Dialog Axiata PLC · CSELK:DIAL.N0000
Dialog Axiata — Dialog Telekom — FY2007 Earnings Presentation
40 slides from Dialog Axiata's earnings presentation, 2008
Slide 1: Investor Forum
Investor Forum Year Ended 31 December 2007
Slide 2: Financials
oe Dialog TELEKOM
Slide 3: Snapshot – 2007 – Company
Snapshot –2007– Company Change YoY Growth CELLULAR SUBSCRIBERS 4.26 Mn. 1.15 Mn. 37% Change Growth KEY FINANCIALS USD Mn Rs Bn. (2007 vs. 2006) (2007 vs. 2006) NP of Rs. 4,868 Mn. REVENUE 281 31 Rs. 5,980Mn. 24% EBITDA 130 14 Rs. 967Mn. 7% PAT 92 10 Rs.78Mn. 1% ^Exchange rates applied for Rupee Conv
Slide 4: Snapshot – 2007 – Group
Snapshot –2007 – Group Change Growth KEY FINANCIALS USD Mn Rs Bn. (2007 vs. 2006) (2007 Vs 2006) Revenue 294 33 Rs. 6,838 Mn. 27% EBITDA 124 14 (Rs. 4 Mn.) 0.03% PAT 81 9 (Rs. 1,152 Mn.) 11% ^Exchange rates applied for Rupee Conversion are the annual monthly average rates as announced by Central Ban
Slide 5: Strong Revenue Growth Despite Externalities
Strong Revenue Growth Despite Externalities Revenue growth of 27% recorded despite several revenue lines being suppressed due to Macro-Environmental factors: Intermittent disruption of the company’s services in the Northern and Eastern Provinces of Sri Lanka during the first half of 2007 Reduc
Slide 6: Impact of Macro Economy
Impact of Macro Economy Administrative expenses sensitive to the escalation of general inflation. Inflation increased to approx 20% in 2007. Rising crude oil prices *CCPI movement (Source:Central Bank of Sri Lanka)
Slide 7: Impact of Macro Economy
in 2007. weakening of SLR. Adverse impacts from Average Interest rates increased by approx 400 bps 02 /0 06 1 /0 24 /20 2 8 1 /2 95 100 105 110 115 /0 06 /0 0 0 0 5 10 15 20 25 Impact of Macro Economy 20 2 /2 2 8 2 /2 6 /0 00 /0 0 0 4 6 14 /20 2 3 4 /2 6 /0 06 /0 0 0 08 6 /2 1 8 6 /2 6 /0 00 /0
Slide 8: Proposed Dividend to Shareholders
Proposed Dividend to Shareholders The Board of Directors of Dialog Telekom, has resolved to propose a first and final Dividend amounting to 44% (payout) of 2007 earnings, which translates to 55 Cents per share and is subject to the approval of the shareholders at the Annual General Meeting (AGM).
Slide 9: Investments in Infrastructure
Investments in Infrastructure Aggressive investments in infrastructure and matching performance in capital project implementation. Group-wide Infrastructure Investments in 2007 totalled Rs. 25 Bn (237 million USD) fuelling growth in Network Capacity and Reach of GSM, 3G/HSPA, WiMax, CDMA, Digita
Slide 10: Affordability Enhancement
Affordability Enhancement Dialog Telekom announced an aggressive tariff reduction with a view to expanding the market space and capturing an increasing proportion of incremental subscribers, through the enhancement of the affordability of its services. Enhancement of affordability was also deliver
Slide 11: 4.26 million mobile subscribers growth
4.26 million mobile subscribers NP of Rs. 4,868 Mn. 37% growth
Slide 12: P&L Highlights
P&L Highlights (All figures in Rs.Mn. GROUP COMPANY except for ratios) 2007 2006 Change(%) 2007 2006 Change(%) Net Revenue* 32,517 25,679 27 31,129 25,149 24 Direct Costs 13,403 8,822 52 11,882 8,536 39 Gross Profit 19,114 16,858 13 19,248 16,613 16 Gross Margin (%) 59 66 62 66 OPEX 9,851 6,130 61 8
Slide 13: Highlights: 2007 - Company
Highlights : 2007 - Company SUBSCRIBER BASE SUBSCRIBER BASE UNITS 2007 2006 UNITS 1-3Q 07 1-3Q 06 Postpaid 000 569 484 Prepaid 000 3,690 2,621 Total active subscriber base 000 4,260 3,106 Total net additions 000 1154 982 OPERATIONAL RESULTS UNITS 2007 2006 Blended ARPU Rs. 590 661 Prepaid ARPU Rs. 4
Slide 14: Revenue Drivers
Revenue Drivers Subscriber (Thousands) +37% +7% 4, 260 3, 963 • Market leadership with sustained 3, 365 3, 656 growth in subscribers ( 37 per cent 3, 106 3,441 3,690 YoY) 2,879 3,137 2,621 • Pre/post mix: 87:13 9% 7% • Coverage and Quality of Service 7% 7% 6% Improvements coupled with Introduction o
