Dialog Axiata PLC · CSELK:DIAL.N0000
Dialog Axiata — H1 2006 Earnings Presentation
28 slides from Dialog Axiata's earnings presentation, 2006
Slide 1: Investor Forum First-half 2006
Investor Forum First-half 2006
Slide 2: Agenda
Agenda Highlights Highlights Financials Subsidiary Performance Key Performance Indicators Updates
Slide 3: Highlights – 1H2006
Highlights – 1H2006 Key Financials Units Six months ended 30 June 2006 2006 2005 Group Company Company Revenue Rs.Mn 12,280 12,031 8,138 EBITDA Rs.Mn 6,596 6,395 4,538 Profit after Tax Rs.Mn 4,933 4,885 3,446 EPS Rs. 0.684 0.678 0.681 Key Financials Six months ended 30 June 2006 2006 2005 Group Comp
Slide 4: Highlights – 1H2006
Highlights – 1H2006 Subscriber Base Six months ended 30 June 2006 2005 Company Total New Additions (Net) 000s 439 382 As at 30 June 2006 2005 Total Active Subscriber Base 000s 2,562 1,757 Operational Results Six months ended 30 June 2006 2005 Company Blended ARPU Rs. 668 706 Annualised Churn % 12.38
Slide 5: Financials
Highlights Financials Financials Subsidiary Performance Key Performance Indicators Updates
Slide 6: P&L Highlights
P&L Highlights • Group 2Q06 results is after deduction of subsidiary’s exceptional cost items in 2Q06. (All figures in Rs. Mn. Three Months Ended 30 June Six Months Ended 30 June except for ratios) 2006 2006 2005 2006 2006 2005 Group Company Company Group Company Company Revenue 6,327 6,202 4,286 12
Slide 7: Revenue Growth
Revenue Growth • Steady growth in revenue– 48 per cent increase over 1H05 • Prepaid revenue becomes the dominant contributor to revenue with 40 per cent share • Termination revenue increased by 93 per cent • Non voice revenues continue to increase. SMS revenue accounts for approx. 6 per cent of tota
Slide 8: Revenue Drivers
Revenue Drivers +46% +11% • Market leadership with sustained growth Net Subscribers (‘000) 2,562 2,302 in subscribers ( 46 per cent YoY) 2,123 1,925 2,093 • Pre/post mix:82:18 1,757 1,840 1,682 1,505 • Coverage and Quality of Service 1,353 Improvements • Blended ARPU down 5 per cent with subscriber
Slide 9: Healthy EBITDA and PAT Margins
Healthy EBITDA and PAT Margins • The spill over effect from exceptional inbound roaming revenues in the aftermath of tsunami for 1Q05, have contributed to higher margins in the 1H05 when compared to 1H06. • The growth in contribution of the lower margin international termination revenue stream has a
Slide 10: Direct Costs
Direct Costs 40% • Direct costs relative to revenue has improved by 1 point relative to 35% 0.1% 0.1% 3.0% performance in the immediately 30% 4.6% preceding quarter – (1Q06). 25% Direct cost 37% 20% 35% 35% 34% 30% 15% 31.4% 27.2% 2,067 2,085 Rs. Mn 1,957 10% 1,651 1,274 5% 0% 1H05 1H06 2Q05 3Q05 4Q
Slide 11: Network Costs
Network Costs (All figures in Rs. Mn.) 1H05 % of Revenue 1H06 % of Revenue Net Revenue 8,138 12,031 Network Related Costs Lease Circuit Rental 167 2.1% 175 1.5% International Telecommunication Levy 208 2.6% 423 3.5% Telecom equipment depreciation 757 9.3% 1,113 9.2% International Origination Cost 19
Slide 12: Operating Costs
Operating Costs • Opex as a percentage of revenue improved by 1 percentage point over 1H05 30% (All figures in Rs. Mn.) 1H05 % 1H06 % Change % Selling Expenses 1,019 51 1,506 55 48 25% 2.00% 2.00% As a % of Revenue 13 13 20% Manpower 427 22 655 24 53 13.00% As a % of Revenue 5 5 15% 13.00% Maintenan
Slide 13: Selling Expenses
Selling Expenses • Selling Expenses maintained below 13 per cent of Revenue despite growth in Subscriber additions over 1H05 (All figures in Rs. Mn.) 1H05 % of Revenue 1H06 % of Revenue Net Revenue 8,138 12,031 Selling expenses: Sales Commission 562 6.91% 739 6.14% Advertising 159 1.96% 204 1.70% Sa
Slide 14: EBITDA Margin analysis
EBITDA Margin analysis • Direct Expense curtailment improved EBITDA compared to 1Q06. EBITDA Margin 1Q06 52.67% • Increased S&M activities in 2Q06. +2.10% Direct Expenses (@33.61%) Sales & Marketing(@12.86%) --0.71% 0.71% Other expenses (@10.18%) -0.45% EBITDA Margin 2Q06 53.61% @ denotes percentage
