August, 5, 2021
Dialog Axiata PLC announced today (Thursday 05th August 2021), its consolidated financial results for the six months ended 30th June 2021. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).
The Group sustained its consistent performance despite the challenges associated with Covid-19 pandemic and resulting lockdowns in Q2 2021. Dialog reported strong performance across all business segments, viz, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure, recording growth relative to prior periods namely, Year-to-Date (“YTD”), Quarter-on-Quarter (“QoQ”) and Year-on- Year (“YoY”). Accordingly, the Group recorded consolidated Revenue of Rs.67.9Bn for 1H 2021 and Rs35.1Bn for Q2 2021. Underpinned by topline performance and diligent cost management initiatives, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew to reach Rs27.9Bn for 1H 2021 and was recorded at Rs14.2Bn for Q2 2021 up 4% QoQ. The EBITDA margin accordingly improved 1.2pp YoY recorded at 41.0% for 1H 2021.
The Group Net Profit After Tax (“NPAT”) benefited from decline in finance cost on YTD and YoY basis while on a QoQ basis NPAT benefited from lower forex losses amid depreciation of the Sri Lankan Rupee against the United States Dollar being narrowed to 0.1% for Q2 2021 relative to 7.1% recorded for Q1 2021. Driven by aforementioned factors along with strong EBTIDA growth, Group NPAT was recorded at Rs.7.0Bn for 1H 2021 while recording at Rs4.6Bn for Q2 2021.
Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs11.7Bn to the Government of Sri Lanka (GoSL) during the first six months of 2021. Total remittances included Direct Taxes and Levies amounting to Rs4.6Bn and Rs7.0Bn in Consumption Taxes collected on behalf of the GoSL.
The Group capital expenditure was ramped up in 1H 2021 to meet the surge in data demand owing to partial lockdowns that prevailed during the period, that led to higher instances of Work and Learn from Home. Accordingly, the Capital expenditure reached Rs6.5Bn for 1H 2021 up 36% YTD while Total Investments since start of the Pandemic in Q1 2020 exceeded Rs35Bn. Capital expenditure was directed towards investments in High-Speed Broadband infrastructure to further expand Dialog’s leadership in Sri Lanka's Broadband sector. Despite the rise in Capex the Group Operating Free Cash Flow (“OFCF”) improved to Rs19.6Bn for 1H 2021 and continued to exhibit a low geared balance sheet with the Net Debt to EBITDA ratio being maintained at 0.42x as at end of June 2021.
In line with the increased Capex, the Group reached yet another milestone in its commitment to expand connectivity to every corner of the nation by launching its 4,000th network tower in Thihawa village, Kurunegala. Dialog has added 515 new towers to the network during the pandemic period in reaching 4,000 mobile 4G sites in its network, the highest ever tower count recorded in Sri Lanka. Dialog’s network accommodated more than 100% growth in mobile data traffic & more than 200% growth in fixed data traffic during the pandemic period. To meet the surge in demand, Dialog upgraded the capacity of 2,831 mobile 4G towers and 1,816 fixed broadband towers and is on track to enhance the network capacity further by the end of the year. Dialog also made more than twofold enhancements to the spectrum assigned to mobile 4G network by investing in 40MHz spectrum in the 2,600MHz band and re-allocating 13MHz of frequency previously used for 2G and 3G to 4G broadband. This is a significant enhancement to Dialog’s spectrum assignment for 4G Broadband, which will enable the network to deliver superior performance, despite catering to a larger customer base and traffic growth.
Furthermore, reiterating its commitment to social, environmental and economic sustainability, Dialog Axiata PLC’s Environmental Management System was certified for the globally recognized ISO 14001:2015 standard for its full scope of operations, becoming the first Quad-play Telco (Mobile, Fixed, Media and Broadband) in South Asia to do so. The ISO 14001 standard is a voluntary international certification afforded to companies with meaningful environmental policies that create and maintain an effective Environmental Management System (EMS) across their organizations. It is reviewed and audited annually to retain a rigorous focus on the topic. Like other ISO standards, this standard is reviewed and updated periodically by an international panel of experts.
During the quarter Dialog also had the distinction of being awarded the title ‘Sri Lanka’s Most Valuable Brand’ for the third consecutive year by Brand Finance, the world’s leading independent brand valuation consultancy, at the 18th edition of its annual review. Dialog also retained its brand rating of AAA for the seventh consecutive year and the title of ‘Most Valuable Telecommunications Brand’ for the 14th consecutive year, reaffirming the brand’s ethos of empowering and enriching Sri Lankan lives and enterprises. Furthermore, reflecting the profound impression that the Dialog brand has made in the hearts and minds of Sri Lankans, Dialog was also recognised as the ‘Most Loved Telecommunications Brand’.
At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (65%) and Group EBITDA (72%). Company revenue was recorded at Rs44.1Bn for 1H 2021 and Rs22.3Bn for Q2 2021 up 2% QoQ, stemming from strong growth witnessed in Data and Voice segments. Downstream of the revenue performance Company EBITDA was recorded at Rs20.0Bn for 1H 2021 and Rs10.1Bn for Q2 2021. Company NPAT was recorded at Rs5.6Bn for 1H 2021 and Rs3.6Bn for Q2 2021.
Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with a subscriber growth of 9% YoY to exceed 1.6Mn homes by end June 2021. Driven by strong uptake in prepaid segment, DTV revenue was recorded at Rs4.9Bn for 1H 2021 while on a QoQ basis revenue was up 4% to reach Rs2.5Bn for Q2 2021. Downstream of revenue performance, DTV EBITDA reached Rs1.4Bn for 1H 2021. Consequently, DTV Net Loss decreased to Rs420Mn in 1H 2021.
Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs20.3Bn for 1H 2021 and Rs11.0Bn for Q2 2021 up 19% QoQ, due to growth in wholesale revenue coupled with Fixed Broadband revenue. Following the revenue performance, DBN EBITDA increased to reach Rs6.6Bn for 1H 2021 while Net Profit reached Rs2.2Bn for 1H 2021.
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