Dialog Axiata PLC · CSELK:DIAL.N0000
Dialog Axiata — Dialog Telekom — H1 2008 Earnings Presentation
39 slides from Dialog Axiata's earnings presentation, 2008
Slide 1: Investor Forum First-Half 2008
Investor Forum First- Half 2008
Slide 2: Company Performance Review
e Dialog TELEKOM Company Performance Review TELEKOM
Slide 3: Snapshot – Company
Snapshot – Company Change YoY Growth % CELLULAR SUBSCRIBERS 4.81 Mn. 1.15 Mn. 31 KEY FINANCIALS (in Rs.Bn.) 1H-2008 1H-2007 Change % REVENUE 16.57 15.61 6 EBITDA 5.31 7.46 -29 PAT 2.16 5.25 -59 ^Exchange rates applied for Rupee Conversion are the average monthly rates published by Central Bank of SL
Slide 4: 4.81 million mobile subscribers, 31% growth
4.81 million. mobile subscribers 31% growth *as of 30 June 2008
Slide 5: Mobile: Strong growth in Mobile Subscribers
Mobile: Strong growth in Mobile Subscribers Market Share 1H FY08 Mobile Subscribers 31% Mobile Subscriber Market Share Mobile Subscribers ‘000 4,806 47% 3,656 53% 34% Dialog 14% Others 1H07 1H08 Postpaid Prepaid SUBSCRIBER BASE UNITS 1H-2008 1H-2007 Change % Postpaid 000 590 519 14 Prepaid 000 4,216
Slide 6: P&L Highlights
P&L Highlights (All figures in Rs.Mn. COMPANY except for ratios) 1H-2008 1H-2007 Change(%) Net Revenue* 16,566 15,607 6 Direct Costs 7,837 5,305 48 Gross Profit 8,729 10,302 (15) Gross Margin (%) 53 66 OPEX 6,243 4,588 36 EBITDA 5,312 7,457 (29) EBITDA Margin (%) 32 48 PBT 2,342 5,308 (56) PAT 2,156
Slide 7: Revenue Dynamics
Revenue Dynamics Revenue Drivers •Market Leadership with sustained growth in subscribers • Enhanced Portfolio of Value Added Services •Coverage and Quality of Service Improvements Revenue Mitigators •Tariff reduction and other affordability enhancement strategies • General Inflation and Pressures on
Slide 8: Revenue
Revenue • Revenue growth of 2 per cent on adjacent quarter basis. • Revenue growth of 5 per cent in 2Q 2008 compared to 2Q 2007. • Revenue growth was mitigated in the main due to tariff reductions and other affordability enhancement strategies adopted by the company during Q4 2007 on the backdrop of
Slide 9: Direct Costs
Direct Costs Direct costs Performance relative to revenue is mitigated mainly due to increases in frequency fees (317 per cent) telco depreciation (62 per cent) on the back drop of aggressive investment and other network costs in relation to site rentals (144 per cent), electricity charges( 83 per
Slide 10: Operating Costs
Operating Costs • Operating expenses as a percentage of revenue increased by 9 percentage points in 2Q 2008 vis-à-vis 2Q 2007. • In addition to inflationary pressure on principal cost lines, performance relative to revenue is mitigated due to escalation of energy driven costs. Operating costs as a %
Slide 11: Total Cost Profile
Total Cost Profile • Increase in network costs and telco depreciation as a % of total costs. • Manpower increased marginally as a % of total costs. 1H 2008 1H 2007 0.4% 0.6% Netw ork Related Costs 3.2% 6.0% 3.1% 5.1% 28.6% Telco Depreciation 3.5% 2.8% 26.4% Levies 11.8% 11.4% Customer Related Costs
Slide 12: EBITDA and PAT Margins
EBITDA and PAT Margins • EBITDA/PAT performance in 2Q 2008 vis-à-vis 2Q 2007 has been mitigated due to: • Cost expansion driven in the main by general inflation (28 % YoY), energy derived costs (46% YoY), and expansion of the company’s network infrastructure, with associated increases in Network rel
