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Dialog consolidates YTD performance with a stable Q3

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Dialog Axiata PLC announced, Wednesday its consolidated financial results for the nine months ended 30th September 2020. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group concluded Q3 2020 with stable performance across Mobile, Fixed Line and International businesses despite multiple challenges stemming from the Covid 19 pandemic. Group Revenue recorded a growth of 5% on a Year-on-Year (“YoY”) basis to reach Rs30.5Bn for Q3 2020 mainly due to the recovery in Mobile Revenue. Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) reached Rs13.6Bn for Q3 2020 up 14% YoY driven by Revenue performance and diligent cost control initiatives. Group Net Profit After Tax (“NPAT”) reached Rs4.8Bn to record growth >100% YoY for Q3 2020 due to EBITDA performance and forex gain of Rs.188Mn relative to the forex loss of Rs1.0Bn in Q3 2019.

On a Year-to-Date (“YTD”) basis the Group performance remained moderate owing to free offers and challenges associated with Covid-19 dampening the performance in Q2 2020. The YTD Revenue impact from Covid-19 is estimated to be Rs4Bn led by Roaming, Enterprise, Television and Retail Mobile segments.

The Dialog Group recorded a consolidated revenue of Rs87.9Bn for the nine months ended 30th September 2020, demonstrating a growth of 1% YTD. On the back of cost control initiatives, Group EBITDA grew 4% YTD to reach Rs36.5Bn. The Group EBITDA Margin was accordingly recorded at 41.5% for the nine months ended 30th September 2020. Underpinned by stable EBITDA performance Group NPAT demonstrated a growth of 3% YTD to record Rs8.6Bn for the nine months ended 30th September 2020.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs13.8Bn to the government of Sri Lanka (“GoSL”) during the nine months ended 30th September 2020. Total Public remittances included Direct Taxes and Levies amounting to Rs4.1Bn and Rs9.7Bn in Consumption Taxes collected on behalf of the GoSL.

Group capital investment for the first nine months of 2020 was recorded at Rs12.0Bn representing a capex to revenue ratio of 14%. Capital expenditure was directed in the main towards continued investments in transforming Dialog into a digital telco, by digitising all spheres of the organisation and to further strengthen the Group’s leadership in Sri Lanka’s mobile and home Broadband sectors. Group Operating Free Cash Flow (“OFCF”) has recorded at Rs21.5Bn for the first nine months of 2020 up from Rs17.6Bn recorded for the corresponding period in 2019. Consequently, cash balance increased by Rs8.4Bn as compared to year end 2019 to record at Rs13.3Bn by end September 2020. Dialog Group continued to exhibit healthy and low geared balance sheet as the Net Debt to EBITDA ratio remained at 0.53 times as at 30th September 2020.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (69%) and Group EBITDA (75%). Company revenue was record at Rs21.1Bn for Q3 2020 and Rs60.6Bn for the first nine months of 2020 up 3% YoY albeit declining 2% YTD, mainly due to the Covid-19 related core Revenue slowdown.

Company EBITDA was recorded at Rs10.2Bn for Q3 2020 up 12% YoY while it reached Rs27.3Bn for the first nine months of 2020 representing an increase of 2% YTD. Downstream of EBITDA performance the Company NPAT was recorded at Rs4.6Bn for Q3 2020 and Rs9.0Bn for first nine months of 2020, increasing 5% YTD.

Dialog Television (“DTV”), continued its leadership position in the Digital Pay Television space with a subscriber growth of 11% YoY by end Q3 2020. DTV Revenue declined 3% YoY to reach Rs2.2Bn for Q3 2020 amid continued consumer wallet pressure. On a YTD basis revenue was down 1% to record Rs6.5Bn for nine months ended 30th September 2020, due to Covid-19 associated free services and slowdown in Q2 2020. Downstream of Revenue performance, DTV EBITDA recorded a decline of 9% YTD to reach Rs1.7Bn for the first nine months of 2020. Accordingly, DTV Net Loss increased to Rs845Mn for the nine months ended 30th September 2020 relative to a Net Loss of Rs335Mn for the corresponding period in 2019.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs8.0Bn for Q3 2020 up 10% YoY while the Revenue was recorded at Rs23.3Bn for the nine months ended 30th September 2020 up 13% YTD. DBN EBITDA recorded a growth of 11% YTD to reach Rs7.6Bn for the nine months ended 30th September 2020. NPAT reached to Rs626Mn up 8% YTD for the first nine months of 2020.

More details are available at the following links:

Dialog Axiata PLC direct weblink: https://www.dialog.lk/quarterly-reports

CSE direct weblink: https://www.cse.lk/home/company-info/DIAL.N0000/financial

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realme dares to leap into Sri Lankan youth market with cutting edge devices

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realme, the world’s fastest-growing smartphone brand, launched its products in Sri Lanka on the November 23. The virtual launch event took place with the participation of Chanux bro and realme Sri Lanka team where benchmark, trendsetting realme products were introduced to the Sri Lankan market.

