Dialog consolidates performance with strong 1Q results | Sunday Observer

Dialog consolidates performance with strong 1Q results

Dialog Axiata PLC announced on Friday its consolidated financial results for the three months ended March 31, 2018. Financial results included those of Dialog Axiata PLC and of the Dialog Axiata Group.

Dialog Group recorded a consolidated revenue of Rs. 26.1 bn for Q1 2018, demonstrating a growth of 5% Quarter-on-Quarter (QoQ) and 18% Year-on-Year (YoY).

Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 9% QoQ and 38% YoY to record at Rs. 9.9 bn for Q1 2018.

Dialog Group adopted SLFRS 15, ‘Revenue from Contracts with Customers’, with effect from January 1, 2018. The adoption of the standard resulted in an EBITDA upliftment of Rs. 422 mn for Q1 2018 which is a 1.6pp increase in the EBITDA margin.

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. 369 mn for Q1 2018 compared to a gain of Rs. 68 mn recorded for Q4 2017, as the Sri Lankan Rupee depreciated against the United States Dollar (USD) by 1.5% in Q1 2018. NPAT grew 84% YoY to be recorded at Rs. 2.8 bn for Q1 2018.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 9.2 bn to the Government of Sri Lanka (GoSL) during the first three months of 2018.

The Group capital expenditure for Q1 2018 totalled to Rs. 2.4 bn (USD15.4 mn). Capital expenditure was directed in the main towards investments in High-Speed Broadband infrastructure.

Group Operating Free Cash Flow (OFCF) was recorded at Rs. 5.5 bn for Q1, 2018. At an entity level, Dialog Axiata PLC continued to contribute a major share of Group Revenue (79%) and Group EBITDA (77%).

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. 7.7 bn, an increase of 3% QoQ and 33% YoY.

The adoption of SLFRS 15 had a positive impact on the Q1 performance of the Company resulting in an EBITDA upliftment of Rs. 222 mn. Company NPAT was recorded at Rs. 2.5 bn for Q1 2018 declining 20% QoQ due to increase in depreciation and non-cash translational forex loss albeit growing 43% YoY.Post normalisation for SLFRS 15 impact, DTV Revenue grew by 9% YoY and QoQ to reach Rs. 1.6Bn for Q1 2018 driven by aggressive subscriber acquisition. Leveraging its broader subscriber base, DTV introduced Sri Lanka’s first online media buying platform, adhub.lk, enabling small/medium entrepreneurs and corporates to advertise on Dialog Television. Normalised DTV EBITDA grew 217% YoY to reach Rs. 205Mn for Q1 2018 as a result of strong revenue growth. Accordingly, DTV Net Loss declined to Rs. 118Mn in Q1 2018 relative to a Net Loss of Rs. 311Mn for the corresponding period in 2017.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs. 3.7Bn for Q1 2018. DBN EBITDA grew 46% YoY to record Rs. 2.2Bn in Q1 2018. Downstream of healthy EBITDA performance, DBN NPAT was recorded at Rs. 605Mn for Q1 2018 increasing by 155% YoY.