Dialog Axitata PLC - QURTALY HIGHLIGHT by JKSB

Reported NPAT +74% YoY for 2QCY14 supported by higher revenues and EBITDADIAL reported a 74% YoY increase in NPAT for 2QCY14 supported by topline and EBITDA growth,taking cumulative NPAT for 1HCY14 to Rs. 2.9bn (+15% YoY). Excluding forex gains of Rs. 300mn in1HCY14 (vs. forex losses of Rs. 851mn in 1HCY13), normalised NPAT was down 23% YoY in 1HCY14as higher revenues (+7% YoY) were offset by a marginal decline in EBITDA (-1% YoY) and higherdepreciation charges. We attribute the dip in cumulative six month EBITDA to an increase in total costs(stemming from increased marketing spend, network costs, and bad debt provisions) and the absence ofVAT credits for DBN (available up to July 2013). At a subsidiary level, DTV reported a profit of Rs.90mn for the quarter (+275% YoY) supported by strong revenue growth (+34% YoY), while DBNreported a widening of losses on the back of higher depreciation charges and EBITDA contraction (dueto the above mentioned expiration of VAT credits).Prepaid subscribers +16% YoY in 2QCY14; data revenues +15% QoQ and +54% YTDDIAL’s core mobile business still accounts for a dominant 64% share of Group revenues, followed byinternational revenues (19%), while top line contribution from the Pay TV and fixed businesses stillremains in single digits. Revenue from digital services (mobile money, digital advertising, etc.) is stillminimal (~1%-2% of Group revenues), but is expected to increase to 5%-6% over the next three years,as per management. DIAL’s mobile subscriber base grew to 9.5 million users by end June 2014 (+15%YoY), off a 16% YoY increase in prepaid subscribers, which offset a drop in blended MOUs and ARPUs.YTD voice and data revenues have grown by 5% and 54% respectively. While data prices in SL remainamong the lowest in the world, DIAL reported that mobile broadband margins had improved in 2QCY14due to scale efficiencies, and management believes the business should become EBITDA positivewithin 2-3 years. DBN’s fixed 4G LTE subscriber base increased by 36% QoQ during the quarter, andwould need to hit 100,000 subscribers in order to achieve a positive EBITDA margin, as per manage-ment.Capex spend expected to increase in 2HCY14, but full year capex should be lower than CY13 levelsFCF in 2QCY14 was positive at Rs. 2.5bn, given 1) a lower capex spend (15% of revenue for the quartervs. 70% of revenue in 2QCY13); and 2) EBITDA improvement (+4% YoY) on the back of a drop inoperating costs. Capex spend is likely to increase to 25%-30% of revenues in 2HCY14, and wouldlargely comprise investments in the company’s new BBG submarine cable and on increasing 4G LTEmobile site coverage. Nevertheless, overall capex intensity in full year CY14 should be lower vs. CY13(total capex of Rs. 28.3bn in CY13; ~45% of revenues) which would likely translate to a higher dividendpayout this year.Currently trades at a premium to the marketWe project full year earnings of Rs. 5.99bn for full year CY14, which translates to an EPS of Rs. 0.73(+15% YoY). At its current price of Rs. 11.10, the stock trades at a CY14E P/E multiple of 15.1x, at apremium to the market. Looking ahead, we expect a significant reduction in international transmissioncosts once DIAL’s BBG Cable Landing Station (CLS) is operational. We estimate that the companycurrently pays ~US$300,000 to SLT per month

I am not buying Dialog and avoid Dialog shares because i do not want to own shares  of a company doing unethical business. dialog is doing something like  pickpocketing of customers money. I do not want dividends paid from unethically earned money .
they are sending various promotions and offers without consent of the subscriber. this is annoying most of the time. if you press a button your money is gone.i tried to unsubscribe to avoid these shit messages but for that you have to call the call centre .they keep you on hold for long time and after that ask many questions to verify that the caller is the registered user. but they do not have courtesy to ask the subscriber before sending these cheating   ,money pickpocketing messages. Anyway after some trouble I managed to unsubscribe..But to my anger after some time they started again this shitty work. This happened not only to  my for many unsuspecting subscribers .I write this  for the attention of Dialog bosses to answer.

