Nov 07, Colombo: Sri Lanka's premier connectivity provider, Dialog Axiata PLC announced its consolidated financial results for the nine months ended 30th September 2019. Financial results included those of Dialog Axiata PLC (the "Company") and of the Dialog Axiata Group (the "Group").
The Group continued its growth momentum across Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses to record a consolidated revenue of Rs. 87.2 billion for the nine months ended 30th September 2019, demonstrating strong growth of 8% Year-to-Date ("YTD").
Downstream of Revenue performance Group Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") grew 10% YTD to reach Rs. 35.0 billion. The adoption of SLFRS 16, 'Leases' with effect from 1 January 2019, translated to an EBITDA upliftment of Rs. 2.0 billion which is a 2.3pp increase in the EBITDA Margin reaching to 40.2% for nine months ended 30th September 2019.
Group Revenue remained flat on a Quarter-on-Quarter ("QoQ") basis to reach Rs. 29.1 billion for Q3 2019 mainly due to intense competition and gradual recovery in core revenues following Easter Sunday incident. Group EBITDA grew 8% QoQ to reach Rs. 11.9 billion for Q3 2019 driven by continued focus in cost efficiencies. On a YoY basis Revenue and EBITDA grew 4% and 7% respectively.
The Group Net Profit After Tax ("NPAT") demonstrated a growth of 13% YTD to record at Rs. 8.3 billion for the nine months ended 30th September 2019 underpinned by strong EBITDA performance. On a QoQ and YoY basis NPAT declined 26% and 14% respectively to record Rs. 1.5 billion for Q3 2019 mainly due to non-cash translational forex losses resulting from 3.0% depreciation of the Sri Lankan Rupee ("LKR") against the United States Dollar ("USD") for the quarter. Normalized for the said non-cash translational forex losses NPAT was up 19% QoQ albeit declining 29% YoY.
Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 25.5 billion to the Government of Sri Lanka ("GoSL") during the nine months ended 30th September 2019. Total Public remittances included Direct Taxes and Levies amounting to Rs. 7.9 billion and Rs. 17.6 billion in Consumption Taxes collected on behalf of the GoSL.
Group capital investment for the first nine months of 2019 was recorded at Rs. 13.9 billion representing a capex to revenue ratio of 16%. Capital investment was directed towards revenue generating capacity enhancements in High-Speed Broadband infrastructure to further strengthen the Group's position in Sri Lanka's Broadband sector. Group Operating Free Cash Flow ("OFCF") was recorded at Rs. 16.6 billion for the first nine months of 2019 up from Rs. 8.1 billion recorded for the corresponding period in 2018. Consequently, cash balance improved by Rs. 3.1 billion as compared to year end 2018. Dialog Group continued to exhibit a low geared balance sheet as the Net Debt to EBITDA ratio remained healthy at 0.79 times as at end of September 2019.
Further strengthening the offering in the enterprise space, Dialog launched FlexNet during the quarter, a Software Defined Networking (SDN) platform for Sri Lanka's enterprises. FlexNet provides a cloud-ready platform for businesses to manage their connectivity and networks. The grow-as-you-go business model provides flexibility to businesses to continuously monitor, manage and optimise their networks to ensure the best performance for investment.
At an entity level, Dialog Axiata PLC (the "Company") continued to contribute a major share of Group Revenue (71%) and Group EBITDA (76%). Company revenue declined 2% YTD to record at Rs. 62.1 billion for nine months ended September 2019 mainly due to the 70% YTD contraction in international wholesale revenue. Due to the externalities alluded to earlier the revenue declined 2% QoQ and 3% YoY to record at Rs. 20.5 billion for Q3 2019. Company EBITDA was recorded at Rs. 26.7 billion for the first nine months of 2019 representing an increase of 9% YTD. EBITDA was recorded at Rs. 9.1 billion for Q3 2019 up 9% QoQ and 4% YoY. The adoption of SLFRS 16 had a positive impact on the first nine months EBITDA performance of the Company resulting in an upliftment of Rs. 1.9 billion for nine months ended 30th September 2019. Downstream of EBITDA performance the Company NPAT was recorded at Rs. 8.7 billion for first nine months of 2019 up 25% YTD. NPAT reached Rs. 1.8 billion for Q3 2019 declining 11% QoQ albeit growing 4% YoY. Dialog Television ("DTV"), continued its leadership position in the Digital Pay Television space with a subscriber growth of 25% YoY by end Q3 2019. Underpinned by strong subscriber growth, DTV Revenue Public grew by 17% YTD to Rs. 6.5 billion for the nine months ended 30th September 2019 while revenue was recorded at Rs. 2.3 billion for Q3 2019 up 3% QoQ and 15% YoY. On the back of strong cost management focus, DTV EBITDA recorded a growth of 17% YTD to reach Rs. 1.8 billion for the first nine months of 2019. Accordingly, DTV Net Loss declined to Rs. 335million for the nine months ended 30th September 2019 relative to a Net Loss of Rs. 394million for the corresponding period in 2018.
Dialog Broadband Networks ("DBN") featuring the Group's Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs. 20.6 billion for the nine months ended 30th September 2019 up 76% YTD due to the transfer of wholesale business while on a QoQ and YoY basis revenue grew 9% and 60% respectively to reach Rs. 7.2 billion for Q3 2019. DBN EBITDA recorded a growth of 9% YTD to reach Rs. 6.9 billion for the nine months ended 30th September 2019 albeit NPAT declining to Rs. 579 million from Rs. 1.3 billion recorded for the corresponding period in 2018.