Dialog consolidates YTD performance with stable 3Q

• Revenue growth +1% YTD, EBITDA and PAT outpace revenue at +4% and +3% respectively due to diligent cost management
• Direct and indirect taxes, fees and levies paid to Govt. near Rs. 14 b
• Rs. 12 b continuing Capex Investments in high speed broadband and other infrastructure

Dialog Axiata PLC yesterday said it has managed to consolidate their year-to-date (YTD) performance with a stable third quarter whilst investing further to grow its business. 

The Group concluded 3Q 2020 with stable performance across Mobile, Fixed Line and International businesses despite multiple challenges stemming from the COVID-19 pandemic. Group Revenue recorded a growth of 5% on a Year-on-Year (YOY) basis to reach Rs. 30.5 billion for 3Q 2020 mainly due to the recovery in Mobile Revenue. 

Group Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) reached Rs. 13.6 billion for 3Q 2020, up 14% YOY driven by Revenue performance and diligent cost control initiatives. Group Net Profit after Tax (NPAT) reached Rs. 4.8 billion to record growth >100% YOY for 3Q 2020 due to EBITDA performance and forex gain of Rs. 188 million relative to the forex loss of Rs. 1 billion in 3Q 2019. 

On a Year-to-Date (YTD) basis, the Group performance remained moderate owing to free offers and challenges associated with COVID-19 dampening the performance in Q2 2020. The YTD Revenue impact from COVID-19 is estimated to be Rs. 4 billion led by Roaming, Enterprise, Television and Retail Mobile segments. 

The Dialog Group recorded a consolidated revenue of Rs. 87.9 billion for the nine months ending 30 September, demonstrating a growth of 1% YTD. On the back of cost control initiatives, Group EBITDA grew 4% YTD to reach Rs. 36.5 billion. The Group EBITDA Margin was accordingly recorded at 41.5% for the nine months ending 30 September. Underpinned by stable EBITDA performance, Group NPAT demonstrated a growth of 3% YTD to record Rs. 8.6 billion for the nine months ending 30 September.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 13.8 billion to the Government of Sri Lanka (GoSL) during the nine months ending 30 September. Total remittances included Direct Taxes and Levies amounting to Rs. 4.1 billion and Rs. 9.7 billion in Consumption Taxes collected on behalf of the GoSL. 

Group capital investment for the first nine months of 2020 was recorded at Rs. 12 billion, representing a capex to revenue ratio of 14%. Capital expenditure was directed in the main towards continued investments in transforming Dialog into a digital telco, by digitising all spheres of the organisation and to further strengthen the Group's leadership in Sri Lanka's mobile and home Broadband sectors. 

Group Operating Free Cash Flow (“OFCF”) has recorded at Rs. 21.5 billion for the first nine months of 2020, up from Rs. 17.6 billion recorded for the corresponding period in 2019. Consequently, cash balance increased by Rs. 8.4 billion as compared to year end 2019 to record at Rs. 13.3 billion by the end of September 2020. Dialog Group continued to exhibit healthy and low geared balance sheet as the Net Debt to EBITDA ratio remained at 0.53 times as at 30 September. 

At an entity level, Dialog Axiata PLC continued to contribute a major share of Group Revenue (69%) and Group EBITDA (75%). Company revenue was record at Rs. 21.1 billion for 3Q 2020 and Rs. 60.6 billion for the first nine months of 2020, up 3% YOY albeit declining 2% YTD, mainly due to the COVID-19 related core Revenue slowdown. 

Company EBITDA was recorded at Rs. 10.2 billion for 3Q 2020, up 12% YOY while it reached Rs. 27.3 billion for the first nine months of 2020, representing an increase of 2% YTD. Downstream of EBITDA performance the Company NPAT was recorded at Rs. 4.6 billion for 3Q 2020 and Rs. 9 billion for first nine months of 2020, increasing 5% YTD. 

Dialog Television (DTV), continued its leadership position in the Digital Pay Television space with a subscriber growth of 11% YOY by end 3Q 2020. DTV Revenue declined 3% YOY to reach Rs. 2.2 billion for 3Q 2020 amid continued consumer wallet pressure. On a YTD basis, revenue was down 1% to record Rs. 6.5 billion for nine months ending 30 September, due to COVID-19 associated free services and slowdown in Q2 2020. Downstream of Revenue performance, DTV EBITDA recorded a decline of 9% YTD to reach Rs. 1.7 billion for the first nine months of 2020. Accordingly, DTV Net Loss increased to Rs. 845 million for the nine months ending 30 September relative to a net loss of Rs. 335 million for the corresponding period in 2019. 

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs. 8 billion for 3Q 2020, up 10% YOY, while the Revenue was recorded at Rs. 23.3 billion for the nine months ending 30 September, up 13% YTD. DBN EBITDA recorded a growth of 11% YTD to reach Rs. 7.6 billion for the nine months ended 30 September. NPAT reached to Rs. 626 million, up 8% YTD for the first nine months of 2020.