Slide 15: Revenue – Company
Revenue – Company • Steady growth in revenue– 22 per cent increase over 4Q06 • Prepaid revenue- the dominant contributor to revenue with 48 per cent share • Value Added Services account for approx. 10 per cent of total revenue for 2007. Revenue (Rs. Mn.) Revenue Composition (Rs. Mn.) +22% 1,677 933
Slide 16: Direct Costs - Company
Direct Costs - Company • Direct costs Performance relative to revenue is mitigated in the main due to the company not achieving its full revenue potential due to the revenue mitigating factors cited previously, and a relative expansion in costs during the latter half of 2007 arising from the macro e
Slide 17: Network Costs – Company
Network Costs – Company (all figures in Rs. Mn.) 2006 % of Revenue 2007 % of Revenue Net Revenue 25,149 31,129 Network Related Costs Lease Circuit Rental 329 1.31 311 1.00 International Telecommunication Levy 861 3.42 1,279 4.11 Telecom equipment depreciation 2,431 9.67 3,418 10.98 International Ori
Slide 18: Costs Analysis – Direct Expenses
Costs Analysis –Direct Expenses Costs affected by Costs influenced by Costs influenced Direct costs 2007 2006 YoY % rise in energy prices General Inflation/ by business currency devaluation expansion Netw ork maintenance 994,120,393 548,741,876 81 As a % of revenue 3.19 2.18 International Originatio
Slide 19: Operating Costs - Company
Operating Costs - Company • Opex as a percentage of revenue increased by 5 percentage points in 2007 vis-à-vis 2006. • In addition to inflationary pressure on principal cost lines, performance relative to revenue is mitigated due to the company not achieving its full revenue potential due to the rev
Slide 20: Costs Analysis – Administration expenses
Costs Analysis –Administration expenses Costs affected by Costs influenced by Costs influenced Adm ininstration expenses 2007 2006 YoY % rise in energy prices General Inflation by expansion Electricity 198,554,603 96,527,927 106 As a % of revenue 0.64 0.38 Travel and Fuel 338,556,464 150,895,801 124
Slide 21: Selling Expenses - Company
Selling Expenses - Company • Selling Expenses as a percentage of revenue has improved by 1 percentage point. despite 37 per cent growth in subscribers YoY % of % of (all figures in Rs. Mn.) 2006 2007 Change % Revenue Revenue Net Revenue 25,149 31,129 Selling expenses: Sales Commission 1,360 5.4 1,32
Slide 22: PAT and EBITDA Margins - Company
PAT and EBITDA Margins - Company • PAT /EBITDA performance in 2007 vis-à-vis 2006 has been mitigated due to inflationary pressure on principal cost lines and costs associated to operational expansions. PAT (Rs. Mn.) EBITDA (Rs. Mn.) 39% 54% 35% 35% 33% 50% 50% 47% 26% 37% 2,565 2,688 2,729 2,590 2,1
Slide 23: Balance Sheet
Balance Sheet • Net Asset per share of the Company has increased by 105% 31 December 2007 31 December 2006 (all figures in Rupees '000) Group Company Group Company ASSETS Non - current assets 54,337,744 49,527,591 33,634,237 31,329,629 Current assets 17,387,769 20,379,238 9,791,731 10,466,449 Total
Slide 24: Cash Flow Highlights - Company
Cash Flow Highlights - Company (all figures in Rs. Mn.) 2007 2006 Net cash from operating activities 16,324 12,046 Net Cash Flows from Net cash used in investing activities (25,168) (13,004) operating activities up Net cash used in financing activities 12,668 (3,429) 36% Increase/(decrease) in cash
Slide 25: Reconciliation of Cash Generated from Operations
Reconciliation of Cash Generated from Operations - Company (all figures in Rs. Mn.) 2007 2006 Profit before Tax 10,172 10,105 Adjustments for: Interest Expenses 638 387 Depreciation 3,607 2,597 Amortisation 391 190 Retirement Benefit Obligation 101 30 Other Adjustments* 1,936 (861) (incl. Changes in
