD basis, Company EBITDA for the first nine months of 2016 grew by 21% to be recorded at Rs18.8Bn, translating to an EBITDA margin of 34.9%. Company NPAT was recorded at Rs3.0Bn for Q3 2016 and Rs8.4Bn for the first nine months of 2016 respectively, representing an increase of 31% QoQ and an increase of 74% YTD.

Dialog Television (DTV), the Digital Pay Television business of the Group continued its positive growth momentum, recording a Revenue growth of 7% YTD to reach Rs4.6Bn for the nine months ended 30th September 2016. Cost expansion arising from aggressive customer acquisition alongside service and product expansion activities, resulted in a medium term contraction of DTV EBITDA by 47% on an YTD basis to be recorded at Rs310Mn. The contraction of DTV EBITDA translated to an equivalent negative impact on NPAT leading to a Net Loss of Rs346Mn for the first nine months of 2016 compared to a Net Loss of Rs130Mn in the corresponding period of 2015.

Dialog Broadband Networks (DBN) featuring the Group's Fixed Telecommunications and Broadband Business recorded Revenue of Rs6.8Bn for the nine months ended 30th September 2016, representing an increase of 27% YTD. Downstream of robust Revenue performance, DBN EBITDA for the first nine months of 2016 was recorded at Rs2.8Bn, representing an increase of 34% YTD. DBN's Net Loss for the first nine months was recorded at Rs62Mn relative to the Net Loss of Rs53Mn in the corresponding period of 2015. Negative movement in NPAT was underpinned by the increase in depreciation charges accruing from aggressive expansion of Fixed 4G LTE and fibre infrastructure.

Group capital expenditure for the nine months ended 30th September 2016 totalled to Rs12.7Bn. Capital expenditure was directed in the main towards investments in High-Speed Broadband infrastructure directed at further strengthening the Group's leadership in Sri Lanka's Broadband sector. Group Operating Free Cash Flow (OFCF) was recorded at Rs4.9Bn for the first nine months of 2016, underpinned by 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 0.92x as at the end of September 2016.