Dialog Axiata PLC · CSELK:DIAL.N0000
Dialog Axiata — Dialog Telekom — Q1 2007 Earnings Presentation
39 slides from Dialog Axiata's earnings presentation, 2007
Slide 1: Investor Forum First Quarter 2007
Investor Forum First Quarter 2007 Page 1
Slide 2: Agenda
Agenda Financials Financials Subsidiary / SBU Performance Rights and RCRPS
Slide 3: Snapshot – 1Q 2007 - Company
Snapshot –1Q 2007 - Company Key Financials Change QoQ Growth PAT US $24 Mn. Rs. 2.56 Bn. Rs.254 Mn. 11% EBITDA US $ 33 Mn. Rs.3.63 Bn. Rs. 556 Mn. 18% Revenue US $ 67 Mn. Rs. 7.24 Bn. Rs. 1,411 Mn. 24% Cellular subscribers 3.37 Mn. 1.06 Mn. 46% ^Exchange rates applied for Rupee Conversion are the an
Slide 4: New Business – Strategic Focus
New Business – Strategic Focus Strategic intent of securing Future growth and Earnings via convergent technology related business lines will materialize in the medium term through the new business line seeded within DTL subsidiaries : Dialog Broadband Networks (DBN)- currently engaged in the bui
Slide 5: Snapshot – 1Q 2007 – Group
Snapshot –1Q 2007 – Group Dialog Telekom NP of Rs. 2,565 Mn Dialog NP of Rs. 10 Mn. Broadband Asset Media Net loss of Rs 134 Mn. Dialog Group NP of Rs. 2,426 Mn Key Financials Change QoQ Growth PAT US $ 22 Mn. Rs. 2.43 Bn. Rs. 30 Mn. 1% EBITDA US $ 33 Mn. Rs. 3.55 Bn. Rs. 354 Mn. 11% Revenue US $ 69
Slide 6: Highlights
Highlights Key Financials Units 1Q-07 1Q-06 1Q-07 1Q-06 Group Company Revenue Rs.Mn 7,506 5,953 7,240 5,829 EBITDA Rs.Mn 3,555 3,201 3,626 3,070 Profit after Tax Rs.Mn 2,426 2,397 2,565 2,311 EPS Rs. 0.34 0.33 0.35 0.32 Key Financials Units 1Q-07 1Q-06 1Q-07 1Q-06 Group Company Revenue US$ Mn 69 58
Slide 7: P&L Highlights
P&L Highlights (all figures in Rs. Mn. Group Company except for ratios) Three Months ended 31 March Three Months ended 31 March 2007 2006 Change (%) 2007 2006 Change (%) Net Revenue* 7,506 5,953 26 7,240 5,829 24 Direct Costs 2,926 2,081 41 2,661 2,067 29 Gross Profit 4,581 3,872 18 4,579 3,762 22 G
Slide 8: Group Capex - Aggressive network implementation programme
Group Capex- Aggressive network implementation programme During 1Q07, total outlay on Capex amounted Rs. 6.52 Bn. an increase of Rs. 4.54 Bn compared to 1Q06. ¾ 3G enabled BTS sites increased by 60 per cent during the quarter. ¾ Fibre Optic Network – Colombo Ring approaching completion ¾ CDMA WLL en
Slide 9: Financials - Company Performance Overview
Financials Financials --Company CompanyPerformance PerformanceOverview Overview
Slide 10: Highlights – 1Q 2007 - Company
Highlights –1Q 2007 - Company Subscriber Base Units 1Q-07 1Q-06 Postpaid Thousands 486 462 Pre-paid Thousands 2,879 1,840 Total active subscriber base Thousands 3,365 2,302 Total Net Additions Thousands 259 178 Operational Results Units 1Q-07 1Q-06 Blended ARPU Rs. 609 712 Pre-paid ARPU Rs. 423 443
Slide 11: Revenue Drivers
Revenue Drivers Subscriber (Thousands) • Market leadership with sustained growth in +46% +8% subscribers ( 46 per cent YoY) • Pre/post mix: 86:14 Net Subscribers (‘000) 3,106 3,365 2,835 • Coverage and Quality of Service 2,562 2,879 2,302 2,621 Improvements. 2,359 2,093 • Increase in Blended ARPU Qo
Slide 12: Revenue Environment
Revenue Environment Revenue Mitigating Macro-Environmental Factors: Intermittent disruptions of the company’s services in the Northern and Eastern Provinces of Sri Lanka – markets which previously contributed up to 7 per cent of company revenue Decline in inbound tourist arrivals closely corre
Slide 13: Revenue - Company
Revenue - Company • Steady growth in revenue– 24 per cent increase over 1Q06 achieved • Prepaid revenue- the dominant contributor to revenue with 48 per cent share – QoQ growth 50 percent • Termination revenue increased by 34 per cent. • Value Added Services account for approx. 10 per cent of total
Slide 14: Cost Environment
