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Dialog posts revenue growth of 3% for FY 2020

22 Feb 2021

Dialog Axiata PLC announced its consolidated financial results for the year ended 31 December 2020 (FY 2020), including those of Dialog Axiata PLC (the Company) and of the Dialog Axiata Group (the Group).  The Group stated it saw stable performance across all business segments over FY 2020, viz. Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses, despite the challenges posed by the Covid-19 pandemic, on the backdrop of a supportive policy framework and stable macro environment enabled by the Government.  Group consolidated revenue stood at Rs. 120.1 billion for FY 2020, demonstrating a moderate Year-to-Date (YTD) growth of 3%, despite the advent of Covid-19 and the 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.  Group Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew 9% YTD to reach Rs. 50.9 billion for FY 2020, while Group EBITDA stood at Rs. 14.3 billion for Q4 2020, up 23% YoY.  On a QoQ basis, Group EBITDA recorded a modest growth of 5%. Accordingly, the Group EBITDA margin was recorded at 42.3% for FY 2020, up 2.4 percentage points YTD. Group Net Profit After Tax (NPAT) saw a growth of 12% YTD to record Rs. 12.0 billion for FY 2020, 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 an increased depreciation charge of Rs. 0.9 billion recognised during the quarter.  The Board of Directors of Dialog Axiata PLC, at its meeting held on 19 February 2021, resolved to propose for consideration by the shareholders, a cash dividend to ordinary shareholders amounting to Rs. 0.74 per share.  The said dividend, if approved, 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 will be considered for shareholder approval at the Company’s Annual General Meeting (AGM), the date pertaining to which would be notified in due course. Dialog Group stated it remitted a total of Rs. 18.8 billion to the Government over FY 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 Government. The Group capital expenditure for the year ended 31 December 2020 reached Rs. 28.8 billion, resulting in a Capex-to-Revenue ratio of 24%.  The Group recorded an 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-2020. During the quarter, Dialog Axiata PLC acquired 100% shareholding in H One (Pvt.) Ltd., through Dialog Broadband Networks (Pvt.) Ltd. (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 is expected to further strengthen Dialog’s 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 continued to contribute a major share of Group Revenue (69%), and Group EBITDA (74%).  Company revenue remained stable YTD to record Rs. 82.4 billion for FY 2020. Revenue saw a growth of 6% YoY, and 4% QoQ, to reach Rs. 21.8 billion for Q4 2020. Company EBITDA was recorded at Rs. 37.7 billion for FY 2020, an increase of 6% YTD, and reached Rs. 10.5 billion for Q4 2020, up 19% YoY and 3% QoQ. 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.  Meanwhile, Dialog Television (DTV) noted a subscriber growth of 12% YoY for FY 2020. DTV revenue remained stable on a YTD basis to record Rs. 8.7 billion, despite the Covid-19 associated slowdown and free offers leading to an estimated impact of Rs. 0.8 billion, while on a YoY and QoQ basis, revenue recorded growth of 1% and 3%, respectively, to reach Rs. 2.3 billion for Q4 2020. DTV’s EBITDA recorded a growth of 3% YTD to reach Rs. 2.5 billion for FY 2020. However, DTV’s Net Loss increased to Rs. 912 million for FY 2020, relative to a Net Loss of Rs. 541 million 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 recorded an EBITDA 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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