I think you are telling about pop up messages that are not going to inbox. If that is yout problem then you can unsubscribe by going through below path,

Menue - Dialog Service - 077 Live and de activate it.

Pls note that I am not currently working at Dialog Axiata PLC

thanks for the info,i will try.

the dialog should know that people buy a sim card for their own business and personal communications. dialog should not barge in to the personal phones as cowboys  to do marketing .what right they have to do that?.if they want they should get the consent of the subscriber first.

I would like to add some comments, nothing personal here.

My take on this is there is nothing wrong in sending promotional messages its not only Dialog that does these types of promotions most of the companies does these types of marketing. At the end of the day a business will survive by making profits. If they dont make profits how are they gonna cover they expenses...This is just my opinion.

Happy Trading...

agree , the companies should make money,but not by cheating the customer. Dialog is doing it very cunning way. There should be some decency in any business.Dialog in this way has no decent manners in making money.I had a respect for Dialog in early days.i owned lot of shares bought from the ipo and secondary market . those days They tried to maintain some corporate decency,respect. now no more. mobitel is not doing that way. Dialog sends popup messages continuously,cunningly. when traveling ,or when you are in a meeting or in a hurry ,you cant make a call without answering these cunning popup questions.to clear the screen you need to answer yes or no.in day light screen is not clear.also elderly subscriber and those who do not familiar in English are the majority victims because they cannot read. every time some money is cut.if dialog has some decency why cant take permission to send ,or atlease why they cant send to inbox.this is purely cheating. cheap cheating. I strongly suggest to TELECOM REGULATORS TO ACT UPOn these scams and cheating schemes run by telephone operators.

Dialog have a very strong priority/cub vision base. They earn 80% of profit from that base. And they are giving lots of benifits for them. That is the main reason Dialog remain in this sector very strongly. Also Dialog activating around 200000 pre paid connections every month. And they are maintaining vary strong Distribution base and Business partners. For ex Softlogic is Business partner of Dialog. And they have over 100 outlets.

I dont saw any other telecommunication company doing these. Others have very low amounts of outlets.

Dialog have

largest cx base

best priority/club vision base

star points rewards (cargills food city also recently joined with this)

Dialog branded phones

Dialog TV (best qulity in sri lanka)

land line (Dialog & suntel) second largest land line base

ez cash (they joined with etisalat recently)

best coverage

strong 4G LTE base

biggest coperate connection base

and more

that is the reason no one can brake the cx base.

one of the best CEO in sri lanka DR.HANS

he cannot be the best ceo ,if he approves cheating money from elderly subscribers, ignorant uneducated subscribers who cannot read English or visually handicapped people etc.may be they make money for the company, but these money is dirty money because that is made from unsuspecting innocent people's ignorance or mistakes.to him to become a good ceo, he should produce a good product or service and sell that good services or product to a willing customer at a reasonable price not by sending cunning money cutting messages stealthily. if he is capitalising on ignorance and human mistakes, errors of subscribers to make money, its a sin.
it is not the way a responsible corporate citizen should act.
engineers do not earn money that way. they earn money humanly .

i request telecom regulators and consumer protection authority to take serious steps to protect public from such schems.

One of my friend complain regarding this issue and he asked a complain number. Before three days he got the refund that was deduct from these popup messages.

I not telling popup messages that are receving without cx req is right. This was happening when cx brought a new connections. If he didnt want those massages they can de activate it from Dialog service menue in phone or visit or call to Dialog outlet. If cx de activate onece it will not come again without activating by cx from the phone.

if they refund its a good move.
Do they really refund?
It is better if Dialog publish that so that millions who subscribe to this can get a refund.
if they do it i can say they are doing a socially responsible business. It is a responsibility of Dialog to publish in Sinhala and tamil so that victims can claim refund.