Dialog Axiata PLC · CSELK:DIAL.N0000
Dialog Axiata — Dialog Telekom — FY2005 Earnings Presentation
34 slides from Dialog Axiata's earnings presentation, February 2006
Slide 1: Dialog Telekom
> > ATI Company
Slide 2: Highlights – 2005
Highlights -— 2005
Slide 3: Highlights 2005
Highlights 2005 Key Financials Revenue Rs 18,034 Mn EBITDA Rs 9,416 Mn Profit after Tax Rs 7,012 Mn EPS Rs 1.15 Subscriber Base Total New Additions 894k Post paid 237k Pre paid 657k Operational Results Postpaid Prepaid ARPU Rs. 1,654 Rs 452
Slide 4: Proposed Dividend
Proposed Dividend The Board of Directors of Dialog Telekom at its meeting held on 23 February 2006, has resolved to propose a first and final Dividend amounting to 40% (payout) of 2005 earnings, which translates to 38 Cents per share and is subject to the approval of the shareholders at the Annual
Slide 5: Investment in Infrastructure
Investment in Infrastructure The company view 2006 as an Year of aggressive infrastructure investment, with projected capital expenditure plans totaling to over USD 147M (Rs 15 Billion.) The Dialog Telekom Network is expected to grow by over 50% in all dimensions during the course of 2006. In
Slide 6: Acquisition of MTT Networks
Acquisition of MTT Networks MTT – an established Data/Broadband Service Provider Comprehensive Transmission Backbone PAT Positive Operation MTT Provides Dialog with a Portfolio of Licenses in the Fixed WLL, Broadband and Last Mile Segments Growth Opportunities Fixed WLL using CDMA 450
Slide 7: Leverage Strengths to Achieve Strategic Advantage through:
Leverage Strengths to Achieve Strategic Advantage through: 3G Deployment Aggressive 2.5G Growth – Coverage and Capacity Pioneering Investments in Broadband - Wireless and Fibre Strategic deployment of CDMA, Payphone and other rural communication solutions Aggressive Thrust in International
Slide 8: 2005 Key Achievements
2005 Key Achievements Subscriber base crossed 2 million in November 2005 PAT up 71% to Rs 7.01 Bn for fy2005 compared to fy2004 SAP implemented –largest and fastest implementation Partnership with Vodafone - would enhance the company’s capabilities in delivering world class mobile communicat
Slide 9: Financials – An Overview
Financials – An Overview FY ended 31 December 2005
Slide 10: Profit & Loss
Profit & Loss (All figures in Rs. Mn) Q4 04 Q4 05 2004 2005 Revenue 3,385 5,222 11,407 18,034 YoY Growth (%) 54% 58% Direct Costs 1,138 1,957 3,932 6,214 YoY Growth (%) 72% 58% Gross Profit 2,247 3,265 7,475 11,821 YoY Growth (%) 45% 58% Gross Margin (%) 66% 63% 66% 66% OPEX 1,179 1,311 3,152 4,557
Slide 11: Revenue Growth
Revenue Growth Revenue has grown at 58% during fy2005 compared to fy2004. 20,000 18,034 18,000 16,000 14,000 11,407 12,000 58% Rs Mn 10,000 8,000 6,000 5,222 3,385 4,000 54% 2,000 - 05 04 04 05 20 20 4 4 Q Q
Slide 12: Revenue Mix
Revenue Mix 2004 2005 Equipment , International Equipment , International Accessories + Termination Accessories + Termination other Revenue Revenue Revenue other Revenue International 6% 8% International 5% 8% Roaming Post-paid Roaming Post-paid Revenue Revenue Revenue Revenue 9% 40% 15% 37% Pre-pai
Slide 13: Revenue Mix
Revenue Mix Revenue Composition (Rs. Million) 2004 % 2005 % Change % Post-paid Revenue 4,224 37.0% 7,283 40.4% 72.4% International Roaming Revenue 1,703 14.9% 1,616 9.0% -5.1% Pre-paid Revenue 4,010 35.2% 6,593 36.6% 64.4% Equipment, Accessories+other Revenue 925 8.1% 1,178 6.5% 27.4% International
Slide 14: Direct Costs
Direct Costs Dialog has realised scale advantages to minimize the growth of direct costs. Direct Cost Breakdown 2004 % 2005 % Change % (All amount Network Related Costs 3,416 86.9% 5,408 87.0% 58% As a % of Revenue 29.9% 30.0% Customer Related Costs 494 12.6% 790 12.7% 60% As a % of Revenue 4.3% 4.4
Slide 15: International Telecom Operator Levy
International Telecom Operator Levy Imposed in March 2003 with the Liberalization of International Services via Special direction by the Minister of Telecommunications dated 21/ 02/03 Figures in US Cents 03/2003-03/2004 From 04/2004 Incoming Local Access Fee 7.20 5.20 Contribution to Vishva Gram
Slide 16: Direct Costs relative to Revenue
Direct Costs relative to Revenue •Total direct costs as a proportion of revenue has remained constant at 34% for 2004 and 2005. 35.00% 30.00% Network related 25.00% Customer related 20.00% Others 15.00% 10.00% 5.00% 0.00% 2004 2005
Slide 17: Operating Costs relative to Revenue
Operating Costs relative to Revenue Cost of Manpower maintained under 6% OPEX Breakdown 2004 % 2005 % Change % (All amounts in Rs. Million) Manpower 645 20.5% 962 21.1% 49.1% As a % of Revenue 5.7% 5.3% Maintenance 517 16.4% 765 16.8% 47.9% As a % of Revenue 4.5% 4.2% Energy & Fuel 106 3.4% 208 4.
