Dialog Axiata lifts FY16 profit by 74%
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Sri Lanka’s Dialog Axiata boosted its net profit for FY16 by 74% year-on-year to 9 billion rupees ($59.4 million), recording strong growth across all its business segments.
The operator reported total revenue of 86.7 billion rupees, up 17% year-on-year, with revenue from its core business increasing 16% to 73 billion. Mobile customers increased to 11.8 million.
Dialog Broadband Networks revenue grew 28% to 9.3 billion rupees, but the division’s net loss more than doubled to 385 million rupees due to higher depreciation and finance costs.
Dialog Television revenue meanwhile grew 5% to 6.1 billion rupees, but its net loss also more than doubled to 644 million rupees.
The group’s total capex for the year reached 23.2 billion rupees, representing a capex to revenue ratio of 27%. The bulk of spending went towards investments in high speed broadband infrastructure aimed at strengthening Dialog’s position in Sri Lanka’s broadband sector.
For the fourth quarter, Dialog reported a 5% increase in revenue growth to 7.4 billion rupees. The company attributed the slower growth to the reintroduction of Sri Lanka’s value added tax at the start of November.
Net profit for the quarter meanwhile declined 56% quarter-on-quarter to 1.3 billion rupees, due to lower pre-tax earnings, increased depreciation and higher non-cash forex losses.
Questions & Answers
Q.What contributed to the significant increase in Dialog Axiata's net profit for FY16?
What contributed to the significant increase in Dialog Axiata's net profit for FY16?
The company recorded strong growth across all its business segments. Total revenue increased by 17% year-on-year, with core business revenue growing by 16%. Mobile customer numbers also rose to 11.8 million.
Q.Why did Dialog Broadband Networks and Dialog Television experience increased net losses despite revenue growth?
Why did Dialog Broadband Networks and Dialog Television experience increased net losses despite revenue growth?
Dialog Broadband Networks' net loss more than doubled due to higher depreciation and finance costs. Similarly, Dialog Television's net loss more than doubled, although the article doesn't specify the exact reasons for this division.
Q.What was the primary focus of Dialog Axiata's capital expenditure during FY16?
What was the primary focus of Dialog Axiata's capital expenditure during FY16?
The bulk of the group's 23.2 billion rupee capital expenditure was directed towards investments in high-speed broadband infrastructure. This spending aimed to strengthen Dialog's standing within Sri Lanka's broadband sector.
Q.What caused the slower revenue growth and decline in net profit during the fourth quarter?
What caused the slower revenue growth and decline in net profit during the fourth quarter?
The slower revenue growth was attributed to the reintroduction of Sri Lanka's value-added tax at the start of November. The decline in net profit was due to lower pre-tax earnings, increased depreciation, and higher non-cash forex losses.