Dialog records Rs 5.4 b net profit

For 2011 financial year:

Dialog Axiata PLC recorded strong revenue growth across all segments to reach Rs 11.9 billion for the fourth quarter, a QoQ growth of 3%. Group revenue grew 10% YoY to be recorded at Rs 45.6 billion for FY 2011.

Revenue growth in combine with continued operational improvements lead to the Group posting a healthy 9% QoQ growth in EBITDA with Q4 2011 EBITDA being recorded at Rs 4.7 billion, inclusive of Rs 311 million accruing from the recognition of Telecommunication Development Fund reimbursement from the TRCSL.

The Group EBITDA margin grew by 2 percentage points on a QoQ comparison to reach 40% for the fourth quarter. Group EBITDA for the FY 2011 was recorded at Rs 16.4 billion up 9% compared to the corresponding period in 2010 and featured an EBITDA margin of 36%.

Group net profit for Q4 2011 was posted at Rs 1.4 billion, up 2% QoQ. Net profit for the FY 2011 was recorded at Rs 5.4 billion, up by 6% YoY. Growth in Group profitability was achieved on the backdrop of substantial Foreign Exchange (translational/non-cash) losses totaling to Rs 638 million resulting from the devaluation of the Rupees in the fourth quarter.

Financial outcomes at group level were driven by strong operational performance across the Company and its subsidiaries. The company, featuring mobile, international and tele-Infrastructure businesses continued to leverage its market leading position to deliver strong growth in revenue and profitability. The company recorded revenues of Rs 10.9 billion and Rs 41.8 billion for Q4 and FY 2011 respectively. Company revenue grew by 2% QoQ and 10% YoY. Costs at company level grew by 13% YoY.

Cost expansion is attributable in the main to revenue linked costs associated with international origination, roaming, domestic interconnection charges and escalation in network operating costs in line with the aggressive expansion of the company’s 2G and 3G infrastructure footprint.

Cost escalation was further influenced by the impact of non-recoverable VAT expenditure, in light of changes in the VAT environment applicable to the telecom industry since January 2011.

Notwithstanding revenue linked cost expansion, EBITDA at company level increased by 6% QoQ (inclusive of the recognition of TDF reimbursement) to reach Rs 4.3 billion in Q4 2011.

The Company’s EBITDA margin improved by 2 percentage points QoQ, to reach 40%. Company EBITDA was recorded at Rs 15.2 billion for the FY 2011 featuring an EBITDA margin of 36% for the full year. On the backdrop of robust EBITDA performance, Company PAT was recorded at Rs 1.7 billion in Q4 2011. Notwithstanding the growth in EBITDA performance, Company PAT (recorded at Rs 6.3 billion) contracted by 4% relative to the corresponding period in 2010.

PAT contraction on an YoY basis was due to a foreign exchange (translational/noncash) loss of Rs 502 million in contrast with the foreign exchange gain of Rs 686 million recorded in the previous year, reflecting an adverse change of Rs 1.19 billion YoY with respect to foreign exchange translation recognition.

Dialog Television (DTV) continued its growth momentum recording YoY revenue growth of 18% to reach Rs 2.4 billion for FY 2011. EBITDA for Q4 2011 was posted at Rs 197 million and Rs 574 million for FY 2011, an improvement of 67% QoQ and 68% YoY respectively. DTV PAT crossed over in to positive terrain for the first time in Q4 2011, recording a bottom line of Rs 49 million for Q4 2011 and Rs 26 million for FY 2011. PAT turnaround at DTV was underpinned by an aggressive increase in subscriber base and revenues.

The Group continued to make aggressive investments towards expanding its nationwide ICT infrastructure footprint and the application of cutting edge technology across its mobile, fixed and broadband businesses. Group Capital expenditure for the FY 2011 amounted to Rs 8.7 billion.