Cost Environment Network Maintenance cost increasing in step with aggressive deployments Network related costs related to operations in North-East being incurred not withstanding revenue mitigation. Selling Expenses Improved by 2% relative to revenue Administration expenses sensitive to the
Slide 15: Direct Costs - Company
Direct Costs - Company • Direct Costs increased by 2 percentage points (relative to revenue) in 1Q07 compared to performance in the 1Q06 . • The dip in performance relative to revenue is mainly attributable to the company not achieving its full revenue potential for the quarter due to uncontrollable
Slide 16: Network Costs - Company
Network Costs - Company (all figures in Rs. Mn.) 1Q-06 % of Revenue 1Q-07 % of Revenue Net Revenue 5,829 7,240 Network Related Costs Lease Circuit Rental 90 1.54 56 0.77 International Telecommunication Levy 201 3.46 277 3.83 Telecom equipment depreciation 532 9.12 728 10.06 International Origination
Slide 17: International Telecommunication Levy claim process
International Telecommunication Levy claim process In March 2007, TRCSL issued the procedure for disbursements from Telecommunications Development Fund (TDF). Accordingly Dialog would be entitle for 2/3 of VGF contribution (US 3.80 cents) amounting to US 2.54 cents per each international minute
Slide 18: Operating Costs - Company
Operating Costs - Company • Opex as a percentage of revenue maintained on sequential quarters, however has increased by 2 percentage points 1Q07 vis-à-vis 1Q06. (all figures in Rs. Mn.) 2005 % 2006 % (all figures in Rs. Mn.) 1Q-06 % 1Q-07 % Change % 51 51 Selling Expenses 708 54 747 42 6 30% As a %
Slide 19: Selling Expenses - Company
Selling Expenses - Company • Selling Expenses as a percentage of revenue has improved by 2 percentage points QoQ • Selling Expenses maintained close to 10 per cent of Revenue despite 46 per cent growth in subscribers YoY. (all figures in Rs. Mn.) 1Q-06 % of Revenue 1Q-07 % of Revenue Net Revenue 5,8
Slide 20: PAT and EBITDA Margins - Company
PAT and EBITDA Margins - Company • PAT and EBITDA margins declined 5 and 3 points each respectively in 1Q07 compared to 1Q06 due mainly to the impacts from: •Temporary closure of North East operations and •Higher finance costs on floating rate loans owing to the increase in the benchmark interest ra
Slide 21: Profitability Drivers – Financing Related
Profitability Drivers – Financing Related Movement in AWPLR Adverse escalations in benchmark 25.00% rates impacting the cost of floating 20.00% rate borrowings in the short term. 15.00% Q1 2007 Q1 2006 10.00% Negative impacts arising from 5.00% AWPLR increased by close to 500 bps weakening of th
Slide 22: Balance Sheet
Balance Sheet • Net Asset per share has improved by 11%. • Approximately Rs. 3 bn of CL will move to LTL in 2Q07 based on a Export Credit Agency backed refinancing of vendor credit to be executed in 2Q07. (all figures in Rupees Thousands) 31 March 2007 31 December 2006 Group Company Group Company AS
Slide 23: Cash Flow Highlights - Company
Cash Flow Highlights - Company • Strong cash flows. Net Cash flows from operating activities up 127 per cent compared to1Q-06. (all figures in Rs.Mn.) 1Q-07 1Q-06 Net cash from operating activities 5,124 2,258 Net cash used in investing activities (5,831) (1,993) Net cash used in financing activitie
Slide 24: Reconciliation of Cash Generated from Operations - Company
Reconciliation of Cash Generated from Operations - Company (all figures in Rs. Mn.) 1Q-07 1Q-06 Profit before Tax 2,585 2,341 Adjustments for: Interest Expenses 209 79 Depreciation 752 565 Amortisation 92 61 Retirement Benefit Obligation 8 7 Other Adjustments* 1,684 (748) (incl. Changes in WC, excha
Slide 25: KPIs - Company
KPIs - Company • Leverage ratios have improved indicating increased financial flexibility. Ratio Units 31-Mar 31-Dec 2007 2006 Net tangible assets per share Rs. 3.72 3.37 Gearing Ratio Times 0.31 0.33 Net Debt to EBITDA Times 0.70 0.74 Total Debt to equity Times 0.44 0.49 Return on Equity % 37.28 40