The launch expands the reach of the fastest smartphone brand to reach 50 million product sales worldwide, to a brand new market with young users looking for the very best in technology and smart devices. Ranked among the Top 5 brands in over 13 markets globally in just two years of operation, realme is ranked seventh globally. Proclaiming it will ‘dare to leap’, realme identifies with young people who are willing to take a risk, and has launched four cutting edge products to the Sri Lanka market, set to exceed expectations.

realme 7 – sharper captures and cooler gaming with faster charges

realme 7 grabs the imagination of the youth with a 64MP Quad Camera with Sony IMX682 sensor for sharper captures, the World’s First MediaTek Helio G95 Gaming Processor for cool gaming and a 30W Dart Charge, taking just 26 mins to get 5000mAh battery 50% Charged. The sleek smartphone comes with a 6.5-inch 90Hz Ultra Smooth Display with a 16MP In-display Selfie Camera and Starry Mode.

The first smartphone to have passed TÜV Rheinland Smartphone Reliability, realme 7 is the first in segment smartphone with the Sony 64MP Quad Camera.

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President to inaugurate CCC Sri Lanka Economic Summit

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Sri Lanka’s foremost economic summit will be inaugurated by Chief Guest Gotabaya Rajapaksa, President of the Democratic Socialist Republic of Sri Lanka on December 1. The summit is themed “Roadmap for Take-off: Driving a People Centric Economic Revival”. The President will also deliver the inaugural address.

Mahinda Rajapaksa, Prime Minister of the Democratic Socialist Republic of Sri Lanka, will launch the second phase of the summit on December 2 and participate in the VVIP session focused on “Empowering Take-off: Efficient Government and Progressive State Enterprises.”

The Inaugural session on December 1, commencing at 8.30am will feature addresses by keynote speaker Nirmala Sitharaman, Minister of Finance and Corporate Affairs of the Republic of India and Guest of Honour Ajith Nivard Cabraal, State Minister of Money and Capital Markets and State Enterprise Reforms. Dr. Hans Wijayasuriya – chairman of the Ceylon Chamber of Commerce will deliver the welcome address.

The flagship summit will be held on a virtual format in compliance with health guidelines and will bring together key policymakers, business leaders as well as the input of top international thought leaders will come together to identify the steps in developing the pathway towards the accelerated and people centric revival of the country’s economy.

Participants may register for the entire two-day virtual summit, or pick the sessions of their choice, an opportunity offered for the first time. Registrations for the event are now open. For further information, please contact Niroshini on niroshini@chamber.lk or 0115588852; or Alikie on alikie@chamber.lk or 0115588805. (CCC)

 

 

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Central Bank’s policy rates decision to be driven by two options

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by Sanath Nanayakkare

The Central Bank will be reviewing its monetary policy stance on November 26. In this context, First Capital Research has put forward strong arguments both for and against an interest rate cut, in its Pre-Policy Analysis.

Making their argument against further relaxation in monetary policy First Capital said, “As a response to the measures taken by the government, private sector credit has improved to Rs. 87.4Bn in September while market liquidity reached Rs. 140 bn by 13th Nov indicating that there is surplus liquidity in the system. Moreover, the unemployment rate, which was at 5.7% in the 1Q2020 has declined to 5.4% in the second quarter. These indicators suggest that economic activity has remained steady without much deterioration in the 2Q. Except the GDP growth numbers, where the 2Q2020 figures are yet to be seen, other indicators are signifying a recovery, inquiring the need of further policy easing at the upcoming review”.

“In response to previous monetary easing measures implemented by CBSL, to bring down costs of borrowing of businesses and households, both market deposit and lending rates adjusted notably so far during the year. AWPR declined to historic lows in recent weeks, while banks’ lending rates also witnessed a downward adjustment in line with CBSL’s expectations. We believe that considering the recovery in the private credit and historic low levels in AWPR, there is no vital requirement for CBSL to provide a rate cut and to further bring down the market lending rates drastically”.

Their arguments for further relaxation in monetary policy was: “A thrust for development is the need of the current government. We estimate that Sri Lanka’s GDP would see its steepest contraction in history of -5.8% in 2020 following the unexpected contraction in 1Q GDP growth of -1.6% while 2Q GDP figures are yet to be seen. However, the government’s key drive is the development oriented economic growth which was spelt out through the budget 2021 as well. Accordingly, the government plans to reach 6% and above GDP growth during the next 5 years commencing from 2021. As we believe, a development-oriented budget coupled with further low interest rate environment can support the government’s medium-term goals. Therefore, the need to accelerate the GDP growth can be considered as a major factor favouring further policy easing at the upcoming review.”

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