Dialog Axiata PLC Sri Lanka's Premier Connectivity Provider

Transcription

1 Dialog Axiata PLC Sri Lanka's Premier Connectivity Provider Q an axiata company

2 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 2

3 Dialog Group Performance Highlights Q Dialog Posts 5% YoY Revenue Increase in First Quarter; Growth Decelerated due to Taxation (VAT) Group Continued to Deliver YoY Growth across Mobile, Tele-Infrastructure and Fixed Businesses Q Group Revenue at Rs22.2Bn, grew 5% YoY Q Group EBITDA at Rs7.2Bn, grew 3% YoY; Group EBITDA Margin at 32.6% Q Group PAT declined 42% YoY to reach Rs1.5Bn Q was Impacted by Adverse Externalities as Consumer Spending Continued to be Restrained by Increased Consumption Taxes on Communication Services since 1 st November 2016 Q1 Group Revenue declined by 3% QoQ Q1 Group EBITDA declined by 3% QoQ Q1 Group PAT grew by 24% QoQ Majority of Investments focused towards Broadband and Data Services Q Capex of Rs4.0Bn up 36% YoY; Q1 Capex Intensity of 18% All Business Units Continued to Capture Market Share and Delivered Strong Growth Dialog Mobile continued to grow Subscriber Market Share and Data adoption Data Growth of 42% YoY Dialog Broadband Networks (DBN) Q1 PAT Turned Positive (Rs237Mn) Dialog Television (DTV) EBITDA growth of over 100% YoY Aggressive Subscriber Growth Mobile subscriber base of over 12.2Mn up 16% YoY TV subscriber base of over 866k up 24% YoY Awards and Recognition Brand Finance of UK recognised Dialog Brand as the #2 most valuable Brand (Valued at Rs34Bn) in Sri Lanka with a AAA- rating Dialog s ez cash was recognized as Sri Lanka s #1 e-commerce Brand SLIM-Nielsen People's Awards 2017, Dialog was Awarded The Telecom Service Provider of the Year (sixth successive year) and The Internet Service Provider of the Year (fifth successive year) 3

4 Group Financial Summary 5% Growth in Revenue, 28% Increase in Tax Remittances (YoY) Rs Mn 1Q 17 QoQ YoY Revenue 22,165-3% 5% EBITDA 7,221-3% 3% PAT 1,546 24% -42% PAT (Norm) 1 1,811 1% -34% EBITDA Margin 32.6% 0pp -0.6pp PAT Margin 1 8.2% 0.3pp -4.7pp ROIC 11.9% -3.5pp -5.4pp YoY :Revenue and EBITDA Improved by 5% and 3% respectively while PAT declined due to increase in depreciation, net finance cost and unrealised forex losses QoQ :Except PAT, All Key Performance Indicators declined impacted by increased consumption taxes due to implementation of VAT that resulted in indirect taxes on all communication services and pay television increasing to 49.7% from 27.6% and tax on Broadband/Data increasing to 31.7% from 12.2% 1 Normalised for non-cash translational foreign exchange losses 4

5 Key Impacts from Externalities in Q VAT impacted Consumer Spend and Revenue Linked Cost Customer spending in Q continued to be affected by the introduction of Value Added Tax on communication services spanning Mobile, Fixed, Broadband and Pay Television effective 1 st November 2016 Revenue across all business segments continued to be under pressure with constrained growth rates Q1 Net Impact of VAT is estimated at negative Rs96mn compared to a positive impact of Rs118mn in Q4 due to Q1 having 3 months of VAT impact compared with 2 months for Q4 16 and Q4 benefited from seasonality Impact of VAT 1 Q Q QoQ On Revenue (724) (347) (377) On revenue linked costs (150) (94) (56) Input VAT Claim Net Impact (96) 118 (214) International Termination revenue continued to decline driven by the substitution by OTT Sri Lankan Rupee Depreciated against USD by 1.5% in Q1 vs Q4 16 and by 5% Compared to Q1 2016: Q1 PAT was impacted by non-cash translational foreign exchange loss of Rs264Mn 1 bracket denotes the negative impact 5

