Dialog Records Strong Year-to-date Performance

• YTD Revenue Growth +8%, EBITDA and PAT Out Pace Revenue at +10% and +13% respectively
• Direct and Indirect Contribution in Taxes, Fees and Levies to GoSL: Rs25.5Bn
• Continuing Capex Investments in High Speed Broadband and Other Infrastructure: Rs13.9Bn
• Operating Free Cash Flow Tops Rs16.6Bn YTD; Cash Balance Improved Rs3.1Bn from Year End

Dialog Axiata PLC announced its consolidated financial results for the nine months ended 30th September 2019. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group continued its growth momentum across Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses to record a consolidated revenue of Rs87.2Bn for the nine months ended 30th September 2019, demonstrating strong growth of 8% Year-to-Date (“YTD”). Downstream of Revenue performance Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew 10% YTD to reach Rs35.0Bn. The adoption of SLFRS 16, ‘Leases’ with effect from 1 January 2019, translated to an EBITDA upliftment of Rs2.0Bn which is a 2.3pp increase in the EBITDA Margin reaching to 40.2% for nine months ended 30th September 2019.

Group Revenue remained flat on a Quarter-on-Quarter (“QoQ”) basis to reach Rs29.1Bn for Q3 2019 mainly due to intense competition and gradual recovery in core revenues following Easter Sunday incident. Group EBITDA grew 8% QoQ to reach Rs11.9Bn for Q3 2019 driven by continued focus in cost efficiencies. On a YoY basis Revenue and EBITDA grew 4% and 7% respectively.

The Group Net Profit After Tax (“NPAT”) demonstrated a growth of 13% YTD to record at Rs8.3Bn for the nine months ended 30th September 2019 underpinned by strong EBITDA performance. On a QoQ and YoY basis NPAT declined 26% and 14% respectively to record Rs1.5Bn for Q3 2019 mainly due to non-cash translational forex losses resulting from 3.0% depreciation of the Sri Lankan Rupee (“LKR”) against the United States Dollar (“USD”) for the quarter. Normalised for the said non-cash translational forex losses NPAT was up 19% QoQ albeit declining 29% YoY.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs25.5Bn to the Government of Sri Lanka (“GoSL”) during the nine months ended 30th September 2019. Total Public remittances included Direct Taxes and Levies amounting to Rs7.9Bn and Rs17.6Bn in Consumption Taxes collected on behalf of the GoSL.

Group capital investment for the first nine months of 2019 was recorded at Rs13.9Bn representing a capex to revenue ratio of 16%. Capital investment was directed towards revenue generating capacity enhancements in High-Speed Broadband infrastructure to further strengthen the Group’s position in Sri Lanka’s Broadband sector. Group Operating Free Cash Flow (“OFCF”) was recorded at Rs16.6Bn for the first nine months of 2019 up from Rs8.1Bn recorded for the corresponding period in 2018. Consequently, cash balance improved by Rs3.1Bn as compared to year end 2018. Dialog Group continued to exhibit a low geared balance sheet as the Net Debt to EBITDA ratio remained healthy at 0.79 times as at end of September 2019.

Further strengthening the offering in the enterprise space, Dialog launched FlexNet during the quarter, a Software Defined Networking (SDN) platform for Sri Lanka’s enterprises. FlexNet provides a cloud-ready platform for businesses to manage their connectivity and networks. The grow-as-you-go business model provides flexibility to businesses to continuously monitor, manage and optimise their networks to ensure the best performance for investment.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (71%) and Group EBITDA (76%). Company revenue declined 2% YTD to record at Rs62.1Bn for nine months ended September 2019 mainly due to the 70% YTD contraction in international wholesale revenue. Due to the externalities alluded to earlier the revenue declined 2% QoQ and 3% YoY to record at Rs20.5Bn for Q3 2019. Company EBITDA was recorded at Rs26.7Bn for the first nine months of 2019 representing an increase of 9% YTD. EBITDA was recorded at Rs9.1Bn for Q3 2019 up 9% QoQ and 4% YoY. The adoption of SLFRS 16 had a positive impact on the first nine months EBITDA performance of the Company resulting in an upliftment of Rs1.9Bn for nine months ended 30th September 2019. Downstream of EBITDA performance the Company NPAT was recorded at Rs8.7Bn for first nine months of 2019 up 25% YTD. NPAT reached Rs1.8Bn for Q3 2019 declining 11% QoQ albeit growing 4% YoY. Dialog Television (“DTV”), continued its leadership position in the Digital Pay Television space with a subscriber growth of 25% YoY by end Q3 2019. Underpinned by strong subscriber growth, DTV Revenue Public grew by 17% YTD to Rs6.5Bn for the nine months ended 30th September 2019 while revenue was recorded at Rs2.3Bn for Q3 2019 up 3% QoQ and 15% YoY. On the back of strong cost management focus, DTV EBITDA recorded a growth of 17% YTD to reach Rs1.8Bn for the first nine months of 2019. Accordingly, DTV Net Loss declined to Rs335Mn for the nine months ended 30th September 2019 relative to a Net Loss of Rs394Mn for the corresponding period in 2018.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs20.6Bn for the nine months ended 30th September 2019 up 76% YTD due to the transfer of wholesale business while on a QoQ and YoY basis revenue grew 9% and 60% respectively to reach Rs7.2Bn for Q3 2019. DBN EBITDA recorded a growth of 9% YTD to reach Rs6.9Bn for the nine months ended 30th September 2019 albeit NPAT declining to Rs579Mn from Rs1.3Bn recorded for the corresponding period in 2018.

More details are available at the following links:
Dialog Axiata PLC direct weblink: https://www.dialog.lk/quarterly-reports
CSE direct weblink: https://www.cse.lk/home/company-info/DIAL.N0000/financial