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Dialog posts strong Q2 results

Dialog Axiata PLC announced, its consolidated financial results for the six months ended June 30, 2011 yesterday. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post consolidation with subsidiaries Dialog Broadband Networks (Pvt.) Ltd (“DBN”) and Dialog Television (Pvt.) Ltd (“DTV”).

The group recorded a strong growth in revenue to reach Rs 11.1billion in Q2 2011 and Rs 22.0 billion for 1H 2011 respectively, an increase of 1 percent QoQ and 9 percent Year on Year.

Group profitability was founded on a healthy momentum in EBITDA growth with Q2 2011 EBITDA being recorded at Rs 3.8 billion, an increase of 7 percent QoQ.

Group EBITDA for 1H 2011 was posted at Rs 7.3 billion up 3 percent compared to the corresponding period in 2010. Group Net profit for Q2 2011 was posted at Rs 1.4 billion, up 19 percent QoQ. Net Profit for 1H 2011 was recorded at Rs 2.5 billion up 22 percent Year on Year. Financial outcomes at Group level were driven by strong performance across the Company and its subsidiaries.

Bolstered by a circa 7 million mobile subscriber base, EBITDA at company level increased by 7 percent QoQ to reach Rs 3.5 billion in Q2 2011.

Company EBITDA for 1H 2011 however showed contraction by 4 percent Year on Year, due in the main to an 18 percent increase in operating costs.

Cost expansion is attributable in the main to revenue linked costs associated with International origination and Domestic Interconnection charges, and escalation in network operating costs in line with aggressive expansion of the Company’s 2G and 3G infrastructure footprint. Cost escalation Year on Year was further influenced by the impact of non-recoverable.

VAT expenditure, pursuant to changes in the VAT environment applicable to the Telecom Industry since January 2011.

Company PAT grew by 18 percent QoQ to be recorded at Rs 1.6 billion in Q2 2011.

In line with EBITDA contraction on a Year on Year basis, Company PAT in 1H 2011 was recorded at Rs 3.0 billion, down 3 percent relative to the corresponding period in 2010.

Dialog Television (DTV) continued its positive performance trajectory recording revenue growth of 11 percent to reach Rs 1.1billion in 1H 2011.

During the same period DTV EBITDA grew to Rs 259 million, an improvement of 382 percent Year on Year.

DTH Pay Television subscribers increased by 16 percent relative to Q2 2010, reaching a total of 184,000.

Dialog Broadband Networks encompassing Dialog’s Fixed Telecommunications Business continued to consolidate performance trends of the previous quarters, to record its fifth successive quarter of positive EBITDA in Q2 2011 to be recorded at Rs 158million, a 9 percent increase QoQ.

EBITDA for 1H 2011 was recorded at Rs 303million compared to a negative EBITDA of Rs 10million in the corresponding period in 2010. DBN however remained PAT negative in Q2 2011 on the backdrop of the accelerated amortization of of its CDMA and WiMAX networks.

Group Capital expenditure in 1H 2011 amounted to Rs 5.5billion.



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