Slide 13: EBITDA Analysis: 2Q 08 vs 2Q 07
EBITDA Analysis :2Q 08 vs 2Q 07 (all figures in Rs Mn.) 3,831 2,554 Variance in revenue Variance 384 in Direct Variance cost in Opex (852) EBITDA (809) in 2Q 07 EBITDA in 2Q 08
Slide 14: PAT Analysis: 2Q 08 vs 2Q 07
PAT Analysis :2Q 08 vs 2Q 07 PAT in 2Q 07 Rs. 2,688 Mn. EBITDA variance Rs. 1,277 Mn. Negative Variance in Depreciation Rs. 574 Mn. Negative Variance in Finance cost, tax and other Rs. 39 Mn. Negative operating incom e Rs. 798 Mn. PAT in 2Q08
Slide 15: Balance Sheet
Balance Sheet 30th June 2008 31st December 2007 (all figures in Rupees '000) Company Company ASSETS Non Current Assets 56,622,722 49,527,591 Current Assets 20,044,105 20,379,238 Total Assets 76,666,827 69,906,829 EQUITY Capital and Reserves Attributable to Equity Holders of the Company Stated Capita
Slide 16: Cash Flow Highlights
Cash Flow Highlights • Operating Cash Flows was mitigated due to reduction in earnings and increase in receivables. • Cash used in Investing Activities increased by 61% YoY due to committed investments. Capex reassigned to priority areas. (all figures in Rs. Mn.) 1H-2008 1H-2007 Net cash from operat
Slide 17: Reconciliation of Cash Generated from Operations
Reconciliation of Cash Generated from Operations • Interest expenses have reduced by 34 per cent due in the main to prepayment of several commercial borrowing facilities during the third-quarter of 2007. (all figures in Rs. Mn.) 1H-2008 1H-2007 Profit before Tax 2,342 5,308 Adjustments for: Interest
Slide 18: Lenders as at 30 June 2008
Lenders as at 30 June 2008 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 50.00 - 50.00 DFCC Term Loan LKR 9.30 9.30 1.86 7.44
Slide 19: Debt KPIs as at 30 June 2008
Debt KPIs as at 30 June 2008 Gearing 29% Net Debt : EBITDA 1.66x EBIT : Net Interest 9x Expense Fitch Rating AAA (lka) *Debt includes bank borrowings and vendor financing.
Slide 20: Subsidiary Performance
TELEKOM Subsidiary Performance TELEKOM
Slide 21: CDMA 56% growth, WiMax 66% growth
CDMA subscribers 56% growth Wi Max subscribers 66% growth *growth compared against 1Q 2008
Slide 22: Dialog Broadband Networks (Pvt) Ltd. [DBN]
Dialog Broadband Networks (Pvt) Ltd. [DBN] Revenue of Rs. 1,181.84 Mn up 181 per cent relative to Rs. 420.96 Mn. recorded for the six months ended 30 June 2007 . DBN recorded a EBITDA of Rs. 51.36 Mn. for the six months ended 30 June 2008 vis-à-vis a figure of Rs.120.70 Mn recorded for the six m
Slide 23: Revenue Growth - DBN
Revenue Growth - DBN • DBN has delivered revenue growth of 181 per cent in 1H -2008 compared to 1H-2007 • DBN revenue components include Fixed Telephony (CDMA WLL), Data communication services, Transmission and Infrastructure Business, and Broadband and Internet services. DBN Revenue 20% DBN revenue
Slide 24: Revenue Drivers - DBN
Revenue Drivers - DBN • Pre / Post CDMA mix: 53:47 • The CDMA fixed wireless service commercially launched in July 2007 covers 20 districts including Colombo. •CDMA subscriber growth : 56 per cent on adjacent QoQ. •Wi Max subscriber growth : 66 per cent on adjacent QoQ. CDMA Subscribers Wim ax Subsc
Slide 25: Pay TV Subscribers 276% YoY growth
102,293 Pay TV Subscribers 276% YoY growth
Slide 26: 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. 787.66 Mn for the six months ended 30 June 2008 . •DTV EBITDA recorded at negative Rs. 30.78 Mn in Q2 2008 - a performance improvement of 84
