Dialog consolidates performance with strong 3rd quarter

Dialog Axiata PLC Group recorded strong revenue growth across mobile, international, digital pay television, tele-infrastructure and fixed line businesses to record a consolidated revenue of Rs 41.5 billion for the nine months ending September 30, 2012, demonstrating a significant growth of 24 % YoY. Group Revenue for Q3 2012 was recorded at Rs 14.5 billion, reflecting growth of 3 % QoQ.

Group EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) for the 1st nine months of 2012 was recorded at Rs 14.2 billion, a significant increase of 21% relative to the corresponding period in 2011. Group EBITDA Margin for the nine months ended September 30, 2012 declined marginally by one percentage point on a YoY basis to 34 %. Group EBITDA for Q3 2012 was recorded at Rs 4.9 billion up 5% QoQ. The Group EBITDA margin improved by 1 percentage point QoQ to reach 34 %.

Non-Operational performance below EBITDA for the 1st nine months is characterised by noncash translational foreign exchange losses amounting to Rs 2.5 billion, and a one-off write back of the company’s deferred tax provision of positive Rs 2.3 billion while non-cash foreign exchange losses accrued due to the devaluation of the rupee by 13.9 % YTD, the deferred tax write back was effected subsequent to the company opting for a 2% post-tax holiday revenue tax with effect from 2013, in line with the terms of its Flagship Investor Agreement with the Board of Investment of Sri Lanka. Group NPAT (net profit after tax) for the nine months ended September 30, 2012 was accordingly recorded at Rs 5.1billion a significant improvement of 43 % YoY. Group NPAT improved significantly on a QoQ basis with Q3 2012 NPAT posted at Rs 4.7 billion compared to NPAT of Rs 879 million in Q2 2012. NPAT growth QoQ is underpinned by the one-off deferred tax write back of Rs 2.3 billion and a non-cash foreign exchange gain of Rs 447 million in the 3rd Quarter, in contrast with a total of Rs 2.9 billion in non cash foreign exchange losses recorded in the previous two quarters.

Group NPAT post normalisation for exceptional gains/charges (consisting of the non-cash foreign exchange loss of Rs 2.5Bn, deferred taxation reversal of Rs2.3Bn and costs related to the Suntel acquisition amounting to Rs 343Mn), is recorded at Rs 2.0Bn for Q3 2012 and Rs 5.6Bn for the nine months ended September 2012 demonstrating a significant growth in normalized NPAT performance of 16% QoQ and 76% YoY. Dialog Axiata PLC (“the Company”) 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 (88%). Company revenues grew by 19% compared to the 1st nine months of 2011 and 3% relative to Q2 2012. The Company’s revenue trajectory was driven by the growth in usage and the continued increase in its mobile subscriber base which was recorded at 7.6 Million as at the end of Q3 2012.

On the backdrop of robust performance in Revenue, Company EBITDA grew by 15% YoY to be recorded at Rs 12.5Bn for the 1st nine months of the year. Company EBITDA for Q3 2012 was recorded at Rs 4.3Bn an increase of 6% relative to Q2 2012. On the backdrop of strong EBITDA performance, Company NPAT grew by 21% YoY to be recorded at Rs 5.2Bn inclusive of the impact of the deferred tax reversal of positive Rs 2.3Bn and non-cash forex translational loss of negative Rs 2.5Bn. Company NPAT normalized for the exceptional items was recorded at Rs 5.7Bn for the nine months ended 30th September 2012 an increase of 45% relative to the 1st nine months of 2011.

Dialog Broadband Networks, featuring Dialog’s fixed telecommunications business continued to consolidate performance trends of the previous quarters, to record its tenth successive quarter of positive EBITDA in Q3 2012. Aided by the significant expansion in scale and consolidated operating performance following the merger and amalgamation of Suntel Limited, DBN Revenue for the nine months ending 30th September 2012 was recorded at Rs 3.7Bn, a significant expansion of 112% YoY. On the back of synergies achieved through the Suntel amalgamation YTD EBITDA improved by 159% to reach Rs 1.2Bn for the nine months ended 30th September 2012. Accordingly DBN NPAT for the 1st nine months of 2012 was recorded at negative Rs 126Mn a strong 81% improvement compared to the negative NPAT of Rs 658Mn posted in the corresponding period in 2011.