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* Dialog posts FY 2020 revenue growth of 3%
Sat, Feb 20, 2021, 11:10 am SL Time, ColomboPage News Desk, Sri Lanka.

• YTD Revenue Growth at +3%, EBITDA Growth at +9% and NPAT at +12%
• Recommended Dividend: 50% of Earnings, 74 Cents per Share
• Rs. 6.0 billion in Direct Taxes, Fees and Levies to GoSL: (Further Rs. 12.8 billion in Indirect Taxes Rs.12.8 billion)
• Rs. 28.8 billion in High Speed Broadband and other Infrastructure Investments
• Rs. 7 billion+ in Consumer Concessions during Lockdown Periods
• Rs..200Mn+ Investment Towards Upgrade of Sri Lanka’s Critical Health Infrastructure

Feb 20, Colombo: Dialog Axiata PLC announced its consolidated financial results for the year ended 31st December 2020. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group concluded the Financial Year (“FY”) with stable performance, across all business segments viz. Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses.

The achievement of stable financial performance not-withstanding the exceptional challenges of the Covid-19 pandemic was founded on the deployment of a range of strategic and operation levers on the backdrop of a supportive policy framework and stable Macro Environment enabled by the Government.

Group consolidated revenue was recorded at Rs.120.1 billion for FY 2020, demonstrating a moderate growth of 3% Year-to-Date (“YTD”) despite the advent of Covid-19 and the resultant spells of lockdown during the year which led to an estimated top line impact of circa Rs.5 billion. However, the Group revenue for Q4 2020 recorded more appreciable growth on a Year-on-Year (“YoY”) and Quarter-on-Quarter (“QoQ”) basis at 9% and 6% respectively to reach Rs.32.2 billion.

On the back of Revenue performance and diligent cost control initiatives, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew 9% YTD to reach Rs.50.9 billion for FY 2020 while Group EBITDA was recorded at Rs.14.3 billion for Q4 2020, up 23% YoY. On a QoQ basis Group EBITDA recorded a modest growth of 5% resultant of high contribution from revenue partially mitigated by higher bad debts, provisioned based on SLFRS rules, and higher marketing related spending. Accordingly, the Group EBITDA margin was recorded at 42.3% FY 2020 up 2.4pp YTD.

The Group Net Profit After Tax (“NPAT”) demonstrated a growth of 12% YTD to record at Rs.12.0 billion for FY 2020 underpinned by strong EBITDA performance and contraction in finance cost partially offset by forex losses amounting to Rs.0.8 billion. Group NPAT reached Rs.3.4 billion for Q4 2020 up 42% YoY albeit declining by 28% QoQ stemming from increased depreciation charge of Rs.0.9 billion recognized during the quarter resulting from a revision in the estimation of useful life of telecommunications network equipment during the quarter.

In line with the financial performance of the Group and taking into account the forward investment requirements to serve the nation’s demand for Telecommunication and Digital services, the Board of Directors of Dialog Axiata PLC at its meeting held on 19th February 2021, resolved to propose for consideration by the Shareholders of the Company, a cash dividend to ordinary shareholders amounting to 74 cents (Rs.. 0.74) per share. The said dividend, if approved by shareholders, would translate to a payout ratio of 50% of consolidated Group NPAT for FY 2020 resulting in a Dividend Yield of 6.0%. The dividend so proposed will be considered for approval by the shareholders at the Annual General Meeting (AGM) of the Company, the date pertaining to which would be notified in due course.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs.18.8 billion to the GoSL during the financial year ended 31st December 2020. Total remittances included Direct Taxes and Levies amounting to Rs.6.0 billion and Rs.12.8 billion in Consumption Taxes collected on behalf of the GoSL.

The Group capital expenditure for the year ended 31st December 2020 reached Rs.28.8 billion, resulting in a Capex to Revenue ratio of 24%. Capital expenditure was directed towards investments in High-Speed broadband infrastructure to further expand the Group’s leadership in Sri Lanka’s Broadband sector.

Accordingly, the Group recorded Operating Free Cash Flow (“OFCF”) of Rs.18.2 billion for FY 2020. Group Net Debt to EBITDA ratio remained healthy at 0.47 times as at end of 2020.

During the quarter Dialog Axiata PLC acquired 100% shareholding in H One (Private) Limited, through Dialog Broadband Networks (Private) Limited (“DBN”), a fully owned subsidiary of Dialog. H One is the leading Microsoft services provider in Sri Lanka delivering innovative solutions to many top corporates in the country. The acquisition of H One would further strengthen Dialog’s expansive suite of enterprise solutions and would facilitate acceleration of the digital transformation of Sri Lanka’s Enterprise Sector.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (69%) and Group EBITDA (74%). Company revenue remained stable YTD to record at Rs.82.4 billion for FY 2020 despite the Covid-19 associated topline impact as alluded to earlier. On a YoY and QoQ basis revenue recorded growth of 6% and 4% respectively to reach Rs.21.8 billion for Q4 2020. The Company EBITDA was recorded at Rs.37.7 billion for FY 2020 representing an increase of 6% YTD and it reached Rs.10.5 billion for Q4 2020 up 19% YoY and 3% QoQ underpinned by strong cost management initiatives. Downstream of EBITDA performance, the Company NPAT was recorded at Rs.11.7 billion for FY 2020 up 1% YTD. NPAT reached Rs.2.7 billion for Q4 2020 declining 9% YoY and 41% QoQ.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with a subscriber growth of 12% YoY for the year ended 31st December 2020. DTV revenue remained stable on YTD basis to record at Rs.8.7 billion despite the Covid-19 associated slowdown and free offers leading to an estimated impact of Rs.0.8 billion albeit on a YoY and QoQ basis revenue recorded a growth of 1% and 3% respectively to reach Rs.2.3 billion for Q4 2020. Driven by cost management initiatives, DTV EBITDA recorded a growth of 3% YTD to reach Rs.2.5 billion for FY 2020. However, DTV Net Loss increased to Rs.912Mn for FY 2020 relative to a Net Loss of Rs.541Mn recorded in FY 2019.

DBN featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs.32.2 billion for FY 2020 up 14% YTD, mainly due to the increase in Home Broadband and wholesale business revenues, while on a YoY and QoQ basis revenue grew 19% and 12% respectively to reach Rs.8.9 billion for Q4 2020. DBN EBITDA recorded a growth of 20% YTD to reach Rs.11.0 billion for FY 2020. Accordingly, NPAT was recorded at Rs.1.7 billion for FY 2020 up from Rs.0.4 billion recorded in FY 2019.

 

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