Slide 18: Operating Costs relative to Revenue
Operating Costs relative to Revenue Opex as a proportion of revenue has improved from 28% in 2004 to 25% in 2005. 16.00% 14.00% Manpower 12.00% Maintenance 10.00% Energy & Fuel Material 8.00% Selling Expenses 6.00% Incidental 4.00% 2.00% 0.00% 2004 2005
Slide 19: EBITDA Growth
EBITDA Growth EBITDA has grown at 59% during fy2005 compared to fy2004 •EBITDA Margin remaining constant (in fy2005 and fy2004) at 52% 10,000 9,416 9,000 8,000 7,000 59% 5,917 6,000 Rs Mn 5,000 4,000 3,000 2,571 2,000 1,514 1,000 70% - 04 05 04 05 20 20 4 4 Q Q
Slide 20: PAT Growth
PAT Growth • Net Profit has grown at 71% to Rs 7.01 Billion for fy2005 from Rs 4.10 Billion compared to fy2004. • NP Margin has improved from 36% (in fy2004) to 39% (in fy2005) 8000 45% 39% 7012 40% 7000 36% 35% 6000 30% 5000 Rs. Mn. 4101 71% 25% 4000 Margin 20% 3000 15% 1865 2000 10% 956 95% 1000 5
Slide 21: Summary Balance Sheet
Summary Balance Sheet 31 December (all amounts in Rs. Million) 2005 2004 Fixed Assets 19,599 13,384 Intangible Assets 348 82 Investment in MTT 1,971 Cash and Bank 6,624 3,191 Net Working Capital excl cash (1,291) (1,019) Non Current Liabilities (75) (48) Bank Borrowings (9,975) (3,463) Net Assets 17
Slide 22: Capex Composition – Core & Non Core Assets
Capex Composition –(Core & Non Core Assets) Invested a further Rs 3.7 Billion in the mobile network infrastructure compared to previous year 9,000 1,215 8,000 7,000 6,000 (Rs Million) Operational capex 5,000 6,990 Netw ork related 4,000 664 3,000 2,000 3,267 1,000 - 2004 2005
Slide 23: Gearing Ratio as of 2005
Gearing Ratio as of 2005 37% Debt Equity 63%
Slide 24: Cash Flow Summary
Cash Flow Summary (All amounts in Rs Million) 2004 2005 Profit Before Tax 4,140 7,054 Adjustments for: Interest Cost 227 195 Depreciation 1,452 1,940 Amortisation 143 213 Retirement benefit obligation 19 28 Other Adjustments 1,171 (140) (incl exchange diff, Profit on sale of FA & Changes in WC) Cash
Slide 25: Lenders Cash position as of 31 December 2005
Lenders Outstanding as at Loan Amount 31st December 2005 All amounts in US$Mn Citi/Commercial Syndicated loan 21.00 11.15 Standard Chartered Bank 25.00 24.46 International Finance Corporation 30.00 15.00 HSBC 25.00 21.78 (An agreement was signed with IFC in ‘04 for a loan facility of US$30Mn, with a
Slide 26: Performance Indicators
Performance Indicators
Slide 27: Earnings per Share
Earnings per Share EPS Computation Rs (Mn) 2005 2004 PAT 7,012 4,101 Dividend on preference shares - (108) Net Income Applicable to ordinary shares 7,012 3,993 Par Value Rs 1/- Rs 10/- Ordinary Shares at the beginning(Mn) 370 37 Issuance of shares during the period(Mn) 7,403 - Weighted average numbe
Slide 28: Balance Sheet Indicators
Balance Sheet Indicators KPI 2005 2004 Net tangible assets per share(Rs.) 2.32 201.17 Gearing Ratio - % 37% 22% Debt to EBITDA ratio (times) 1.06 0.59 Return on Equity (%) 40.76% 47.07% Return on Capital Employed (%) 26.85% 26.86% Earnings per Share (Rs.) 1.15 0.98 Current Ratio (times) 1.69 1.48
Slide 29: Key Operational Indicators - Subscriber Breakdown
Key Operational Indicators - Subscriber Breakdown Pre paid subscriber base increased by 63% & post paid by 34% for fy2005 compared to fy2004. 2,000,000 1,800,000 1,600,000 1,400,000 1,682,361 1,200,000 1,000,000 1,029,856 800,000 1,505,203 600,000 1,178,355 1,336,990 400,000 200,000 361,025 403,200
Slide 30: Key Operational Indicators – Dialog Subscriber Growth
Key Operational Indicators – Dialog Subscriber Growth 2,500 Dialog Subscribers Dialog Growth 2,000 Subscribers '000 1,500 1,000 500 0 2000 2001 2002 2003 2004 2005
Slide 31: Key Operational Indicators – Dialog Subscriber Growth vs Industry
Key Operational Indicators – Dialog Subscriber Growth vs Industry 3,500 3,085 3,000 2,775 Subscribers' 000 2,493 2,500 2,124 2,124 2,012 1,925 2,000 1,740 1,539 1,500 1,359 Dialog Subscribers Market Subscribers 1,000 500 0 05 05 05 05 04 05 20 20 1 2 3 4 Q Q Q Q Q1 to Q3 - when the market grew @ 23.
Slide 32: Key Operational Indicators – ARPU (post & pre)
Key Operational Indicators –ARPU(post & pre) Pre & post paid ARPU have increased by 2.73% and 5.73% respectively. 1,800 1,600 1,400 1,200 Rs. 1,000 Post 800 Pre 600 400 200 - Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 2004 2005
Slide 33: PAT trend 2004 Vs 2005
PAT trend 2004 Vs 2005 8,000 7,000 Cumulative PAT (Rs Mn) 6,000 5,000 2005 4,000 2004 3,000 2,000 1,000 - Q1 Q2 Q3 Q4
Slide 34: Thank you
Thank you TM TELEKOM