Tuesday 15 May 2018

Dialog consolidates performance with strong 1st quarter results

Dialog Axiata PLC announced, May 11 , its consolidated financial results for the three months ended March 31. 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.
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