Friday, 8 November 2013 00:00
-
- {{hitsCtrl.values.hits}}
Dialog Axiata PLC announced its consolidated financial results for the nine months ended 30 September 2013 yesterday.
Financial results included those of Dialog Axiata PLC and of the Dialog Axiata Group post-consolidation with subsidiaries Dialog Broadband Networks Ltd. (DBN), and Dialog Television Ltd. (DTV).
The Group demonstrated a strong revenue growth across Mobile, International, Digital Pay Television, Tele-infrastructure and Fixed Line businesses to record consolidated revenue of Rs. 16.1 b for Q3 2013. Group revenue for the nine months ending 30 September 2013 was recorded at Rs. 47 b, delivering growth of 3% quarter-on-quarter (QoQ) and 14% year-to-date (YTD) respectively.
Strong revenue growth
On the backdrop of strong revenue growth, Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) increased 4% QoQ with Q3 2013 EBITDA being recorded at Rs. 5.2 b. Group EBITDA for the first nine months of 2013 was recorded at Rs. 15.3 b, up 8% compared to the corresponding period in 2012, and featured an YTD EBITDA margin of 33%.
Performance below EBITDA continued to be negatively impacted by the depreciation of the SLR relative to the USD by 1.2% QoQ, resulting in the recognition of a non-cash translational foreign exchange loss of Rs. 222 m in the 3rd quarter.
The Group also recorded a non-cash translational foreign exchange loss of Rs. 856 m in the 2nd Quarter. Inclusive of the recognition of the said non-cash translational foreign exchange loss, Group net profit for Q3 2013 increased by 61% to be recorded at Rs. 1.5 b.
Group net profit for the nine months ended 30 September 2013 was recorded at Rs. 4.1 b, a decrease of 20% compared to the corresponding period in 2012. While the corresponding period in 2012 featured substantial non-cash foreign exchange losses (totalling to Rs. 2.5 b), the accounting impact of the said losses were mitigated through the recognition of the reversal of deferred tax provisions amounting to Rs. 2.3 b.
Group NPAT post normalisation for the non-cash foreign exchange loss was recorded at Rs. 1.7 b for Q3 2013 and Rs. 5 b for the nine months ended 30 September 2013 respectively, representing a decrease of 3% and 11% relative to the corresponding period in 2012 on similarly normalised basis excluding exceptional provisions and reversals.
Mobile, International and Tele-Infrastructure
At an entity level, Dialog Axiata PLC featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group revenue (87%) and of Group EBITDA (89%).
Company revenue grew by 3% QoQ on the back of its eight million over mobile subscriber base, to reach Rs. 14.1 b in Q3 2013. Revenue for the nine months ended 30 September 2013 was recorded at Rs. 41.2 b, up 12% relative to the corresponding period in 2012.
Underpinned by strong revenue performance Company EBITDA increased by 7% QoQ to be recorded at Rs. 4.7 b in Q3 2013.The Company EBITDA margin improved by one percentage point QoQ to be recorded at 33%. Company EBITDA for the nine months ended 30 September 2013 grew by 9% relative to the corresponding period in 2012 to be recorded at Rs. 13.6 b, translating to an YTD EBITDA margin of 33%.
Company NPAT was impacted by non-cash translational Foreign Exchange Losses as alluded to previously. Company NPAT for Q3 2013 was recorded at Rs. 1.8 b, an increase of 79% QoQ. Company NPAT for the nine months ended 30 September 2013 was recorded at Rs. 4.4 b, representing a contraction of 14% compared to the corresponding period in 2012, due to the differential in exceptional charges and reversals (as alluded to previously with respect to Group financials) recorded in the periods under comparison.
On normalised basis (excluding exceptional charges and reversals), Company NPAT decreased by 6% on YTD basis relative to the first nine months in 2012. Following the expiry of its 15-year tax holiday in 2012, the Company recorded a provision for income tax on the basis of 2% of revenue amounting to Rs. 283 m in Q3 2013 and Rs. 826 m for the nine months ended 30 September 2013.
Dialog Television
Dialog Television (DTV), the Digital Pay Television business of the Dialog Group consolidated growth momentum gained over previous quarters to record revenue of Rs. 2.6 b for the nine months ended 30 September 2013 representing YTD growth of 20% relative to the corresponding period in 2012. DTV’s subscribed base surpassed the 300,000 milestone during the 3rd Quarter, representing an increment of 50,000 subscribers YoY.
Cost expansion arising from enhancements effected to DTV’s service offering including but not limited to the launch of HD services, expansion of channel genres and the launch of prepaid services resulted in contraction of EBITDA by 10% YTD to reach Rs. 447 m for the nine months ended 30 September 2013. Accordingly DTV net profit for the same period was recorded at a negative Rs. 19 m, compared to a net profit of Rs. 96 m posted for the corresponding period in 2012.
Dialog Broadband Networks
Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband business recorded revenue of Rs. 4.4 b for the nine months ended 30 September 2013, representing an YTD increase of 22%. Revenue growth YTD was achieved in the main through the successful consolidation of Suntel Ltd., supplemented by healthy growth in organic revenue streams.
EBITDA for the same period improved by 5% to be recorded at Rs. 1.2 b. The gain in EBITDA could not however be translated to NPAT performance due to the recording of additional depreciation charges accruing from build out of the Company’s fixed 4G LTE network and the amortisation of spectrum license fees associated with fixed 4G LTE spectrum assets. DBN’s net loss for the nine months ended 30 September 2013 was recorded at Rs. 280 m relative to the net loss of Rs. 126 m recorded in the corresponding period in 2012.
Strategic investments
The Group continued to make strategic investments in high speed mobile and fixed broadband infrastructure. Group capital expenditure for the nine months ended 30 September 2013 was recorded at Rs. 20.4 b. Group capital expenditure for Q3 2013 included strategic investments made on account of mobile license and 2G spectrum renewals amounting to Rs. 1.6 b. On the back of significantly higher capital expenditure, the Group recorded a negative free cash flow of Rs. 5.2 b for the nine months ended 30 September 2013.
Notwithstanding the expansion of capital investments, the Dialog Group continues to exhibit a structurally robust balance sheet with the Group’s net debt to EBITDA being maintained at a modest level of 1.14x as at end of September 2013. The Dialog Group was reaffirmed a Fitch National Long Term Rating of AAA(lka)/Stable in September 2013.
