Sri Lanka Dialog Makes Rs1.2bn Net Profit in March 2011 Quarter with Subscriber Growth

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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Dialog Posts Net Profit of Rs 1.69bn for 3rd Quarter of 2010

28th October 2010, www.dailynews.lk

Dialog Axiata PLC announced financial results for the nine months ended September 30, 2010.

Financial results included those of Dialog Axiata PLC and of the Dialog Axiata Group post consolidation with subsidiaries Dialog Broadband Networks and Dialog Television.

The Group posted a robust net profit after tax (NPAT) of Rs 1.69 billion for the third quarter of 2010 taking YTD 2010 NPAT for the first nine months to Rs 3.77 billion, a 138 percent increase YoY.

Group profit was underpinned by robust performance at Company level, with Dialog Axiata PLC featuring the Group's mobile business, posting a Q3 and nine months profit of Rs 1.90 billion and Rs 4.99 billion respectively, up 162 percent YoY.

Subsidiaries DTV and DBN delivered robust growth in terms of enhanced profitability at Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and NPAT levels.

Enhanced profitability at subsidiary level was underpinned by significant performance improvements in the Fixed Line, Broadband, and Television businesses of the Group. On an adjacent QoQ basis EBITDA (positive) and NPAT (negative) improved by 173 percent and 48 percent for DTV and 432 percent and 57 percent for DBN respectively.

Dialog Group revenues were recorded at Rs 30.67 billion for the nine months ended September 30, 2010, up 16 percent YoY and 4 percent QoQ.

Similar growth was delivered in terms of Group EBITDA which was recorded at Rs 11,151 million, up 5 percent QoQ and 74 percent YoY. The Group EBITDA margin improved by 12 percentage points YoY, to reach 36 percent. The positive growth trajectory in terms of EBITDA underpinned robust growth in Group NPAT of 138 percent YoY and 23 percent QoQ.

Driven by robust performance in the mobile market, the company recorded revenues of Rs 9,671 million in Q3 2010 and Rs 28,068 million for the first nine months.

Company revenue grew by 16 percent compared to the first nine months of 2009 and 4 percent relative to the previous quarter.

Dialog's Mobile subscriber base stood at 6.7 million as at end of September 2010, recording a 6 percent growth YoY.

The third Quarter of 2010 featured the transient impact of downward tariff adjustments in the mobile market, immediately following the introduction of floor rate regulations in July 2010.

Accordingly, Core Mobile revenues (excluding interconnection income) which exhibited 13 percent growth YoY, declined marginally by 1.5 percent on an adjacent QoQ basis. Notwithstanding the transient impact of tariff adjustments across the sector, total revenues were bolstered by increased consumption of mobile voice and mobile broadband services, as well by interconnection income, resulting overall in a 4 percent growth in revenue on an adjacent QoQ basis.

Malaysia Eyeing SL’s First Satellite with Surrey Satellite Technology Ltd (SSTL)

23rd December 2009, www.thebottomline.lk, By Santhush Fernando

The nation’s Telecommunication industry watchdog- Telecommunications Regulatory Commission of Sri Lanka (TRCSL), is considering ‘Expression of Interest’ by two Malaysian companies to partner Sri Lanka’s space communication programme.

Speaking to The Bottom Line, a high ranking TRCSL official said that Dialog Telekom’s parent company- Malaysia-based Axiata Group, along with Maxis Group, which bought a stake in Sri Lanka Telecom have expressed their intention in investing in the Rs 17 billion communication satellite project.

Completing the only necessity lacking to fulfil a superior technology system, Sri Lanka is now ready to step into the world of satellite communications, with TRCSL planning to establish the Sri Lanka Space Agency (SLASA) as a basic step towards acquiring satellite capability, upon becoming part of the Acquisition of National Satellite Capability. Through the SLASA, the satellite capability will be acquired from the Surrey satellite based in the University of Surrey, UK. SLASA plans to collaborate with ISRO of India, NASA of USA, JAXA of Japan and other space agencies throughout the world.

According to TRCSL Director General Priyantha Kariyapperuma, already, Asian countries such as South Korea and Malaysia, and even countries such as Nigeria have launched their own satellites.

British satellite specialist firm- Surrey Satellite Technology Ltd. (SSTL) is to advise the Sri Lankan government on the establishment of its national space programme, implemented under the SLASA.

SSTL has been contracted by TRCSL to develop its own space capability and its first communications satellite, SSTL announced on November 17. SSTL is a spin-off company of the University of Surrey, now fully owned by EADS Astrium that builds and operates small satellites. Its satellites began as amateur radio satellites- UoSAT (University of Surrey Satellite) and OSCAR (Orbital Satellite Carrying Amateur Radio) designation. SSTL cooperates with the University’s Surrey Space Centre, which does research into satellite and space topics.

Professor Sir Martin Sweeting of the University of Surrey and Executive Chairman of SSTL, have signed a landmark agreement. The economic benefits resulting from space based communications include Television, broadband services and earth observation applications are substantial and will positively contribute to the country’s development as a “high-tech” trading nation.

Under the Memorandum of Understanding (MOU), SSTL will provide an Earth observation capability and start work on a geostationary communications satellite. By partnering with SSTL for Earth observation, Sri Lanka will become an important member of the Disaster Monitoring Constellation (DMC), with the ability to participate in international disaster relief support activities coordinated by the United Nations, through the International Charter.

Maxis Group’s satellite division- MEASAT, launched the MEASAT-1 and MEASAT-2 communications satellites from Europe’s Spaceport in Kourou, French Guiana in 1996. The launch of MEASAT-1 and MEASAT-2 led to a rapid increase in Malaysian infrastructure development, both in telecommunication and broadcasting industries, including the launch of the first world’s digital Direct-To-Home (DTH) Multi-Channel TV Service, Astro. MEASAT became independent in 1998 and undertaking a reverse takeover of Malaysian Tobacco Company (MTC) in 2001, renaming the holding company MEASAT Global Berhad, and the operating Company MEASAT Satellite Systems Sdn Bhd, the company came of age.

Axiata, second largest mobile operator in Southeast Asia may bid for Millicom Assets in Cambodia and Sri Lanka

By Soraya Permatasari, 8th July 2009, Bloomberg

Axiata Group Bhd., Southeast Asia’s second-largest mobile-phone operator, is considering an offer for Millicom International Cellular SA’s assets in Cambodia and Sri Lanka, according to two people with knowledge of the matter.

The Kuala Lumpur-based company may bid as much as $500 million for Millicom’s stake in its Cambodian unit and $200 million for the Sri Lankan operations, one of two people with knowledge of the plan said yesterday, asking to not be identified because the discussions are private.

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