Sri Lanka’s Dialog Axiata June net up 20-pct, 11 mn subscribers
ECONOMYNEXT – Sri Lankan celco Dialog Axiata said June 2016 quarter profit rose almost 20 percent to Rs2.3 billion from a year ago, but sharply higher taxes and floods eroded earnings compared with the previous quarter although a recovery is expected in the longer term.
Sales rose 18.6 percent to Rs21 billion in the period, which also saw a sharp rise in finance costs, interim accounts filed with the stock exchange showed.
Earnings per share for the June 2016 quarter were 28 cents. EPS in the first half rose to 61 cents from 48 cents the year before.
Dialog said in a statement that the introduction of Value-Added Tax at 15 percent and Nation Building Tax at 2 percent on telecommunication services resulted in “aggregate telecommunication service consumption taxes increasing from 27.6 percent to 49.7percent for voice services and from 12.2 percent to 31.7 percent for data services.”
The increase in consumption taxes have been observed to have a near term impact of constrained consumption.
“It is envisaged, however, that consumption would return to standard levels in the longer run,” the statement said, adding that bad weather and severe flood conditions during May dealt a significant impact on livelihoods and commerce.
As a result, sales in the June 2016 quarter were flat at Rs21.1 billion on quarter on quarter basis, with group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) growth also virtually flat.
“Group NPAT (Net Profit After Tax) for the 2nd Quarter declined 14 percent QoQ to Rs2.3 billion, while 1H 2016 NPAT demonstrated YTD growth of 27 percent to Rs4.9 billion.”
At company level, NPAT fell 23 percent to Rs2.3 billion for Q2 2016 from the previous quarter.
Dialog also said it consolidated its market leading position within Sri Lanka’s mobile market to surpass the 11 million subscriber milestone during the 2nd quarter.
Dialog Television (DTV) suffered a net loss of Rs228 million for 1H 2016 compared to a Net Profit of Rs114 million in the corresponding period in 2015 owing to “an aggressive service and product enhancement program featuring the expansion of channel genres and the launch of new prepaid product offerings.”
(COLOMBO, August 08, 2016)