Wednesday, 19 February 2014 00:48
Dialog Axiata PLC announced its consolidated financial results for the year ended 2013 on Monday. 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 strong revenue growth across mobile, international, digital pay television, tele-infrastructure and fixed line businesses to record consolidated revenue of Rs. 63.3 b for FY 2013, delivering a year-to-date growth of 12%. Group revenue for Q4 2013 was recorded at Rs. 16.3 b, reflecting growth of 1% quarter-on-quarter.
Revenue growth in combine with continued operational improvements led to the Group posting a healthy 7% YTD growth in EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) with FY 2013 EBITDA being recorded at Rs. 19.9 b. Group EBITDA Margin for FY 2013 declined marginally by 1.5 percentage points on YTD basis to 31.5%.
Group EBITDA contracted by 12% QoQ due to higher cost base including escalation of network and other operating costs.
Group Net Profit for FY 2013 was recorded at Rs. 5.2 b, a decrease of 14% compared to FY 2012, inclusive of a provision for income tax of Rs. 1.1 b, following the Company completing its tax holiday as at the end of FY2012. Group Net Profit Before Tax (NPBT) was recorded at Rs. 6.3 b.
Non-operational performance below EBITDA was positively impacted by the appreciation of the SLR relative to the USD by 0.8% QoQ, resulting in the recognition of a non-cash translational foreign exchange gain of Rs. 347 m in the fourth quarter.
Inclusive of the recognition of the said non-cash translational foreign exchange gain, Group net profit for Q4 2013 decreased by 27% to be recorded at Rs. 1.1 b. On normalising for the foreign exchange gain, Group NPAT was recorded at Rs. 769 m, decreased by 56% QoQ. Group net profit for FY 2013 was recorded at Rs. 5.2 b, a decrease of 14% compared to FY 2012.
While the corresponding period in 2012 featured substantial non-cash foreign exchange losses (totalling to Rs. 2.2 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. 5.9 b for FY2013, representing a decrease of 5% relative to the corresponding period in 2012 on similarly normalised basis excluding exceptional provisions and reversals.
In line with the performance of the Group and taking into account forward investment requirements to serve the nation’s demand for mobile, fixed, broadband and digital television services, the Board of Directors of Dialog Axiata resolved to propose for consideration by the shareholders of the Company, a cash dividend to ordinary shareholders representing 45% of Group earnings and translating to 29 cents per share and totalling to Rs. 2,362 m. The dividend so proposed will be considered for approval by the shareholders at the Annual General Meeting of the Company, the date pertaining to which would be notified in due course.
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 (88%) and of Group EBITDA (89%).
Company revenue grew by 1% QoQ on the back of its over eight million mobile subscriber base, to reach Rs. 14.2 b in Q4 2013. Revenue for FY 2013 was recorded at Rs. 55.4 b, up 11% relative to FY 2012. Underpinned by strong revenue performance Company EBITDA for FY 2013 grew by 9% to be recorded at Rs. 17.6 b translating to an YTD EBITDA margin of 32%.
Company NPAT for Q4 2013 was recorded at Rs. 1.6 b, a decrease of 8% QoQ. Company NPAT for FY 2013 was recorded at Rs. 6.1 b, representing a contraction of 2% compared to FY 2012, due to the differential in exceptional charges and reversals recorded in the periods under comparison.
On normalised basis, Company NPAT increased by 6% on YTD basis relative FY 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. 277 m in Q4 2013 and Rs. 1.1 b for FY 2013.
In December, Dialog secured the distinction of being appointed the first and only authorised Partner and Service Provider for Apple iPhone in Sri Lanka. Following the establishment of the partnership between Apple and Dialog, 4G compatible Apple iPhones can now be connected on 4G mode to Dialog’s 4G LTE network. Accordingly, Dialog’s 4G and 3G HSPA+ networks will provide Apple users with unparalleled connectivity and a superior smart phone experience.
Dialog Television (DTV), the digital pay television business of the Dialog Group, continued its positive growth momentum recording YTD revenue growth of 21% to reach Rs. 3.6 b for FY 2013. DTV EBITDA was recorded at Rs. 662 m for FY 2013, an improvement of 4% YTD underpinned by strong revenue growth.
Net profit for FY 2013 was recorded at negative Rs. 302 m, compared to a net profit of Rs. 11 m in FY 2012 mainly due to one-off impairment of assets relating to DVBT and DVBT CPEs. On excluding the alluded one-off impairment, NPAT was recorded at Rs. 28 m. DTV’s Pay TV subscriber base increased by 26% YoY to be recorded at 332,000 as at the end of FY 2013.
Dialog Broadband Networks (DBN) featuring the Group’s fixed telecommunications and broadband business recorded revenue of Rs. 5.8 b for FY 2013, representing a YTD increase of 15%. Revenue growth YTD was achieved in the main through the successful consolidation of Suntel Ltd., supplemented by healthy growth in data and voice solutions revenues. EBITDA contracted by 12% on a YTD basis due to high network and other costs associated with fixed LTE deployment.
DBN’s net loss for FY 2013 was recorded at Rs. 483 m relative to the net loss of Rs. 120 m in FY 2012. Negative NPAT performance is attributed to 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.
Group capital expenditure for FY 2013 was recorded at Rs. 28.3 b. Group capital expenditure for FY 2013 included strategic investments in spectrum assets featuring the acquisition of Spectrum for Mobile 4G-LTE services and the payment of spectrum re-farming fees to enable the conversion of Spectrum amalgamated through the acquisition of Sky TV for the purpose of providing fixed 4G-LTE services.
Capital expenditure for FY 2013 additionally included investments made on account of mobile license and 2G spectrum renewals. On the back of significantly higher capital expenditure, the Group recorded a negative free cash flow of Rs. 8.4 b for FY 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 1.29x as at end of FY 2013.