Dialog posts strong 1Q results | Sunday Observer

Dialog posts strong 1Q results

Dialog Axiata PLC released its consolidated financial results for the three months ended March 31, 2019 last week.

The 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 all key business segments, namely, Mobile, International, Tele-infrastructure, Digital Pay Television and Fixed Line to record a consolidated revenue of Rs. 29.0 bn for Q1 2019, demonstrating a growth of 2% Quarter-on-Quarter (QoQ) and 11% Year-on-Year (YoY).

Underpinned by strong revenue growth and cost optimisation, Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 5% QoQ and 17% YoY to record at Rs12.0Bn for Q1 2019. Dialog Group adopted SLFRS 16, ‘Leases’, with effect from January 1, 2019. The adoption of the standard resulted in an EBITDA upliftment of Rs. 639 mn for Q1, 2019 which is a 2.2pp increase in the EBITDA margin.

The impact on Net Profit was not material. Normalised for the positive impact from SLFRS 16, the EBITDA margin was recorded at 39.4% for Q1, 2019.

The Group Net Profit After Tax (NPAT) recorded significant growth QoQ to reach Rs. 4.9 bn for Q1, 2019 against Rs. 0.1 bn recorded in Q4, 2018, benefiting from strong EBITDA performance and non-cash translational forex gains.

On a YoY basis, the NPAT growth was recorded at 72%.

Dialog Group continued to be a significant contributor to state revenues, remitting Rs. 9.4 bn to the Government during Q1, 2019. Total remittances included Direct Taxes and Levies amounting to Rs. 3.6 bn and Rs. 5.8 bn in Consumption Taxes collected on behalf of the GoSL.

The Group capital expenditure for Q1 2019 totalled to Rs. 2.6 bn representing a capex to revenue ratio of 9%. 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. 7.9 bn for Q1 2019.

For the first time in South Asia, Dialog demonstrated a fully standards based 5G mobile service, integrating 5G network infrastructure with the world’s fastest foldable 5G device.

At an entity level, Dialog Axiata PLC continued to contribute a major share of Group Revenue (72%) and Group EBITDA (78%). Company revenue for Q1, 2019 declined by 2% QoQ albeit growing 1% YoY to reach Rs20.8Bn. The subdued revenue performance was due to transfer of wholesale business to DBN.

Company EBITDA for Q1 2019 was recorded at Rs. 9.3 bn, an increase of 62% QoQ and 22% YoY.

Dialog Television (DTV) revenue grew 9%. Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs. 6.7 bn for Q1, 2019, representing an increase of 22% QoQ and 83% YoY. 

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