Slide 27: Revenue Composition - DTV
Revenue Composition - DTV Revenue comprises of initial connection fees and monthly subscription rentals. Connection fee revenue represented 58 per cent of total revenue totaling to Rs. 456 Mn. The revenue generated from monthly subscription totaled Rs. 332 Mn. contributing to 42 per cent of tota
Slide 28: Group Performance
TELEKOM Group Performance TELEKOM
Slide 29: Performance Synopsis
Performance Synopsis Revenue Growth YoY- Dialog - 6% DBN - 181% DTV – 176% Subscriber Growth – Mobile - 31% YoY CDMA - 56% Adjacent QoQ Wi Max – 66% Adjacent QoQ Pay TV – 276% YoY
Slide 30: Snapshot – Group
Snapshot – Group While the Dialog Group has achieved a strong foothold in the multiple sectors of fixed line, broadband and pay television through an aggressive range of services commercialised during the course of 2007, the growth potential of the associated new businesses, is expected to be enha
Slide 31: P&L Highlights - Group
P&L Highlights -Group (All figures in Rs.Mn. GROUP except for ratios) 1H-2008 1H-2007 Change(%) Net Revenue* 18,269 16,137 13 Direct Costs 8,820 5,935 49 Gross Profit 9,449 10,202 (7) Gross Margin (%) 52 63 OPEX 7,338 4,845 51 EBITDA 5,334 7,237 (26) EBITDA Margin (%) 29 45 PBT 1,842 4,932 (63) PAT
Slide 32: Balance Sheet - Group
Balance Sheet - Group 30th June 2008 31st December 2007 (all figures in Rupees '000) Group Group ASSETS Non Current Assets 63,351,180 54,337,744 Current Assets 15,383,034 17,387,769 Total Assets 78,734,214 71,725,513 EQUITY Capital and Reserves Attributable to Equity Holders of the Company Stated Ca
Slide 33: Operational Updates
TELEKOM Operational Updates TELEKOM
Slide 34: New Products and Promotions in Q2
New Products and Promotions in Q2 Tariff campaigns KIT Double Family Package Blackberry Promotions Business Solutions 8700 Offer Corporate customer testimonials Mass Market Promotions Avurudu Vasi, Vodafone Handset offer at 3499/- Nokia low cost handset offer Magic SMS to attract d
Slide 35: Recent Developments
Recent Developments External Currency •The Central Environmental Authority (CEA) announced Devaluation recently an Environment Conservation Levy (ECL) of 2% on mobile usage, with effect from 15 August 2008. •A fixed levy has been imposed per telecom transmission tower with effect from 01 August 2008
Slide 36: DTV - news
DTV -news Channel Addition: NDTV Good Times NDTV Good Times is part of the NDTV Group & the channel was adjudged as the ‘Best Fashion & Lifestyle Channel’ at the INDY’s Awards, 2008. Its programming content concentrates on cuisine/ fine dining, Lifestyles, Technology, Fashion, Food, Travel, People,
Slide 37: Corporate Responsibility
Corporate Responsibility More than 10,000 articles of M-waste collected Dialog has taken the lead to recognizing that unusable mobiles & accessories could cause environmental concern and steps were taken at an early stage to develop social and institutional consciousness. GSM world award winner-SM
Slide 38: Corporate Responsibility - Vyapara Diriya
Corporate Responsibility-Vyapara Diriya IFC and Dialog Telekom supports small scale business enterprise development Dialog Telekom with its objective of improving the capabilities of the Dialog Telekom retail traders recently entered into an agreement with the International Finance Corporation (IFC
Slide 39: Thank you
TELEKOM Thank you TELEKOM