12th May 2011, www.lankabusinessonline.com
Sri Lankan mobile phone operator Dialog Axiata group said March 2011 net profit rose 64 percent to 1.2 billion rupees from a year ago with subscribers growing and lower losses from TV and broadband units.
The profit was slightly lower than the 1.3 billion rupee net profit made in the December 2010 quarter.
Dialog said in a stock exchange filing group sales for the March 2011 quarter rose 10 percent to 10.9 billion rupees from the previous year.
Basic earnings per share for the quarter rose to 14 cents from eight cents.
Dialog Axiata's cellular business operating profit fell to 869 million rupees from 1.4 billion rupees the previous year.
The group's television business reduced operating losses to 28 million rupees from 126 million rupees while its fixed telecommunication service loss fell to 204 million rupees from 294 million rupees.
The group's telecommunication infrastructure operations mad a 101 million rupees operating profit during the March 2011 quarter compared with a loss of 76 million rupees the year before.
Operating profit from the group's international operations rose to 386 million rupees from 49 million rupees.
"Group profitability was founded on a healthy momentum in EBITDA growth of seven percent, founded on the positive outcomes of strategic cost rescaling in combine with revenue gains," a company statement said.
"Judicious balance sheet restructuring initiatives featuring the achievement of a lower cost debt profile has underpinned the translation of EBITDA performance to commensurate growth in net profit at group, company and subsidiary levels."
Dialog said growth in mobile revenues was driven by a "healthy growth" in mobile subscribers to more than 07 million in the March 2011 quarter and the "increased adoption of mobile broadband services."
Company revenues were further bolstered through interconnection revenues of 0.4 billion rupees accruing since the implementation of the interconnection regime in June 2010.
However, Dialog said that notwithstanding a 10 percent growth in revenues, EBITDA at company level contracted by two percent to 3.3 billion rupees in the March 2011 quarter from a year ago.
"The company’s operating costs (excluding depreciation) grew by 17 percent compared to the first quarter of 2010," the statement said.
"International origination costs and domestic interconnection charges grew in tandem with the growth in corresponding revenue lines and formed a significant contributor (65 percent) to year-on-year cost expansion."
Dialog's network costs increased by 18 percent in tandem with the "aggressive expansion" of the company’s network infrastructure footprint and price hikes with respect to key inputs including electricity and fuel, the statement said.
The performance of the Dialog Television and Dialog Broadband Networks units continues to improve, the company said.
DTV revenue rose 15 percent to 561 million rupees in the March 2011 quarter from a year ago with its pay television business adding 13,000 new customers to reach a subscriber base of over 181,000 as at 31 March 2011.
"DBN continued to consolidate the performance trends of the previous quarters to record its fourth successive quarter of positive EBITDA in Q1 2011," the statement said.
"EBITDA turnaround at DBN was underpinned by substantial reductions in operating and direct costs accruing from cost rescaling programmes implemented over the past quarters."
DBN remained in the red in the wake of accelerated depreciation of its CDMA and WiMAX networks.
"The group continued to record positive Free Cash Flows (FCF) for the fifth consecutive quarter, with Q1 2011 FCF being recorded at 1.1 billion rupees," the Dialog statement said.
Dialog also said recently launched its 4th Generation LTE pilot network in Colombo to prepare its network capability for the next generation in high speed broadband services.
"The pilot network will initially cover several key zones within the city and is billed to be the first exposition of a 4th Generation LTE network in the South Asian region.
"The pilot network has demonstrated the delivery of over 100 Mbps in indoor demonstration mode and 40–50Mbps under outdoor mobile conditions."
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