6 QoQ Group Revenue Reduced by 3% due to Drop in Mobile Voice, VAS, Pay TV and International Services Despite the Moderate Growth in Data and Tele-Infra Revenue Declined 3% QoQ as Taxation and Other Externalities Pare Revenue Growth +5% -3% 22,165 22,775 21,157 Q Revenue contracted 3% QoQ as consumer spending was restrained by increased consumption taxes on communication services spanning Mobile, Fixed, Broadband and Pay Television Mobile Voice and VAS declined 2% and 7% QoQ Mobile Data Revenue growth contined at 4% QoQ and 42% YoY International Revenue declined 8% QoQ and 25% YoY due to increase in Smartphone penetration and increased consumption taxes continue to accelerate shift to OTT services Fixed Revenue grew by 7% QoQ on the back of strong growth in LTE Home Broadband Television revenue declined 1% QoQ 6

7 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,000 2,400 1,800 1, % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Q1 EBITDA Declined 3% on the back of Lower Revenue while PAT Grew 24% QoQ Driven by Lower Non-Cash Translational Forex Losses; EBITDA Margin Stable EBITDA Contracted by 2.7% QoQ on the back of Decline in Revenue +3% PAT Improved by 24% QoQ; YoY Decline in PAT led by Higher Depreciation and Finance Cost -42% -3% 7,221 7,422 7, % 2, % 32.6% 33.2% 35.0% 1, % 1, % 12.6% EBITDA EBITDA Margin 25.0% PAT PAT Margin Prudent Cost Management Enabled to Control EBITDA Dilution Driven by Contraction in Revenue Total Cost Q1 17 Rs14,944Mn As % of revenue 67.4% Q4 16 Rs15,353Mn As % of revenue 67.4% Q1 16 Rs14,138Mn As % of revenue 66.8% QoQ -3% YoY 6% Direct Expenses 26.6% 27.8% 29.9% -7% -7% Sales & Marketing 15.2% 15.0% 13.7% -1% 17% Network Cost* 13.5% 12.9% 12.2% 2% 16% Staff Cost 8.3% 8.1% 7.8% 0.3% 11% Overheads 3.1% 2.2% 2.2% 30% 49% Bad Debt 0.7% 1.4% 1.0% -51% -29% 7

8 Dialog Contributed Rs10.5Bn to Government Revenue in Q1 2017, Up 28% YoY Dialog Group remitted a total of Rs10.5Bn to GoSL during the three months ended 31 st March Total remittances included direct taxes and levies as well as consumption taxes collected on behalf of the GoSL Payments to GoSL Up 28% In Rs Mn Q Q % Direct Taxes, Fees & Levies 3,631 4, Consumption Taxes collected on behalf of GoSL 6,898 4, Telco Levy 3,449 3, VAT 1, >100 Total 10,529 8,

9 12, ,0 00 8,00 0 6,00 0 4,00 0 2,00 0-3,000 2,000 1,000 - (1,000) (2,000) (3,000) (4,000) (5,000) (6,000) 15% 10% 5% 0% -5% -10% -15% -20% -25% Focused Capex Investments to Further Strengthen the Group s Leadership in Sri Lanka s ICT Sector. Capex Intensity 18%, OFCF Rs1.4Bn Q Capex of Rs4.0Bn, Up 36% YoY; Capex Intensity of 18% OFCF Improved to Rs1.4Bn in Q1; YoY Decline of 44% Driven by Higher Capex +36% -62% -44% +131% 10,431 1,429 6% 2,560 12% Capex Intensity 3,994 2,942 18% 46% 14% Q1 17 Q4 16-4,644-20% Q1 16 OFCF As % of revenue Q1 17 Capex of Rs4.0Bn directed mainly towards investments in High-Speed Broadband infrastructure consisting of capacity upgrades and LTE focused coverage expansion Investment in Data Infrastructure includes: 3G Capacity and Coverage Expansion 4G capacity upgrades and coverage expansion *Capex excluding CPE (Customer Premises Equipment) investments, capex for spectrum acquisition and license renewal 9

10 Structurally Strong Balance Sheet Demonstrates the Group s Financial Strength with Net Debt to EBITDA at 1.0x 31 Mar Dec Mar 16 Gross Debt 33,041 32,562 31,540 Net Debt 28,919 26,152 21,799 Cash and Cash Equivalents 4,123 6,410 9,741 Gross Debt / Equity (x) Gross Debt/ EBITDA (x) Net Debt/ EBITDA (x) Group continued to maintain a strong balance sheet, with Net Debt to EBITDA at 1.0x Demonstrates the Group s financial strength and capacity to drive business growth via timely and aggressive investments 10

