One of the country’s leading telecom operators, Dialog Axiata PLC, experienced a positive third quarter from July-September (3Q17) compared to the same period last year amidst increased revenue and the decline of indirect taxes on data services.
The group net profit for 3Q17 increased 31.36 percent year-on-year (YoY) to Rs.3.21 billion, with earnings per share increasing to Rs.0.46 from Rs.0.35 YoY. The group’s latest acquisition, Colombo Finance Trust PLC, had minimal impact on the group’s profitability.
Revenue increased 11.35 percent YoY to Rs.24.22 billion while direct costs increased 14.16 percent YoY to Rs.12.73 billion.
“The quarter featured the removal of 10 percent Telco Levy for mobile and fixed data services, with effect from September 1, 2017. The effective indirect tax on data services reduced from 31.7 percent to 19.7 percent and in line with this reduction, all licensed telecommunications operators extended a further 10 percent data bonus in support of the government’s directive to lower taxes,” Dialog said.
Higher administrative costs for the quarter were contained with lower distribution and finance costs.
Dialog’s net assets per share increased to Rs.7.19 at end-3Q17, compared to Rs.6.63 at the start of the financial year.
The asset base increased to Rs.137.50 billion from Rs.133.18 billion, as the group acquired Colombo Finance Trust PLC during the quarter to enter into mainstream financial services.
“Dialog aims to bring together the realms of advanced digital connectivity and cutting-edge financial technology (fintech) to deliver a revolutionary suite of products and services, which will expand the vistas of financial inclusion in Sri Lanka,” the firm further added in its earnings release.
Meanwhile, the short-term borrowings of the group increased to Rs.10.03 billion from Rs.7.87 billion between 3Q17 and the start of the financial year.
The nine-month period saw Dialog’s revenue fall 2.27 percent YoY to Rs.7.61 billion. The earnings per share fell to Rs.0.93 from Rs.0.96 YoY.
Dialog said that the profits for this period were impacted by the increase in depreciation, net finance cost and non-cash translational foreign exchange losses.
Revenue for the period increased 8.48 percent YoY to Rs.69.39 billion, while the direct costs increased 9.29 percent YoY to Rs.36.72 billion.
For the nine-month period, the mobile operation revenue increased 7.26 percent YoY to Rs.57.35 billion, while the operating profits fell 8.87 percent YoY to Rs.9.62 billion.
In the fixed telephony and broadband business of Dialog, a new product offering in the form of pre-paid fixed home broadband was introduced to increase the affordability of the service for the Sri Lankan households, while this segment’s operating profits increased to Rs.1.54 billion from Rs.32.48 million YoY, while revenue increased 29.12 percent YoY to Rs.7.65 billion.
In the television operations of Dialog, the operating losses increased 19.11 percent YoY to Rs.393.90 million, while revenue fell 3.98 percent YoY to Rs.4.39 billion.
“Dialog Television (DTV) continued to consolidate its leadership position in the digital pay television space with the subscriber base growing 17 percent year-to-date to exceed 926,000 as at end-September 2017,” Dialog said.
Malaysia’s Axiata Group owns 83.32 percent of shares in Dialog. The second largest shareholder is the state-controlled Employees’ Provident Fund with a 2.22 percent stake, while Norges Bank owns a 1.28 percent stake in the telecom giant.
Source: http://www.dailymirror.lk/article/Dialog-Axiata-Q-net-profit-up-to-Rs-bn-140050.html