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Enriching Sri Lankan Lives
an axiata company
Dialog Axiata PLC
Q3 2014 RESULTS
5th November 2014
Sri Lanka's Premier Connectivity Provider
Dialog Group Performance
Dialog Axiata Company Performance
Subsidiary Performance
2
Dialog Group Performance Highlights – Q3 2014
3
Group Revenue at Rs17.0bn up by 2% QoQ and 6% YTD
Group EBITDA at Rs5.5bn grew by 4% QoQ and 1% YTD driven by increase in revenue
Group PAT at Rs1.7bn increased by 2% QoQ on the back of growth in
EBITDA; while PAT improved by 13% YTD due to increase in EBITDA and favourable forex impact compared to YTD 13
Positive FCF of Rs1.1bn in Q3 14 for the third consecutive quarter, on the back of improved EBITDA
Group continues to maintain structurally strong balance sheet with Net Debt/EBITDA at 1.03x as at end of September 2014
Subsidiaries continue to consolidate performance
DBN - 18th consecutive quarter of positive EBITDA DTV - Strong revenue growth, YTD revenue up 29%
Subscriber Growth Parameters
Mobile subscriber base of 9.4Mn with 49k net adds during the quarter
Continuous growth in Pay TV subscribers to reach 410k as at end September 2014
Group Financial Summary
Q3 14 QoQ YTD 14 YTD
Revenue 17,022 2% 50,007 6%
EBITDA 5,452 4% 15,401 1%
PAT 1,694 2% 4,619 13%
EBITDA Margin 32.0% 0.5pp 30.8% -1.7pp
PAT Margin 10.0% 0.1pp 9.2% 0.5pp
ROIC 11.9% 0.8pp 10.1% -2.4pp
(All figures in Rs Mn)
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All key financial indicators improved on a QoQ and YTD basis YTD Profitability Growth on the back of higher EBITDA and favourable forex
impact compared to YTD 2013
16,125 16,301 16,331 16,654 17,022
46,997 50,007
-
10,0 00
20,0 00
30,0 00
40,0 00
50,0 00
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
Steady Increase in Revenue; up 2% QoQ and 6% YTD
Revenue (Rs Mn)
+2%
+6%
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Mobile continued to be the main contributor to Group revenue, grew by 3% QoQ and 11% YTD Voice revenue grew by 2% QoQ and 4% YTD Data revenue increased by 14% QoQ and 55% YTD
Declining termination revenue impacting International revenue; decline of 1% QoQ and 12% YTD
Television revenue grew by 29% YTD on the back of strong subscriber growth
Fixed Revenue increased by 4% QoQ and 6% YTD driven by growth in LTE and data & leased line revenues
+6%
Group PAT grew by 2% QoQ due to
improvement in EBITDA
YTD Group PAT improved on the back of growth in EBITDA and favourable forex impact compared to YTD 13
5,241 4,636 4,699 5,250 5,452
15280 15401
33% 28% 29% 32% 32%
33% 31%
0%
20%
40%
60%
80%
100 %
120 %
-
2,00 0
4,00 0
6,00 0
8,00 0
10,0 00
12,0 00
14,0 00
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
EBITDA EBITDA Margin
Improvement in Profitability underpinned by Growth in Revenue
Group EBITDA (Rs Mn) & Margin (%)
+4%
+4%
Group PAT (Rs Mn) & Margin (%)
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+1%
+2%
+10% +13%
Group EBITDA increased by 4% QoQ and 1% YTD driven by growth in revenue
1,533 1,116 1,269
1,657 1,694
4,078
4,619
10% 7% 8%
10% 10%
9% 9% 0%
5%
10%
15%
20%
25%
30%
35%
40%
-
500
1,00 0
1,50 0
2,00 0
2,50 0
3,00 0
3,50 0
4,00 0
4,50 0
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
PAT PAT Margin
Total Costs
Q3 Total Cost to revenue ratio reduced by 0.5pp, due to decline in bad
debt provision and marketing spend
Group maintains a structurally strong balance sheet with Net debt to EBITDA ratio at a modest level of 1.03x
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Financial Position (Rs Mn)
Total cost to revenue improved by 0.5ppts QoQ due to drop in bad debt provision resulting from focused collection efforts and lower marketing spend Growth in total cost on a YTD basis largely due to increase in marketing spend, network cost and YTD 13 being benefited by a VAT credit
% of Revenue Q3 13 Q2 14 Q3 14 YTD 13 YTD 14
Direct expenses 28.6% 27.0% 28.9% 28.8% 28.8%
Sales & Marketing 11.9% 13.0% 12.4% 12.3% 12.6%
Network costs 12.4% 12.3% 12.3% 12.3% 12.5%
Staff costs 8.4% 8.6% 8.4% 8.6% 8.6%
Bad debts 1.3% 2.6% 0.5% 1.1% 1.5%
Overheads 4.9% 5.0% 5.5% 4.4% 5.2%
Total Cost 67.5% 68.5% 68.0% 67.5% 69.2%
30 June 14 30 Sep 14
Cash & Cash Equivalents 4,936 7,268
Gross Debt * 27,576 27,584