11 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 11

12 20, , , , , , , , , , , 000 6,0 00 5,0 00 4,0 00 3,0 00 2,0 00 1,0 00 Dialog Axiata PLC (Company) Revenue Growth Decelerated due to VAT; Profitability Impacted by Revenue Drop and Forex Revenue Declined 4% QoQ while Grew 2% YoY driven by Data 42% and Device Sales (100%) +2% -4% QoQ Profitability Impacted by Contraction in Revenue EBITDA -9% PAT -43% EBITDA -8% PAT -12% 18,333 19,043 17,972 5,734 6,202 6,283 1,739 1,977 3,028 EBITDA PAT EBITDA Margin % 31.3% 32.6% 35.0% PAT Margin % 9.5% 10.4% 16.9% QoQ Revenue impacted by contraction in Voice, VAS and moderated growth in Data Revenue due to restrained consumer spending while International Termination Revenue continued to drop. Strong growth in Data (42%) and Device (>100%) Revenues driving YoY growth of 2% EBITDA declined 9% YoY on the back of moderate revenue growth and increased cost arising from expansion of network and IT capabilities. PAT declined 43% YoY driven by negative EBITDA performance coupled with higher Depreciation, net finance cost and unrealised forex losses EBITDA and PAT contracted by 8% and 12% QoQ respectively on the back of decline in Revenue 12

13 12, , 000 8,0 00 6,0 00 4,0 00 2, % 8% 3% -3% -8% Dialog Continues to Capture Market Share; Mobile Subscriber Base, Up 4% QoQ and 16% YoY. ARPU Impacted (5% Drop) due to VAT Growth in Prepaid Segment Underpins Subscriber Growth ARPU and MOUs Declined as Increased Consumption Tax Constrained Customer Spending (in 000s) Total subs growth +4% QoQ; +16% YoY Postpaid subs growth +1% QoQ; +8% YoY Prepaid subs growth +4% QoQ; +17% YoY 10,590 10,957* 11,313 11,825 12,268 1,166 1,187* 1,209 1,253 1,260 9,424 9,770 10,103 10,572 11,008 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Postpaid Subs Prepaid Subs 1,600 1,400 1,200 1, * ,115 1,176 1,160 1,171 1,088 4% 4% 0% -3% -5% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 ARPU PrP ARPU PoP Blended MOU Blended ARPU Growth *Restated 13

14 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 14

15 1,8 00 1,7 00 1,6 00 1,5 00 1,4 00 1,3 00 1,2 00 1,1 00 1, Dialog Television Subscriber Growth Momentum Continues; Profitability Impacted by VAT and Forex Revenue Declined 1% QoQ due to VAT; However, Subscription Revenue Grew 3% YoY QoQ EBITDA Impacted by Expansion in Foreign Currency Denominated Input Cost -5% -1% EBITDA +108% PAT -71% EBITDA -12% PAT -4% 1,498 1,508 1, Prepaid Subscriber Base Continued to Register Strong Growth of 8% QoQ EBITDA PAT EBITDA Margin % 4.3% 4.9% 2.0% PAT Margin % -20.8% -19.8% -11.5% (in 000s) 701 Total subs growth +3% QoQ; +24% YoY Postpaid subs growth -1% QoQ; -2% YoY Prepaid subs growth +8% QoQ; +66% YoY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Post paid 791 Pre Paid DTV Revenue declined 5% YoY led by drop in connection fee revenue due to change in accounting for Prepaid CPE sales; Normalised Revenue grew 4% YoY Q EBITDA improved 108% YoY and contracted 12% QoQ DTV PAT declined 71% YoY driven by increases in depreciation and net finance cost 15

16 Dialog Broadband Networks Fixed Business Revenue Growth Underpinned by LTE Home Broadband on the back of Network Coverage Enhancements and Aggressive Subscriber Acquisition 3,0 00 2,8 00 2,6 00 2,4 00 2,2 00 2,0 00 1,8 00 1,6 00 1,4 00 1,2 00 1,0 00 1,4 50 1,2 50 1, Fixed Revenue Improvement Driven by LTE DBN s PAT Turned Positive on the back of Strong Revenue Growth +39% +14% EBITDA : +100% PAT : +299% EBITDA : +23% PAT : +173% 2,912 2,563 2,095 1,500 1, LTE PoP Coverage* 50% 49% 43% EBITDA PAT EBITDA Margin % 51.5% 47.7% 35.8% PAT Margin % 8.1% -12.6% -5.7% Strong growth in Fixed LTE Revenue driving YoY and QoQ Revenue improvement Q1 EBITDA improvement driven by strong growth in Revenue On the back of healthy EBITDA performance, DBN PAT registered a net profit of Rs237Mn for Q *LTE PoP Coverage has been restated 16

17 Thank You 17