Slide 15: Balance Sheet
Balance Sheet (All figures in Rs. Mn.) 30 June 2006 31 Dec 2005 • Balance Sheet remains Group Company Company healthy. Non - current assets Property, plant and equipment 22,579 21,372 18,986 Intangible assets 1,676 455 348 • Net Assets per share have Investment in subsidiary 0 1,971 1,971 24,255 23,
Slide 16: Capex Trend
Capex Trend +30% +12% 674 • Continued investment in 517 541 575 600 Network Infrastructure - Rs 1.76 Bn in 2Q06 • Capex to intensify in 2H06 • Equal focus on coverage and 2Q05 3Q05 4Q05 1Q06 2Q06 capacity No. of Transmission sites 4,909 Capex (in Rs .Mn.) 1,967 1,756 1,661 1,103 533 1Q05 2Q05 3Q05 4
Slide 17: Cash Flow Highlights
Cash Flow Highlights • Strong cash flows. Net Cashflows from operating activities up 39 per cent compared to 1H05. Six Months ended 30 June ( All figures in Rs.Mn) 2006 2005 Company Net cash from operating activities 4,602 3,322 Net cash used in investing activities (3,749) (1,628) Net cash used in
Slide 18: Reconciliation of Cash generated from Operations
Reconciliation of Cash generated from Operations (All figures in Rs. Mn.) Six months ended 30 June 2006 2005 Company Profit before Tax 4,950 3,475 Adjustments for: Interest Expenses 128 69 Depreciation 1,185 896 Amortisation 77 84 Retirement Benefit Obligation 15 12 Other Adjustments* (1,648) (1,094
Slide 19: Lenders
Lenders • IFC – 1st capital repayment made in June 06. Facility Type Period Outstanding as at 30 (All figures in US $ Mn.) June 2006 USD SLR Total <12 months > 12 months Citi/Commercial Syndicated loan 4.20 16.80 21.00 2.02 7.65 9.67 Standard Chartered Bank - 25.00 25.00 - 24.06 24.06 International
Slide 20: Subsidiary Performance
Highlights Financials Subsidiary SubsidiaryPerformance Performance Key Performance Indicators Updates
Slide 21: Dialog Broadband Networks (Pvt) Ltd. (DBN)
Dialog Broadband Networks (Pvt) Ltd.(DBN) Revenue, EBITDA and PAT For 2Q06, DBN recorded a revenue of Rs.183.99 Mn which is line with the revenue recorded in 1Q06. The EBITDA for 2Q06 recorded at Rs. 103.53 Mn is down by Rs. 26.86 Mn relative to 1Q06. PAT for 2Q06 was a loss of Rs 5 Mn relativ
Slide 22: Key Performance Indicators
Highlights Financials Subsidiary Performance Key KeyPerformance PerformanceIndicators Indicators Updates
Slide 23: Earnings per Share
Earnings per Share Six months ended 30 June Description Units 2006 2005 Company Net Income Applicable to ordinary shares Rs. Mn 4,885 3,446 Par Value Rs. 1 10 Ordinary Shares at the beginning Mn 370 37 Issuance of shares during the period Mn 7,403 - Weighted average number of shares Ordinary Shares
Slide 24: KPIs
KPIs • Key ratios indicate Financial Flexibility above average return generation 31 Dec 2005 1H2006 Company Company Net tangible assets per share(Rs.) 2.32 2.65 Gearing Ratio (times) 0.37 0.33 Net Debt to EBITDA ratio (times) 0.36 0.42 Total Debt to equity (times) 0.58 0.50 Return on Equity (%) 41 5
Slide 25: Updates
Highlights Financials Subsidiary Performance Key Performance Indicators Updates Updates
Slide 26: Recent Key Initiatives & Developments
Recent Key Initiatives & Developments •To reward loyalty and promote Customer retention Kit 123 was launched. A Dialog KIT Customer can enjoy up to 3 minutes incoming free based on the number of years on the Dialog network •Launch of Star Call – An alternative for text messages in Sinhala and Tamil.
Slide 27: Corporate Governance
Corporate Governance •Appointment of Mr. Mohamed V. Muhsin, Former Vice President and Chief Information Officer (CIO) of the World Bank Group, as an Independent Non-Executive Director. •Continuing efforts to enhance internal controls over financial reporting as well as to improve quality of other ke
Slide 28: Thank you
Thank you TM TELEKOM