Slide 26: KPIs - Company
KPIs - Company • Net Debt/ EBITDA has reduced mainly due to increase in cash position and reduction in debt following settlement of several commercial borrowing facilities in the third – quarter of 2007. • RoE diluted due to increase in shareholders funds following the equity issue. RATIOS Units 31
Slide 27: Earnings Per Share
Earnings Per Share DESCRIPTION UNITS 2007 2006 Net income applicable to ordinary shares* Rs. Mn. 8,906 10,119 Weighted average number of shares, end of period** Mn. 7,720 7,344 EPS Rs. 1.15 1.38 * Earnings for 2007 adjusted for preference dividend **Adjusted for effects of rights issue and ESOS shar
Slide 28: Lenders - Company
Lenders - Company Summary of Outstanding borrowings Institutions Type of Facility Currency Facilities Amt Principal Outstanding Less than one year More than one year USD Mn eqv. USD Mn eqv. USD Mn eqv. USD Mn. eqv. IFC Term Loan USD 70.00 25 - 25 DFCC Term Loan LKR 9.07 7.16 2.31 4.85 Total 79.07 32
Slide 29: Subsidiary Performance
TELEKOM po Subsidiary Performance TM Dialog
Slide 30: Dialog Broadband Networks (Pvt) Ltd. [DBN]
Dialog Broadband Networks (Pvt) Ltd. [DBN] Revenue of Rs. 1052.28 Mn up 36% relative to Rs. 774.6 Mn. recorded for the year ended 31 December 2006 . Net loss of Rs. 317.96 Mn. for year ended 31 December 2007 vis-à-vis a profit of Rs. 152.92 Mn recorded for the year ended 31 December 2006. The
Slide 31: Dialog Television (Pvt) Ltd.
Dialog Television (Pvt) Ltd. DTV Group (inclusive of subsidiaries Communiq Broadband Network (Pvt) Ltd (CBN) and CBN SAT (Pvt) Ltd) recorded a revenue of Rs. 722.45 Mn for year ended 31 December 2007 The company recorded a net loss of Rs. 788.53 Mn. during year ended 31 December 2007. In January
Slide 32: Product / CSR Updates
TELEKOM po Product /CSR Updates TM Dialog
Slide 33: Sri Lanka's Widest and Largest 3G Experience
Sri Lanka’s Widest and Largest 3G Experience Widest 3G coverage with > 450 Base Stations Largest 3G Roaming Network with > 40 operators in 26 countries Best call rates with 3G SuperLine Affordable HSPA Terminals and Handsets
Slide 34: Comprehensive Portfolio of 3G applications
Comprehensive Portfolio of 3G applications Business Applications Video Conferencing Video Surveillance Local & IDD Video Call Mobile Broadband with HSPA Customer support via Video Call Centre Personal Applications Video Sharing & Social Networking Mobile TV on MyTV Best call rate
Slide 35: 3G Applications
3G Applications
Slide 36: Broadband Services
Broadband Services HSPA Down Link speeds upto 14.4Mbps & Uplink Speeds upto 1.9Mbps HSPA speeds available on all data plans Speeds upto 10Mbps on WIMAX (Up/down Link) HSPA Facts HSPA stands for high speed pocket access. HSPA is a data service supported on 3G network. HSPA is capable of deliver
Slide 37: Fixed Wireless Service - CDMA
Fixed Wireless Service -CDMA The CDMA fixed wireless service was commercially launched through out the country. DBN acquired 21,167 CDMA subscribers with in the last quarter of 2007. Pre/ post CDMA mix: 69:31 The CDMA fixed wireless service commercially launched in July 2007 now covers over
Slide 38: DTV Portfolio Highlights - Affordability Enhancement
DTV Portfolio Highlights- Affordability Enhancement Dialog TV introduced Citi Hitz, Sri Lanka’s uninterrupted Sinhala movie and tele-drama channel and channel TBO. Dialog TV subscriber base: in excess of 50,000 DTV now offers over 20 SET Plans. SET Plans scheme is designed to provide subscribers
Slide 39: CSR
CSR The Company in collaboration with the School for the Deaf and Blind launched the Ratmalana Audiology Centre – an early Diagnostic Centre for the hearing impaired. The Company’s Distance Learning Network established in collaboration with the Ministry of Education also saw a rapid expansion wit
Slide 40: Thank you
TELEKOM TM Dialog