Net Assets 40,273 42,045
Gross Debt / equity (x) 0.68 0.66
Gross Debt/ EBITDA (x) 1.39 1.34
Net Debt/ EBITDA (x) 1.20 1.03
* Gross debt excludes book overdraft balances
Q3 capex focused on investment in high speed broadband infrastructure to support the Group’s strategy to consolidate and grow its leadership in the data space
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Capex (Rs mn) and Capex Intensity (%)
Q3 2014 Capex of Rs4.0bn, capex intensity of 24%
4,577
7,758
3,160 2,485
4,022
13,466
9667
28%
48%
19% 15% 24% 29% 19%
0%
20%
40%
60%
80%
100 %
120 %
-
2,00 0
4,00 0
6,00 0
8,00 0
10,0 00
12,0 00
14,0 00
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
+62%
-12% -28%
Dialog Group Performance
Dialog Axiata Company Performance
Subsidiary Performance
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14,140 14,245 14,188 14,366 14,705
41,200 43,259
33% 29% 29% 33% 33% 33% 32%
12% 11% 10% 14% 13% 11% 13%
-5%
15%
35%
55%
75%
95%
115 %
135 %
155 %
-
5,00 0
10,0 00
15,0 00
20,0 00
25,0 00
30,0 00
35,0 00
40,0 00
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
Revenue - Rs Mn EBITDA margin PAT Margin
Dialog Axiata PLC (Company): Key Financial Highlights
Revenue grew 2% QoQ and 5% YTD, driven by growth in voice and data revenue EBITDA improved by 3% QoQ and 2% YTD underpinned by growth in revenue Increase in YTD PAT on the back of growth in EBITDA and foreign exchange gain in contrast to foreign exchange loss in 2013
10
+4%
+2%
+5%
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Mobile Subscriber Growth Continues – increase in MOUs & ARPUS QoQ
7,523 7,754 8,246 8,348 8,367
944 963
960 978 1,008 363 359
348 343 354
-
50
100
150
200
250
300
350
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Postpaid Subs Prepaid Subs Blended ARPUs
No of Subscribers’000
8,467 9,375
Total subs growth +0.5% qoq; +11% yoy
Postpaid subs growth +3% qoq; 7% yoy
Prepaid subs growth +0.2% qoq; +11% yoy
Prepaid segment driving the YoY subscriber growth of 11%
On a QoQ basis both MoUs and ARPUs increased by 3% in line with promotions launched to induce usage
14,140 14,245 14,188 14,366 14,705
41,200 43,259
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
Revenue Rs Mn +4%
+2%
+5%
Blended MoU & RPM (Rs)
161 158 151 147 151
2.29 2.30 2.33 2.36 2.38
1.50
1.70
1.90
2.10
2.30
2.50
2.70
2.90
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
-
20
40
60
80
100
120
140
160
Blended MOUs Blended RPM
Dialog Group Performance
Dialog Axiata Company Performance
Subsidiary Performance
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285 306 322 343 347
16 26 34
47 63
0
50
100
150
200
250
300
350
400
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14
Post paid Pre Paid
913 983 1,073 1,174 1,158
2,637
3,405
16% 22% 24% 21% 16% 17% 20%
-3% -29% 12% 8% 3% -1% 7%
-50%
0%
50%
100 %
150 %
200 %
250 %
300 %
-
500
1,00 0
1,50 0
2,00 0
2,50 0
3,00 0
3,50 0
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
Revenue - Rs Mn EBITDA margin PAT Margin
Dialog Television : Key Financial Highlights
301 410
13
No of subscribers ’000
-1%
+27% Total subs growth +5% qoq; +36% yoy
Postpaid subs growth +1% qoq; +22% yoy
Prepaid subs growth +34% qoq; +286% yoy
+29%
Robust revenue growth of 29% YTD on the back of strong subscriber growth
Contraction of EBITDA QoQ due to increase in channel and installation costs; YTD EBITDA improvement driven by growth in revenue Decline in Q3 PAT due to lower EBITDA and higher depreciation whilst YTD PAT improvement driven by growth in revenue
1,458 1,458 1,468 1,491 1,544
4,359 4,502
24% 23% 17% 17% 26%
28% 20% -13% -14% -21% -23% -17%
-6% -21%
-50%
0%
50%
100 %
150 %
200 %
-
500
1,00 0
1,50 0
2,00 0
2,50 0
3,00 0
3,50 0
4,00 0
4,50 0
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 YTD 13 YTD 14
Revenue - Rs Mn EBITDA margin PAT Margin
Dialog Broadband Networks : Key Financial Highlights
Revenue increased 4% QoQ and 3% YTD, driven by data and leased lines revenues and growth in LTE take up YTD EBITDA impacted by the absence of VAT credit which was fully claimed in 1H 13 Decrease in YTD PAT driven by decline in EBITDA and increase in depreciation stemming from Fixed 4G LTE related investments
14
+4%
+6% +3%
Thank You
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