Sunday 19 February 2017

Sri Lanka's Dialog Axiata December net doubles to Rs1.25bn

ECONOMYNEXT - Sri Lankan celco Dialog Axiata said December 2016 quarter net profit rose 102% to Rs1.25 billion from a year ago but was much lower than the previous quarter after a tax hike slowed sales and earnings growth.

Group sales in the quarter grew 13.7% to Rs22.8 billion, according to interim accounts filed with the stock exchange.

Dialog Axiata's net profit in the September 2016 quarter was Rs2.8 billion.

Earnings per share for the quarter were 15 cents. The share was last traded at Rs10.60.

EPS for the financial year ending 31 December 2016 were Rs1.11 with net profit up 74% to Rs9 billion and sales up 17% to Rs87 billion.

The accounts showed continued losses in the Dialog Axiata group’s television and broadband businesses.

A statement accompanying the accounts said Dialog Television (DTV) continued its “positive growth momentum, recording a revenue growth of 5% YoY and QoQ to reach Rs6.1 billion for FY 2016 and Rs1.5Bn for Q4 2016.

“Notwithstanding revenue growth, EBITDA (earnings before interest, taxes, depreciation, and amortization) contracted by 37% YoY to Rs383 million, due to direct cost expansion accruing from product enhancements featuring the expansion of channel genres.

“ . . . on a QoQ basis, EBITDA contracted 24%. The decline in EBITDA translated to an equivalent negative impact on NPAT leading to a net loss of Rs644 million for FY 2016 and a net loss of Rs298 million for Q4 2016,” the statement said.

Dialog Broadband Networks (DBN) sales grew 28% to Rs9.3 billion for FY 2016 and 7% to Rs2.6 billion in Q4 2016.

“Downstream of strong revenue performance, DBN EBITDA for FY 2016 was recorded at Rs4.0 billion and Rs1.2 billion in Q4 2016, representing an increase of 39% YoY and 25% QoQ respectively,” the statement said.

“DBN's net loss for FY 2016 increased to Rs385 million relative to the net loss of Rs133 million recorded in FY 2015 underpinned by the higher depreciation and finance cost.”

The statement said the 4th Quarter featured the re-introduction of Value Added Tax (VAT) effective 1st November 2016, which moderated revenue growth to 5% Quarter-on-Quarter to reach Rs22.8 billion.

"On a QoQ basis EBITDA declined 4% to post at Rs7.4 billion."

Dialog Axiata said group net profit declined 56% QoQ to be Rs1.3 billion for Q4 2016 due to lower EBITDA combined with increased depreciation and higher non-cash translational forex losses.

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