Saturday, May 8, 2010

Dialog Telecom Back to profits - Dialog consolidates performance with positive Q1

 Dialog Telekom PLC announced yesterday that it has consolidated performance with a positive first quarter.

Financial results included those of Dialog Telekom PLC (the "Company") and of the Dialog Telekom Group (the "Group") post consolidation with subsidiaries Dialog Broadband Networks (Pvt) Ltd. ("DBN") and Dialog Television (Pvt) Ltd. ("DTV").

Dialog Telekom consolidated on positive performance trends of previous quarters to record Net Profit After Tax (NPAT) of Rs. 1,276Mn. and Rs. 705Mn. for the quarter, at Company and Group level respectively, an improvement of 313% and 153% relative to Q1 2009. Company EBITDA grew by a significant 68% relative to Q1 2009 to reach Rs. 3,343Mn., signifying the 5th successive quarter of EBITDA growth and an improvement of 5% QoQ.

Accordingly the 1st Quarter exhibits an EBITDA margin of 37% for the Company, up 12% points YoY and 1% relative to Q4 2009.

Dialog continued to register positive gains in the mobile market during Q1, on the backdrop of aggressive competition. Company Revenue grew by a robust 15% YoY and 2% compared to Q4 2009. Revenue growth in Q1 was driven by the addition of 364,809 (net) new subscribers.

Accordingly the Company grew its subscriber base to 6.74 Mn. recording a 15% subscriber growth YoY and a 6% growth relative to Q4 2009.

Complementing positive revenue performance trajectories, the Company continued to demonstrate significant enhancements to its Operating Cost structure. Operating Costs (excluding depreciation) reduced by 13% and 2% relative to Q1 2009 and Q4 2009 respectively, signifying the quantum impact of strategic cost rescaling initiatives undertaken by the Company during previous quarters.

Operating cost improvements were driven primarily by reduction in operational overheads, administration, and manpower related expenses.

Direct cost (excluding depreciation) grew by 3% YoY and 6% QoQ. The increase in direct cost was driven in the main by termination and origination costs pertaining to International traffic in line with revenue growth accruing from the corresponding lines of business.

In line with growth at EBITDA level, NPAT was recorded at Rs. 1,276Mn., up 313% from a negative NPAT of Rs. 598Mn. in Q1 2009 and representing a 5% improvement QoQ. Strong EBITDA performance was supported by a 20% decrease in non-operating costs relative to Q1 2009. Non Operating cost reductions were driven by a 50% decrease in finance costs following the repayment of borrowings utilising surplus cash from operations. The 1st Quarter also evidenced foreign exchange translation gains of Rs. 106Mn. in contrast with an exchange loss of Rs. 286Mn. in Q1 2009.

Year on Year and Quarter on Quarter comparisons reported for the Company, Subsidiaries and Group performance, exclude non-recurring charges accounted in the corresponding quarters of the previous year (Q1 2009 and Q4 2009). Non-recurring charges for the Company and Group amounted to Rs. 520Mn. and Rs. 542Mn. respectively in Q1 2009, and Rs. 2.37Bn. and Rs. 2.99Mn. respectively in Q4 2009.

As in the case of Dialog Telekom PLC., the subsidiaries of the Company - DBN and DTV exhibited improved performance during the 1st Quarter relative to the corresponding period in 2009. DBN EBITDA recorded at negative Rs. 38Mn., improved by 55% YoY. DTV EBITDA was recorded at positive Rs. 26Mn. in Q1 2010, up 116% YoY. Both subsidiaries remained dilutive to the Group recording negative NPAT levels of Rs. 465Mn. and Rs. 94Mn. respectively.

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