Slide 26: Earnings per Share - Company
Earnings per Share - Company • EPS increased 9 per cent to 35 cents per share. Description Units 1Q-07 1Q-06 Net Income Applicable to ordinary shares Rs. Mn. 2,565 2,311 Par Value Rs. 1/- 1/- Ordinary Shares at the beginning of period Mn. 7,403 37 Issuance of shares during the period Mn. - 7,366 Ord
Slide 27: Lenders - Company
Lenders - Company Summary of Outstanding borrowings Institutions Type of Facility Currency Facilities Amt Principal Outstanding Less than More than USD Mn eqv. USD Mn eqv. one year one year IFC Term Loan USD 15.00 12.50 2.50 10.00 Citi / Commercial Syndicated Loan USD 4.20 1.74 0.58 1.16 Citi / Comm
Slide 28: Subsidiary / SBU Performance
Financials Subsidiary Subsidiary//SBU SBUPerformance Performance Rights and RCRPS
Slide 29: International Business
International Business Contribution to DTL group bottom line - 10 per cent. 34% growth in International termination revenue International Fibre backbone through SMW3 and SMW4 Best in Class International Gateway infrastructure with Soft switching to handle growth in traffic volumes
Slide 30: Internet Business
Internet Business Introduction of Kitnet – A fast, convenient and affordable mode of Prepaid Internet access. Mobile internet access is exhibiting significant growth driven by the increasing penetration of GPRS and EDGE & 3G enabled handsets and devices. Increased adoption of mobile email and co
Slide 31: Dialog Broadband Networks (Pvt) Ltd.(DBN)
Dialog Broadband Networks (Pvt) Ltd.(DBN) DBN recorded a Revenue of Rs 207.61 Mn. up 12 per cent relative to Rs. 184.76 Mn. recorded for the first-quarter of 2006. On the backdrop of an aggressive network implementation programme, DBN recorded a Net profit of Rs. 10.39 Mn. for the first-quarter
Slide 32: Asset Media (Pvt) Ltd.
Asset Media (Pvt) Ltd. For the first-quarter of 2007, Asset Media Group recorded a revenue of Rs. 139.14 Mn., on the back of a 60% subscriber growth within the first quarter of operations. The Media operations is yet to breakeven and recorded an operating loss of Rs. 136Mn. for 1Q07, as characte
Slide 33: Performance Synopsis
Performance Synopsis Robust subscriber growth ARPU maintained/improved External Revenue mitigating factors impacting top line Some Uncontrollable Cost Dynamics Cost control measures required DBN – ready for commercial launch of CDMA based fixed WLL network. Asset Media in growth phase
Slide 34: Rights and RCRPS
Financials Subsidiary / SBU Performance Rights Rightsand andRCRPS RCRPS
Slide 35: Rights Issue and Rated Cumulative Redeemable Preference Share (RCRPS) Issue
Rights Issue and Rated Cumulative Redeemable Preference Share (RCRPS) Issue As announced on 20th April 2007, the Directors of DTL, resolved to propose to the company’s shareholders, the execution of a Rights Issue accompanied by a Rated Cumulative Redeemable Preference Shares (RCRPS) issue aimed a
Slide 36: Rights issue
Rights issue Equity investors invited to join the company at the growth phase of the new convergent business lines with the opportunity to enjoy payouts in the cash generating periods in the future The proposed rights issue will provide ordinary shareholders of the company with an entitlement to
Slide 37: Preference Share Issue 2007
Preference Share Issue 2007 •Type of Share Rated Cumulative Redeemable Preference Shares (RCRPS) •Tenor Five Years •No.of shares to be issued Up to 5 Billion Shares •Issue Proceeds Up to Rupees Five Billion (Rs. 5,000,000,000/-) •Purpose To part finance Dialog Group’s 3 year capex plan covering tran
Slide 38: Salient Features of RCRPS
Salient Features of RCRPS •Dividend Rate • Floating Rate based on Average Weighted Prime Lending Rate •AWPLR less Discount ≥ 65 bps •Discount determined via a Book build •Dividend Payment Frequency- Semi Annual •Annual Balloon Redemptions over Five Year Tenor Year Redemption Date Redemption Value pe
Slide 39: Thank you
Thank you @e TELEKOM