Dialog Axiata PLC announced its consolidated financial results for the six months ended 30th June 2018. 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”), Dialog Television (Pvt) Ltd (“DTV”), Digital Holdings Lanka (Pvt) Ltd (“DHL”) and Colombo Trust Finance PLC (CTF).

The Group concluded the 1st Half of 2018 on a strong note, continuing its growth momentum across Mobile, Fixed Line, Digital Pay Television and Tele-infrastructure businesses to record a consolidated revenue of Rs52.7Bn, demonstrating a growth of 17% Year-to-Date (“YTD”) while revenue growth moderated to 2% Quarter-on-Quarter (“QoQ”) to be recorded at Rs26.6Bn for Q2 2018. Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew 32% YTD and 4% QoQ to reach Rs20.3Bn for 1H 2018 and Rs10.4Bn for Q2 2018 respectively. The growth was supported by resilient core revenue growth coupled with efficient cost management and operational efficiencies.

The adoption of SLFRS 15 ‘Revenue from Contracts with Customers’ with effect from 1 st January 2018 resulted in an EBITDA upliftment of Rs1Bn for 1H 2018 which is a 1.6pp increase in EBITDA margin. Normalised for the positive impact from SLFRS 15, the EBITDA margin was recorded at 36.9% for 1H 2018. The impact on revenue from the adoption of the standard was not material.

The Group Net Profit After Tax (“NPAT”) demonstrated a growth of 46% YTD to record at Rs5.7Bn for 1H 2018 underpinned by strong EBITDA performance. Q2 2018 NPAT remained at Q1 2018 level at Rs2.8Bn, as EBITDA improvement was negated by the increase in depreciation and taxes. The adoption of SLFRS 15 resulted in an NPAT upliftment of Rs197Mn for 1H 2018.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs17.8Bn to the Government of Sri Lanka (GoSL) during the first six months of 2018. Total remittances included Direct Taxes and Levies amounting to Rs4.9Bn and Rs12.9Bn in Consumption Taxes collected on behalf of the GoSL.

Group capital expenditure for 1H 2018 was recorded at Rs11.2Bn representing a capex to revenue ratio of 21%. Capital expenditure was directed in the main towards investments in High-Speed Broadband infrastructure to further strengthen the Group’s position in Sri Lanka’s Broadband sector. As a testament to Dialog’s Leadership in Sri Lanka’s Broadband sector, Dialog mobile was conferred with 2018 Q1-Q2 Speedtest® Award by Ookla® as the fastest Mobile Broadband Network in the country. Ookla, the global leader in mobile network testing applications, confirmed Sri Lanka’s average download speeds to reflect 16.80Mbps, whilst Dialog mobile users have experienced download speeds of 21.73Mbps as confirmed by over 100,000 speed test samples carried out by Sri Lankans across the country.

Group operating free Cash Flow (“OFCF”) was recorded at Rs5.2Bn for 1H 2018. Dialog Group continued to exhibit a structurally strong balance sheet as the Net Debt to EBITDA ratio remained healthy at 0.90 times as at end of June 2018.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (80%) and Group EBITDA (78%). On the back of its Mobile customer base of over 13.2Mn subscribers, Company Revenue grew by 12% YTD to reach Rs41.9Bn for 1H 2018 with revenue for Q2 2018 being recorded at Rs21.3Bn, up 3% QoQ. Underpinned by strong revenue growth and cost initiatives, Company EBITDA was recorded at Rs15.8Bn for 1H 2018 and Rs8.2Bn for Q2 2018 respectively, representing an increase of 30% YTD and 7% QoQ.

The Company NPAT demonstrated a growth of 26% YTD to be recorded at Rs5.2Bn for 1H 2018, driven by strong EBITDA growth. On a QoQ basis, NPAT grew by 7% to record Rs2.7Bn for Q2 2018.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with a subscriber growth of 13% YoY by end Q2 2018. Post normalization for SLFRS 15 impact, DTV Revenue grew by 5% YTD to be recorded at Rs3.2Bn for 1H 2018. Normalised DTV EBITDA grew 129% YTD to reach Rs400Mn for 1H 2018 as a result of strong revenue growth and cost management. Accordingly, DTV Net Loss declined to Rs245Mn in 1H 2018 relative to a Net Loss of Rs528Mn for the corresponding period in 2017.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications and Broadband Business recorded revenue of Rs7.2bn for 1H 2018 increasing 21% YTD. Downstream of strong revenue performance, DBN EBITDA recorded a growth of 35% YTD to record Rs4.2Bn for 1H 2018. In line with performance dynamics at EBITDA level, DBN NPAT grew 78% YTD to record at Rs1Bn for 1H 2018.